Teck's Highland Valley Copper mine in British Columbia's interior, in March, 2017.JONATHAN HAYWARD/The Canadian Press
Ottawa’s regulatory review of Anglo American PLC’s NGLOY proposed acquisition of Teck Resources Ltd. TECK-B-T will be a major test of more stringent rules brought in the aftermath of an earlier high-profile takeover involving the Canadian miner.
London-based Anglo on Tuesday said it plans to buy Vancouver-based Teck in an all-stock deal worth approximately US$20-billion that could see one of Canada’s last remaining major critical-minerals miners fall into foreign hands.
Q&A: Send us your questions about the Anglo Teck deal
For the deal to close, it must be approved by the federal government. Industry Minister Mélanie Joly will scrutinize the transaction for national-security concerns, and it must make economic sense for Canada under the net-benefit test.
A net-benefit test kicks in when the transaction’s enterprise value is at least $2.079-billion for a buyer from a country that has a trade deal with Canada.
After approving Switzerland-based Glencore PLC’s GLNCY acquisition of a majority stake in Teck’s coal business in 2024, then-industry minister François-Philippe Champagne said Canada would only approve foreign acquisitions of important Canadian mining companies engaged in significant critical-minerals operations “in the most exceptional of circumstances.”
In justifying the higher bar, he said it was because of the strategic importance of Canada’s critical-minerals sector and the need to protect it.
“This is really the first major test of this policy in a very significant way,” Subrata Bhattacharjee, partner and national chair of the competition and foreign investment review group with Borden Ladner Gervais LLP, said in an interview, on Anglo’s proposal to buy Teck.
“They are going to have to persuade the minister that this is, in fact, an exceptional situation.”
Anglo has already made several commitments aimed at heading off some of the concerns that Ottawa may have about the deal.
It said the name of the company will be changed to Anglo Teck; the global headquarters will be based in Vancouver; the chief executive officer, deputy CEO, chief financial officer and “a significant majority” of the executive management team will be based in and live in Canada; and “a substantial proportion” of Anglo Teck’s board of directors will be Canadian.
In a statement posted on X on Tuesday, Ms. Joly listed some of the criteria she will consider as she weighs a decision, including jobs, capital expenditures and the impact on Indigenous peoples.
Anglo said it will maintain employment levels in Canada with no net reduction in the number of employees here stemming from the transaction.
It said it plans to invest at least $4.5-billion over five years in Canada, including putting some of that toward an extension of the Highland Valley mine, improving critical-minerals processing capacity at the Trail plant in British Columbia, and potentially building new mines.
Some of the commitments Anglo has announced have already been made by Teck itself over the years.
As in any negotiation, promises being made by the acquirer are often not its best offer, Mr. Bhattacharjee said, and there is frequently wiggle room for Ottawa to demand better terms.
“It’s customary for the minister to seek clarifications, enhancements and additional commitments,” he said.
Before reaching a decision on Glencore’s acquisition of Teck’s legacy coal business, the government deliberated for about eight months.
Mr. Bhattacharjee said that is a typical period for both a net-benefit and in-depth national-security review to play out, although extensions can also be obtained as a matter of course.
In 2020, the federal government took seven months to weigh a decision on whether to allow gold miner TMAC Resources to be acquired by China’s Shandong Gold Mining Co. Ltd.
In that instance, the Trudeau government rejected the deal owing to national-security concerns.
During reviews, Ottawa rarely tips its hand, although there have been some exceptions. In March, 2024, Mr. Champagne, in an interview with The Globe and Mail, chastised a small Canadian mining company over its attempt to circumvent a national-security review pertaining to a financing deal with a foreign investor. The very next day, the deal was called off.
What do you want to know about the Anglo Teck deal?
On Friday, Sept. 12 at 12 p.m. ET, mining reporter Niall McGee and business columnists Andrew Willis and Eric Reguly will answer your questions about one of the biggest mining deals. What were the circumstances that led to Anglo buying Teck?
How likely is it that the government will let it happen? What does this mean for Canada’s critical mineral strategy? Submit your question now.