ANALYSIS: How China could determine the outcome of Teck’s crucial vote Wednesday to split itself into two companies – by Eric Reguly (April 25, 2023)

As the resources industry becomes less local and more global, crucial investment decisions are often determined in far-flung capitals. Such is the case with Teck Resources, Canada’s largest diversified mining company. Sometime in the next two days, possibly the next few hours, an investment committee in Beijing will make a decision that will greatly influence – perhaps even determine – Teck’s future.

China Investment Corp., one of the world’s largest sovereign wealth funds, owns 10.3 per cent of Teck’s single-vote class B shares, making it the largest shareholder of that class. It is on course to become the key vote Wednesday when Teck’s proposal to hive off its coal business from its base-metals operations goes to a shareholder vote in Vancouver.

If CIC endorses Teck’s proposal, the odds might well tilt in Teck’s favour. If it does not, Teck’s biggest strategic move in a decade seems likely to fail, handing Glencore, the Swiss commodities giant that covets the Canadian company, a potential route to a merger. Teck has rejected two such proposals from Glencore since late March.

As far as we know, the numbers suggest the vote is on a knife edge, with both Teck and Glencore fidgety about the outcome. That’s why CIC’s vote is critical.

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