In a move that could create a dominant global coal miner, Glencore (GLEN) has put in an all-cash offer for Teck Resources’ (CA:TECK) steelmaking coal unit. The Swiss mining and trading giant had previously pushed for an all-share merger and then demerger which would create one base metals and trading company and a coal company. The Glencore merger offer scuppered a plan by Teck to split its coal and metals operations.
Glencore had previously valued Teck’s coal business at $8bn (£6.4b).
“While Glencore remains willing to pursue its proposed merger demerger, Glencore has made this alternative proposal to acquire [Teck’s coal business] as it is expected to allow for a value accretive demerger of the combined coal and carbon steel materials business to its shareholders,” the company said.
Teck said the proposal was “one of a number” under consideration. “The proposal is preliminary in detail, conditional and non-binding,” the company added. AH
Read more about Glencore: Glencore talks up recycling but dirty coal brings in the cash and 'Huge volatility' drives Glencore record earnings
Savannah Resources updates lithium mine plan
After finally getting its stage one environmental backing from Portuguese authorities, Savannah Resources (SAV) has redone the numbers on its Barroso lithium mine, putting the cost at $236mn (£187mn) and production at around 191,000 tonnes of spodumene (5.5 per cent lithium content) a year over 14 years. The cost is more than double the 2018 estimate of $109mn, and annual production is slightly higher. The payback period is quicker, at 1.4 years instead of 1.7, however, and the net present value of the mine has also quadrupled to almost $1bn thanks to higher lithium prices. Savannah will get its final study done in the coming year and also needs a full environmental licence for the mine. Its shares were up 5 per cent on the news. AH
