Teck Metals and Elk Valley Resources to become independent companies

press release

February 21, 2023

Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) (“Teck”) has announced the reorganization of its business to separate Teck into two independent, publicly-listed companies: Teck Metals Corp. (“Teck Metals”) and Elk Valley Resources Ltd. (“EVR”).

Teck Metals will be growth-oriented with premier, low-cost base metals production, and will have a top-tier copper development portfolio. EVR will be a high-margin Canadian steelmaking coal producer focused on long-term cash generation with significant equity value accretion potential. Both companies will remain committed to strong environmental and social performance.

“This transformative transaction creates two strong, sustainable, world-class mining companies committed to responsibly providing essential resources the world needs,” said Jonathan Price, chief executive officer, Teck. “Both Teck Metals and EVR have high-quality operating assets and strong financial foundations, with talented and dedicated employees, committed to ensuring safe and responsible operations. The transaction simplifies the portfolio of each company, allowing for strategic and financial focus and the ability to pursue tailored capital allocation strategies. It provides investors with choice in response to the evolving investment landscape, and establishes a pathway to full financial separation of the two companies over time.”

“This transaction is the culmination of a comprehensive review by our board to determine the best path to realize the full potential of the two businesses, while at the same time ensuring ongoing responsible management and operation for the long term,” said Sheila Murray, chair of Teck’s board. “We are confident that pursuing this plan will position both businesses for even greater success, allow shareholders to optimize their exposure to the different underlying commodities, and support a sustainable future for the benefit of employees, local communities, and Indigenous peoples.”

Highlights of the spin off include:
• Teck Metals – a premier, growth-oriented producer of energy transition metals
• Elk Valley Resources – a pure-play, high-margin steelmaking coal producer
• Teck Metals retains steelmaking coal cash flows for transition period to fund copper growth
• Provides investors choice of businesses with unique fundamentals and value propositions
• Nippon Steel Corp. to pay Teck $1 billion in cash for interest in Elk Valley Resources

Teck has also reached agreement with its steelmaking coal joint venture partners and major customers, Nippon Steel Corp. (“NSC”) and POSCO, to exchange their minority interests in the Elkview and Greenhills operations for interests in EVR. As a result, EVR will own 100 percent of its steelmaking coal operations.

“This significant participation by two of the world’s largest steelmakers highlights the long-term, critical importance of high-quality steelmaking coal in order to reduce emissions and build essential infrastructure globally,” said Price. “We would like to thank our long-term partners NSC and POSCO for their continued support of the business. Their participation as shareholders of EVR is a testament to the strong outlook for the business.”

You can read more about the separation agreement here.

Image courtesy of Teck.





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