Teck Deal With Anglo Faces Indigenous Challenge on Smelter Plan | Company Business News
(Bloomberg) — An Indigenous group in Canada vows to bring political and legal challenges against Teck Resources Ltd.’s merger with Anglo American Plc, unless the companies consult with them over expansion plans for a smelter in southern British Columbia.
Teck’s zinc-and-lead smelter in Trail, BC, is on lands that are the responsibility of the Osoyoos Indian Band, according to Chief Clarence Louie. He said Teck hasn’t meaningfully talked to the group about its proposed merger and investments for the Trail operations, which faced historic complaints about pollution.
“To date we have experienced significant impacts without any benefit,” Louie said in an emailed statement, calling the companies’ proposal to expand the operations without consulting First Nations “unconscionable.”
Anglo and Teck agreed this month to combine in a deal that would create a mining giant worth more than $50 billion. As part of the transaction, the companies said they would invest as much as C$750 million ($544 million) in the Trail operations to explore ways to add copper processing and expand output for germanium and other so-called strategic metals.
Canada’s government has the ability to block the proposed transaction under the rules of the Investment Canada Act. The “net benefit test” allows the minister to judge any deal based on a number of factors, including the impact on jobs, exports, technological development and “Canada’s ability to compete in world markets.”
Teck and Anglo have made commitments to invest in Canada, relocate the joint headquarters to Teck’s base of Vancouver and invest C$4.5 billion in Canada if the deal is approved. Canadian Industry Minister Melanie Joly said Tuesday the companies haven’t yet done enough to demonstrate the deal’s advantages to the nation’s economy.
In an interview with Bloomberg News, Osoyoos Chief Louie said he’ll ask politicians to obstruct the deal unless there’s better consultation, citing the United Nations Declaration on the Rights of Indigenous People. The declaration was legally adopted by BC and Canada, and outlines the need for free, prior and informed consent from Indigenous groups for measures affecting their lands.
The chief said he wants to discuss involvement by the area’s Indigenous people on environmental and cultural issues and the potential for jobs and revenue sharing related to the Trail operations. The smelter in Trail now operated by Teck was established more than a century ago.
“They’re doing these deals on other mines,” Louie said of Teck, referring to deals the company has struck elsewhere, “but they have nothing with the smelter, nothing in Trail itself.”
Teck has invested in remediation efforts for Trail and worked with local Indigenous communities, according to company filings, though the Osoyoos Indian Band isn’t among groups it names.
Louie said efforts are underway to meet Teck Chief Executive Officer Jonathan Price within weeks, after a previous meeting was canceled. Teck said it has been in touch with the Osoyoos Indian Band about the proposed merger and looks forward to discussing further.
“Teck is committed to building and maintaining relationships with Indigenous governments affected by our operations and engaging meaningfully for significant projects,” a company spokesperson said Thursday in an emailed statement. “That includes Trail operations as the merger transaction progresses and the potential investments proposed as part of the merger become better defined.”
An Anglo spokesperson said the company echoed Teck’s comments.
If the deal goes ahead anyway — the companies expect to complete the transaction within 12 to 18 months — the Osoyoos band is prepared to challenge the companies in court.
“We’ll use whatever legal options we have,” Louie said. “Whatever we have to do.”
More stories like this are available on bloomberg.com
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