The CEO of Teck Resources believes his company will have no issue getting the necessary regulatory approvals for Glencore’s proposed purchase of the Canadian miner’s coal business.

On Tuesday, Swiss company Glencore announced it will buy a majority stake in Vancouver-based Teck’s coal business for US$6.93 billion, which paves the way for Teck to split its operations in to two companies: one focused on coal and the other on new metals.

“We heard very clearly from our shareholders over recent months that they wanted to see a simple and complete separation of the steelmaking, coal and base metals businesses that Teck currently holds and this transaction very much delivers on that,” Teck CEO Jonathan Price told BNN Bloomberg in a television interview.

“This is a significant step forward in unlocking the value of our base metals business and really establishing Teck as a Canadian based global critical minerals champion.”

The announcement marks the end of months of tense negotiations and comments from government officials concerned about protecting the country’s natural resources.

Price said new industry protections contained within the deal should ease those concerns and ultimately pave the way for the deal to pass regulatory inspection.

“We'll see Glencore committing to maintaining employment levels in Canada and in the coal business, committing to a Vancouver-based headquarters for the coal business, committing to additional investment in that business in the years ahead, particularly in the areas of research and development and community investments,” he said.

“We see this very much as the responsible separation that we've been looking for and we believe that the commitments that Glencore has put forward here are very good for the Elk Valley, for British Columbia and good for Canada.”


Experts who spoke with BNN Bloomberg on Tuesday agreed that the sale shouldn’t face regulatory roadblocks from the federal government.

“There doesn’t seem to be any logical reason as to why Ottawa wouldn’t, it’s just that these things take time,” Bill Harris, partner and portfolio manager at Avenue Investment Management, told BNN Bloomberg in an interview on Tuesday.

He stressed that the sale makes sense for Teck as the coal market is overseas and Glencore is a global trader. He also pointed to the fact the Teck’s Canadian roots would continue to be present even after the sale.

“Half the press release is basically saying: ‘We’re going to keep this in Canada, we’re going to have offices in Canada, this is going to be a Canadian company, this is Glencore Canada,’” Harris said.

John Manley, senior advisor at Bennett Jones who served as Canada’s finance minister under Jean Chretien between 2002 and 2003, said he believes changes from Glencore's earlier offer will help it pass regulatory scrutiny.

“This is a much easier deal to sell to the Canadian government than the previous one was, partly because … it’s not for the whole company, it’s just for the coal assets, so you’ll continue to have a very important Canadian critical metals company in existence in the remainder of Teck,” he said.

Manley also pointed to the fact that this deal is no longer a hostile takeover, which should make it easier for the governments to accept.

In April, British Columbia Premier David Eby said he would lobby the federal government to prevent any takeover of Teck, due to his concerns Glencore would not be as committed to the province’s climate and jobs goals.

Manley said the tweaks to the deal should ease those concerns.

“I think you’ve got a very different transaction, one that probably even Premier Eby in the end is going to say: ‘This is OK,’ once he’s got a chance to go through the undertakings that Glencore has made in the context of the transaction offer,” he said.


Meanwhile, veteran Canadian mining executive Pierre Lassonde, who had previously expressed interest in Teck’s coal business, was dismayed by the deal.

“I’m very disappointed, not for myself, but for Canada,” said Lassonde, who founded mining company Franco-Nevada and is currently president and CEO of Firelight Investments.

Lassonde is concerned that once a two-year commitment to stay in B.C. is up, the Canadian company will head elsewhere – a trend in the country’s business environment that he finds worrying.

“That trend is absolutely murderous for the Canadian dollar and Canadians,” he said. “This is going to keep on accelerating that trend, which I find terrible.”


In speaking at a media event on Tuesday in Toronto, Deputy Prime Minister Chystia Freeland said the regulatory process would be followed before approving the takeover.

“For the government of Canada, our priorities will be as they always are: protecting Canadian jobs, good Canadian jobs (and) protecting Canadian headquarters,” she told reporters.

“Of course, environmental issues are very, very important for us, as are the rights of Indigenous people. We will also consult closely with the province of British Columbia.”

In an email, a spokesperson for Canada’s minister of innovation, science and industry told BNN Bloomberg that the deal is under review.  

“The transaction involving a Canadian company and a foreign company would be subject to a review under the Investment Canada Act (ICA),” the statement reads. “Due to the confidentiality provisions of the Investment Canada Act, we cannot comment further.”

Tony Clement, who served as the federal minister of industry from 2008 to 2011, said in an interview with BNN Bloomberg Tuesday that a deal’s approval comes down to whether regulators believe it will create a “net benefit to Canada.” This can mean the impact on jobs and the environment, to name a few, Clement said.

Additionally, national security risks need to be evaluated for takeovers of this magnitude, though with a deal focused on coal, Clement doesn’t believe there’s much of a concern.

“If this was a critical mineral or metal, it might be a different story,” he said. “You would have to have that overlay of a national security test. I don’t think that’s applicable in this case.”