Norway's sovereign wealth fund plans to support Teck Resources split

A truck hauls a load at Teck Resources Coal Mountain operation near Sparwood, B.C. in a handout photo. (Teck Resources)

Vancouver -

Norway's sovereign wealth fund will vote to support Teck Resources Ltd.'s plan to split the company's metals and steelmaking coal businesses into two separate companies at a key shareholder meeting next week.

The decision comes as Teck works to secure support for its plan over an unsolicited takeover proposal by Swiss company Glencore, which is urging shareholders to reject the company's proposal in favour of its offer to acquire the company.

Glencore has said it cannot pursue its bid if Teck's plan to separate its businesses goes ahead since it would add significant complexity to the deal.

Norges Bank Investment Management, which manages Norway's Government Pension Fund Global, published its voting intentions as part of its routine disclosures on its website. It held a roughly 1.5 per cent stake in the Canadian mining company as of the end of 2022.

The United Steelworkers (USW), the union which represents over 4,000 Teck employees in B.C., has also come out in favour of Teck's planned split into Teck Metals and Elk Valley Resources.

In a statement on Thursday, USW District 3 director Scott Lunny said Teck supports the economies of numerous B.C. communities in which it operates, including Logan Lake, Sparwood, Elkford and Trail.

“Management has briefed the union on their plans and our union believes the plan to split into two, B.C.-based companies is in the best interest of our members at the metals operations and at the coal mines,” Lunny said.

“This is a well-thought-out plan that will create two strong companies willing to work with us and British Columbians to become ESG leaders, provide stability and certainty for our members, provide ongoing benefits to Indigenous nations, and invest in B.C.”

Teck announced in February a proposal to split up its metals and steelmaking coal businesses into two companies, Teck Metals and Elk Valley Resources. The change requires approval by a two-thirds majority vote by the class A shareholders as well as approval by a two-thirds majority vote by the class B shareholders.

Teck shareholders will vote on the separation plan at a meeting on April 26.

This report by The Canadian Press was first published April 21, 2023.