Vancouver’s Teck Resources Ltd. TECK-B-T and London’s Anglo American PLC NGLOY are to come together in a merger that will create the worlds’ fourth-biggest copper producer as the hunt for critical metals intensifies, Teck chairman emeritus Norman B. Keevil says.
The two companies are to announce an all-share merger that will see Anglo, one of the world’s biggest diversified mining companies, own 60 per cent of the enlarged business, with Teck owning the rest.
In an interview with The Globe and Mail Tuesday morning, Mr. Keevil, who is also Teck’s controlling shareholder through his ownership of its super-voting A shares, called the deal “not a takeover by Anglo, but a merger of equals.”
He said that the operational headquarters of the new company, to be called Anglo Teck, will be in Vancouver, though the administrative offices will remain in London. Anglo’s chief executive officer, Duncan Wanblad, will become the CEO of Anglo Teck and will be based in Vancouver. Jonathan Price, the CEO of Teck, will become deputy CEO.
“Teck’s future is secured,” Mr. Keevil, who is the son of Teck founder Norman Bell Keevil, said. “It will become more resilient.”
Teck undertaking major overhaul at QB2 mine in Chile after years of struggles
The merger comes after a series of cost overruns at Teck’s enormous QB copper mine in the Chilean Andes, one of the highest altitude open-pit mines in the world. Recently, QB has been having problems with the construction and operation of its tailings pond, where waste material from the mining process goes.
Driving the deal is QB’s close proximity to the even larger Collahuasi copper mine, which is owned 44 per cent by Anglo, 44 per cent by Glencore of Switzerland – which last year bought Teck’s vast coal operations in British Columbia – and 12 per cent by a subsidiary of Japan’s Mitsui.
The companies are expected to announce billions of dollars of synergies by putting Collahuasi and QB together. “When you have cost overruns, scale helps,” Mr. Keevil said.
The merger could take as long as a year to complete and will require regulatory approval from Ottawa.
The government is likely to scrutinize the deal closely, since Teck is Canada’s biggest diversified mining company and has extensive operations in Canada. Ottawa will want assurances that those projects, such as the expansion of the Highland Valley copper mine, announced in July, will not be sacrificed as the two companies come together.
More to come