Teck Resources Ltd. is exploring a spin-out of its steelmaking coal division, or other ways to exit its largest business, as part of a strategic shift to mining metals that will power a greener economy.
Vancouver-based Teck, the country’s largest coal producer, said on Thursday it is “evaluating alternatives for its steelmaking coal business, including the possible spin-out of an interest in that business to its shareholders.” The announcement came after Bloomberg reported the company could announce a transaction as early as next week.
Teck’s coal businesses, made up of mines in southeastern British Columbia, would be worth between $8-billion and $11-billion as a freestanding company, according to analysts. Almost all Teck’s steelmaking coal is exported to Asia.
Teck is also a major copper and zinc producer, and in recent years, it invested heavily in expanding production of metals essential to a low-carbon economy. Coal accounted for $8.7-billion of Teck’s sales and $5.5-billion of the company’s gross profit in the first nine months of 2022, or just over half the company’s revenues and 70 per cent of its profit.
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