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Glencore wins final regulatory clearance to acquire Teck's coal assets

5th Jul 2024 08:20

(Alliance News) - Glencore PLC said on Friday it has received approval from Canada to acquire a 77% interest in Elk Valley Resources.

The Barr, Switzerland-based miner and commodity trader is buying this steelmaking coal business from Teck Resources Ltd for USD6.93 billion in cash.

It said the Canadian regulatory approval is the final hurdle for the transaction, which is now expected to close on Thursday next week.

"We are pleased to have received final regulatory approval for the transaction and look forward to completing the acquisition and welcoming EVR into the Glencore Group," Chief Executive Officer Gary Nagle said.

"Glencore's Canadian assets form a significant part of our global business, and some have a history that dates back more than 100 years. The investment in EVR will further support our position as one of the largest diversified miners and suppliers of critical minerals in Canada," Nagle said.

Glencore clinched its acquisition of Elk Valley back in November following a bitter public battle over Teck's coal assets.

As part of the arrangement, Glencore had said Teck had agreed with Japan's Nippon Steel Corp that its current 2.5% interest in Elkview Operations would be rolled up to equity in Elk Valley, and that Nippon Steel would acquire additional equity in Elk Valley from Teck.

On closing of the Elk Valley deal, Nippon Steel would hold a 20% equity interest in Elk Valley, which is based in southeast British Columbia, Canada.

At the same time, South Korean steel maker Posco Holdings Inc intended to exchange its current 2.5% interest in Elkview Operations and its 20% interest in the Greenhills joint venture for a 3% stake in Elk Valley.

At closing of the transaction, Glencore would acquire from Teck, Nippon Steel and Posco's shareholder loans made to Elk Valley.

Glencore shares rose 1.3% to 487.05 pence each on Friday morning in London, while in Johannesburg, shares were 1.6% higher at ZAR113.41 each.

By Artwell Dlamini, Alliance News reporter

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