Reaction from elected and union officials is pouring in to the proposed sale of Teck Resources Ltd’s coal assets to Glencore — a Swiss-based mining giant — that was announced on Tuesday (Nov. 14).
Sparwood Mayor David Wilks said he was “not concerned” given commitments that Glencore had made as part of the announcement, as Glencore’s successful bid for Teck’s coal assets followed an unsolicited and failed attempt to acquire the entirety of Teck Resources Ltd. earlier this year.
“It’s not our first rodeo, if you want to call it that, from the prospective of changing hands of the coal companies and it probably won’t be the last,” said Wilks. “So far, it sounds far better than what the first go-around was with Teck.”
The four metallurgical (steel-making) coal mines in the Elk Valley serve as the bedrock of the East Kootenay economy, providing thousands of direct and indirect jobs for people and businesses in places like Elkford, Fernie, Sparwood, Cranbrook and beyond.
The US$9-billion sale would see Teck’s coal assets spun into Elk Valley Resources (EVR), through a 77 per cent majority stake to Glencore.
READ MORE: Glencore buys Teck’s steelmaking coal arm in US $9-billion deal
Concurrently, Teck has agreed with Nippon Steel Corporation (NSC) that its 2.5 per cent interest in the Elkview Operations will be rolled into EVR, and that NSC will acquire a 20 per cent interest in EVR.
POSCO, a steel-making company based in South Korea, will exchange its 2.5 per cent interest in Elkview Operations and 20 per cent interest in Greenhills for a three per cent stake in EVR.
In terms of the effects on the Elk Valley, Glencore has made a number of commitments that would be honoured under EVR’s operations.
EVR will continue to operate in Canada with a head office in Vancouver, and regional offices in Calgary and Sparwood, which includes completion of a new building that just started construction.
EVR will also maintain significant employment levels in Canada, with no net reduction in the number of employees as a result of the transaction.
Other commitments include continuing to implement the Elk Valley Water Quality Plan, spending up to $150 million on research and development activities such as water quality treatment technologies, and honouring existing agreements with Indigenous Nations.
Fernie Mayor Nic Milligan said he is hopeful that the coal mines continue their “sustainable operations” under Elk Valley Resources, support local communities and be valued community partners.
“Ultimately, I am hopeful that the commitments made in the transaction will be commitments kept for the betterment and continued sustainability of our communities, and for the continued employment and ongoing benefit of all those who work directly for and who support the mining industry in the region,” said Milligan.
“I look forward to working with Elk Valley Resources now and through the transaction to ensure a sustainable future for the Elk Valley.”
Reaction from elsewhere was a bit more tepid.
The United Steekworkers (USW) union, on behalf of the four local unions representing 4,000 Teck employees, reserved support for the transaction and pledged to watch and participate in the review required by the federal government, as part of the regulatory process necessary to approve the sale.
“While we see a number of good and broad commitments such as job retention, a Vancouver-based head office with offices in Sparwood and Calgary, investments in recycling, water quality, training, development and other community initiatives, the underlying concerns persist regarding Glencore’s role as a corporate entity and the absence of communication from the company to the union gives us pause to fully support the deal,” said Scott Lunny, USW Western Canada director.
“Those issues were raised by Teck itself, previously, as well as others in Canada. We need to hear from Glencore directly, with enforceable commitments on the future of steelmaking operations in the Elk Valley, their treatment of the workforce and commitment to the communities.”
Yaq̓it ʔa·knuqⱡi’it (Tobacco Plains Indian Band) issued a news release, noting that the Nation is following the proposed sale “with keen interest” while noting that there is a path forward for sustainable mining in the Elk Valley that requires responsible practices and water management in ways that respect and protect all living things.
“Over the past few months our Nation has undertaken an intensive process of working with the Province of British Columbia and Teck Resources to find a new path forward for the future of mining in our ancestral lands (ʔakanuxunik̓ʔamakis),” said Nasuʔkin (chief) Heidi Gravelle. “At the core of this process has been the acknowledgement that our Nation is the Title holder and rightful voice of stewardship in the Elk Valley.
“We have strong expectations that these important discussions will continue with British Columbia, Teck and now Glencore.”
While the terms of the proposed sale were announced on Nov. 14, there is a regulatory process that will take until next year to finalize the sale, if it meets the criteria under the Canada Investment Act.
Chrystia Freeland, Canada’s finance minister, said the proposed Teck sale is a “serious transaction,” while speaking at a housing announcement in Toronto on Nov. 14.
“We’re going to follow our regulatory processes carefully,” said Freeland, adding that key issues are Canadian jobs and Canadian headquarters, environmental concerns and the rights of Indigenous peoples.”
B.C. Mines Minister Josie Osborne echoed similar sentiments, in an emailed statement.
“Glencore has made commitments around a headquarters in Vancouver, a regional office in Sparwood, and to working with First Nations,” said Osborne. “If the sale is approved by the federal government, it is our expectation that they would meet those commitments and retain existing commitments to environmental stewardship and water quality – working in alignment with our high standards on environmental regulations and collaboration with First Nations.
By divesting the coal assets, Teck Resources Ltd will refocus on its portfolio of copper growth projects, such as the Galore Creek project in northwest B.C. and extending the life of Highland Valley Copper west of Kamloops.
“This sale will ensure Teck is well-capitalized and able to realize value from our base metals business and deliver strong returns to our shareholders while maintaining a robust balance sheet,” said Jonathan Price, president and CEO of Teck.
“Glencore has made strong commitments that will create new benefits for Canada and the Elk Valley and ensure responsible stewardship of the steelmaking coal operations for the long term.”