"This transaction will unlock the full potential of our...copper growth portfolio, which is significantly undervalued" added Price.
Teck's steelmaking coal unit has been plagued by several snags in the past three years, including supply-chain disruptions, adverse weather events, labor shortages and an outage at Elkview plant.
The company said its shareholders would receive both EVR shares as well as cash for an aggregate of C$200 million ($148.71 million). Teck will receive an 87.5% interest in gross revenue royalty from the steelmaking coal business through the transition period. The miner expects the transaction to be completed in the second quarter of 2023. "We view Teck's announcements as positive, however, it will take several years and anyone expecting a more immediate change (growing the copper business and diversifying away from coal) may be disappointed," RBC Capital Markets wrote in a note to investors. Japan's top steelmaker Nippon Steel Corp , which holds a 2.5% interest in Teck's Elkview operations, has sought to exchange its minority interest for a stake in EVR by paying the Canadian miner C$1 billion in cash, which gives the new coke coalmaking unit an enterprise value of C$11.5 billion. After closing, Nippon Steel will have the right to buy additional EVR common shares up to a maximum of 17.5%. The Canadian miner also posted lower-than-estimated fourth-quarter profit, partly dented by its overall steelmaking coal business that slumped more than 40% in the reported period. ($1 = 1.3449 Canadian dollars) (Reporting by Sourasis Bose in Bengaluru and Yuka Obayashi in Tokyo; Editing by Sherry Jacob-Phillips)
