Bill Phillips
I was sold once. No, despite her many assertions to do so, I was not sold to the gypsies by my mother.
Actually, I was a line item on the sale of newspaper a few years back. The seller wanted to retain some of my services even though they were cutting the paper loose. It was quite flattering. The purchaser agreed because, like many NHL contracts, seller carried some of my salary.
But I remember, quite vividly, the night I got the call saying we had been sold. Shock and fear of the unknown dominated for quite some time. Will it be status quo? Will the new owner make a bunch of changes? Will they clean house? Will they want me to cover bake sales? You know, serious, existential stuff.
The tough part to deal with was the fact things had suddenly changed.
That’s what everyone at Teck is going through right now.
Last week the mining company announced it is splitting into two companies. Everyone in the Elk Valley now works for Elk Valley Resources as it will focus on coal mining. The company’s other holdings will focus on low-cost base metal production and copper development under the name Tech Metals Corp.
“The transaction simplifies the portfolio of each company, allowing for strategic and financial focus and the ability to pursue tailored capital allocation strategies,” said Teck CEO Jonathan Price. “It provides investors with choice in response to the evolving investment landscape, and establishes a pathway to full financial separation of the two companies over time.”
In other words, each of the two new entities will each be easier to sell, especially the more profitable one.
Upon completion of the separation, it is expected that Elk Valley Resources will have $1 billion in cash and other working capital, no debt, and $88 million in leases relating to coal operations. That’s certainly good news for the valley as the new entity will be in a good financial position. However, Nippon Steel Corporation and Posco, two East Asian-based steel-making companies, will exchange minority interests in the Elkview and Greenhills mines for interests in Elk Valley Resources, which will then own 100 per cent of steelmaking coal operations. That means Elk Valley Resources will be the only negotiator should someone come shopping.
I’m old enough to remember when Kaiser Resources bought everything, and then Westar, and then … and then … and then.
The point being ownership realignment and/or a sale isn’t necessarily a bad thing. In addition, having a company that is completely focused on its core product, in this case coal, is a good thing.
Even so, dealing with the new boss, even if it’s the same as the old boss, can be stressful. Hopefully all will be sorted soon.
Bill Phillips is an award-winning columnist with 35 years of experience in community journalism.