Heather Exner-Pirot is the director of energy, natural resources and environment at the Macdonald-Laurier Institute.
In many ways, the US$8.9-billion deal Glencore has struck for Teck Resources’ coal assets represents an elegant split that plays to each company’s strengths.
Teck, the Canadian miner, can now focus on its core base metals business, in particular copper, as it bets on strong returns in the years to come. Swiss commodities giant Glencore can build up its coal empire, adding the steelmaking coal assets to its vast thermal coal trade.
But the deal also reveals how coal has its own set of rules. Despite how profitable and strategic Teck’s coal resources are, they will soon come under foreign control. It is hard to imagine this unfolding the same way for any other commodity.
Coal is an essential, ubiquitous material. It is the workhorse of the global power sector, accounting for more than a third of global electricity generation. And it is indispensable in steelmaking.