Canadian and British mining watchdogs are criticizing the Trudeau government’s approval of the sale of ÎÚÑ»´«Ã½ steel-making coal mines to Glencore Plc, saying it’s a bad deal for ÎÚÑ»´«Ã½.
On July 4, ÎÚÑ»´«Ã½’s Minister of Innovation, Science and Economic Development, François-Philippe Champagne, approved the sale of 77 per cent of the ÎÚÑ»´«Ã½ metallurgical coal mines (Elk Valley Resources) owned by Teck Resources (TSX:TECK.B,NYSE:TECK) in the southeastern Kootenays to Glencore plc for $9.5 billion. The sale closed July 11.
Earlier, in January, the other 23 per cent of the Elk Valley Resources mines were sold to Nippon Steel (20 percent) and South Korean steel maker POSCO (three per cent).
The approval of Glencore’s acquisition of Elk Valley Resources under an Investment ÎÚÑ»´«Ã½ Act review came earlier than expected, and is now being criticized in a by MiningWatch ÎÚÑ»´«Ã½, London Mining Network and the Swiss human rights organization Arbeitsgruppe Schweiz-Kolumbien.
“The federal government’s approval of the sale of Teck Resources’ coal operation to Glencore – announced without warning nearly three months before its deadline – came with vague conditions the government claimed would assure Canadians their wallets and the environment would be protected,” the groups say in a press release accompanying a report, which describes Glencore’s record as “scandal-filled."
“Glencore’s takeover of Teck’s coal mines in ÎÚÑ»´«Ã½ is very bad news for the global climate and local communities.”
“You’d think a company’s record would be considered when the government assesses whether selling a Canadian company to a foreign corporation is in ÎÚÑ»´«Ã½’s best interests – especially when the sale carries significant implications for climate, communities, health, and the public purse,” MiningWatch spokesperson Jamie Kneen said in a press release.
“Yet there is no evidence in the federal decision or the conditions it imposes that Glencore’s controversial record was even a consideration in the decision. And most Canadians are unaware of the company’s record, so they don’t know to question the decision.”
The report enumerates some of Glencore’s failings as a good corporate citizen.
It points to the fact Glencore in 2022 and agreed to pay US$1.1 billion for violations of the Foreign Corrupt Practices Act in the U.S. and “a commodity price manipulation scheme.”
The report also accuses Glencore of greenwashing.
“While telling the world it supports the goals of the Paris Climate Agreement, Glencore at the same time financed a covert campaign to push coal in Australia, aggressively criticizing renewables and undermining the reputations of climate advocates," the report states. "This is not the behaviour of a responsible climate actor."
The takeover of the ÎÚÑ»´«Ã½ mines by Glencore has implications for those concerned about selenium pollution on both sides of the ÎÚÑ»´«Ã½-U.S. border, the report warns.
Decades of coal mining in the Elk River Valley has left the river with high levels of selenium, which can be toxic to fish. Teck has already spent more than $1 billion on trying to neutralize selenium in the Elk River Valley.
“The reclamation security Teck left for cleaning up the mine sites is likely billions less than the estimated cost of reversing the selenium contamination over coming decades,” the report states.
“Advocates warned the federal government to impose robust conditions for Glencore to commit to end the pollution and cover the massive clean-up costs. Other than a vague commitment for additional environmental cleanup over five years, an amount equal to around two per cent of expected annual profits, the government failed to do so.”
As part of the federal government’s approval of the sale, Glencore is required to “maintain its obligations under the bond required by the BC Government regulator.
“Notwithstanding these commitments, however, Glencore will, in addition, maintain responsibility for payment of any environmental obligations under Canadian law beyond those covered by the existing bond through 2050," the ministry of Innovation, Science and Economic Development said its it reasons for approving the sale.
“Glencore commits to an additional $350 million investment in rehabilitation and closure activities over 5 (five) years.”
Asked to respond to the report, Glencore wrote: "Glencore is committed to operating ethically, responsibly, and to contributing to socioeconomic development in the countries where we operate.
"We have made significant commitments to the Canadian government aimed at ensuring the transaction is of lasting benefit to ÎÚÑ»´«Ã½ and British Columbia including in relation to employment, the environment and engaging constructively and meaningfully with the Indigenous Nations in the Elk Valley."
