China Investment Corp. Prefers to Invest in Oil and Coal
Posted on 05/02/2023
Teck Resources has seen stratospheric share price appreciation since dropping to US$ 7 in 2020, to today’s price of US$ 44. China Investment Corporation (CIC), the country’s sovereign wealth fund managing over US$ 1.2 trillion in assets, has ridden the wave as the company’s largest shareholder. CIC still owns over 10% of the company’s stock, even after reducing its stake in the company over the years.
Teck had planned to spin off its coal production business, but Swiss oil and gas company Glencore and CIC would prefer the two companies merge. CIC has opposed Teck Resources’ plan to split its metals and energy businesses, though Teck management wants to see the company go green. That would be impossible were it to merge with Glencore or retain its coal business. Critics say Teck was merely trying to duck environmental cleanup costs by divesting its coal business. Either way, Teck was forced to walk back its plan and cancel a vote. Now, Glencore appears to be on the verge of taking over.
Canadian government official Rob Morrison says Teck provides critical minerals to the country, and that he wants the Great White North to “control our destiny, by controlling our critical minerals.” Observers are questioning whether the government will step in to stop Glencore, but it remains unclear.
