Canadian miner Teck considers sale, spinoff of $8 bln coal unit

Visitors pass a sign of sponsor Teck Resources at the Prospectors and Developers Association of Canada (PDAC) annual conference in Toronto, Ontario, Canada March 1, 2020. REUTERS/Chris Helgren

Sept 14 (Reuters) – Teck Resources Ltd (TECKb.TO), is exploring options for its metallurgical coal business, including a sale or spinoff that could value the unit at as much as $8 billion, Bloomberg News reported on Tuesday, citing sources.

Large commodity producers have been facing investor pressure to shift away from fossil fuel business, including by shedding assets, amid a push to reduce carbon emission and halt climate change.

The company is working with an adviser as it looks for strategic alternatives for the unit, the report said.

Teck Resources declined to comment on the report.

The company’s sales from its steelmaking coal unit was 6.2 million tonnes in the second quarter, a 24% jump from year earlier.

Steel prices has been rising since the second quarter, helped by higher demand for the metal as economies recover and demand picks up after being hit by the coronavirus pandemic.

The miner said in July that wildfires in British Columbia, Canada’s westernmost province, disrupted rail services and this was likely to weigh on its steelmaking coal business unit for the third quarter.

U.S. listed shares of the miner were up as much as 6.4% at $26.17 in afternoon trading.

Reporting by Sahil Shaw and Rithika Krishna in Bengaluru; Editing by Arun Koyyur

Our Standards: The Thomson Reuters Trust Principles.

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