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Teck has entered into an agreement with Fording Canadian Coal Trust which has a 60% interest in the coking coal exporter Elk Valley Coal.
Under the multi-billion dollar deal Teck will acquire 100% of Fording’s assets, which consist principally of its non-operating interest in Elk.
Elk is the world’s second largest producer of seaborne hard coking coal with its product coming from six mines in British Columbia and Alberta, Canada.
Elk sells mainly to Asian and European markets as well as North and South America.
Teck chief executive Don Lindsay said the transaction would increase Teck’s exposure to the highly profitable coal market.
“Based on expectations that the rate of growth in demand for metallurgical coal, especially the high quality coking coal that Elk Valley produces, will continue to outpace relatively constrained growth in supply, we believe that the outlook for this business is strong,” Lindsay said.
