The results of a key vote by shareholders of Teck Resources Ltd., which is facing a hostile takeover attempt by Swiss commodities trader Glencore, will be made public Wednesday. The corporate logo of Teck Resources Limited is shown. THE CANADIAN PRESS/HO
VANCOUVER – The results of a key vote by shareholders of Teck Resources Ltd., which is facing a hostile takeover attempt by Swiss commodities trader Glencore, will be made public Wednesday.
It’s a critical moment for the Vancouver-based mining company, which has been working to secure support for its plan to split the company’s metals and steelmaking coal businesses into two separate companies.
Glencore is urging shareholders to reject the company’s proposal in favour of its offer to acquire the company, and has said it cannot pursue its own bid if Teck’s plan to separate its businesses goes ahead.
But while a shareholder vote against Teck’s proposal Wednesday could pave the way for negotiations with Glencore, that doesn’t mean a merger with the Swiss company would be a slam-dunk.
The unsolicited pursuit of what is Canada’s largest diversified mining company by an international giant has triggered sentiments of economic nationalism, and B.C. Premier David Eby, the Mining Association of B.C., as well as the Greater Vancouver Board of Trade have expressed concern over the potential for job losses as well as cast doubt upon Glencore’s ESG record.
In a letter to the Greater Vancouver Board of Trade dated April 24, three senior federal cabinet ministers said Ottawa is watching the situation “very closely.”
“We need companies like Teck here in Canada,” stated the letter, which was signed by Deputy Prime Minister Chrystia Freeland, Industry Minister François-Philippe Champagne and Natural Resources Minister Jonathan Wilkinson.
It remains unclear whether the federal government would go so far as to block a potential acquisition of Teck by Glencore. But some observers have pointed out Glencore’s pursuit of the Canadian company comes at the same time that the government has committed to a national critical minerals strategy as part of its overall climate plan.
Teck is keen to expand its copper and zinc production to meet growing global demand for these metals, both of which are used in the production of electric vehicles and are considered to be key resources for the coming energy transition.
In an interview earlier this month, University of British Columbia mining engineering department head W. Scott Dunbar said Canada has the natural resources to allow it to become a leader in the field, but needs strong domestic players.
“If you haven’t got a well-developed mining industry, it won’t happen,” Dunbar said.
Teck has proposed splitting up its metals and steelmaking coal businesses into two companies, Teck Metals and Elk Valley Resources. The change requires approval by a two-thirds majority vote by the class A shareholders as well as approval by a two-thirds majority vote by the class B shareholders.
Teck is controlled by the Keevil family, which owns the company’s class A shares together with Japanese company Sumitomo.
Teck chairman emeritus Norman Keevil has said Glencore’s proposal is the wrong one, at the wrong time, but that he is open to talking about other possible deals once the company completes its own plan to split its business.
While the result of the vote will be made public Wednesday at the company’s annual general meeting in Vancouver, most shareholders voted ahead of the meeting.
This report by The Canadian Press was first published April 26, 2023.
Companies in this story: (TSX:TECK.B)
