Glencore's coal takeover draws ire of MPs

A Swiss-based mining company with a sketchy foreign business record that won approval to take over Teck Resources’ B.C. coal mines has MPs from multiple parties and environmental groups up in arms.

François-Philippe Champagne, federal Minister of Innovation, Science and Economic Development, approved mining giant Glencore’s $12.3-billion takeover of Teck Resources’ coal mines — called Elk Valley Resources — on July 4.

A few weeks after the announcement, a group of mining-focused environmental organizations published a report outlining Glencore’s “significant corruption, climate failings, and environmental and human rights violations,” and questioned whether the federal government considered these factors when it approved the sale.

Among other controversies, the report points out a recent US$ 1.1-billion settlement over foreign bribery charges — “the biggest fine ever given in a US foreign bribery and market manipulation settlement.”

“Glencore is not the type of company we want taking control of Canadian mining because they're like corporate raiders in the mining sector,” NDP MP Charlie Angus told Canada’s National Observer in an interview. “They do not have a good track record.”

Jamie Kneen, Canada program co-lead at advocacy group MiningWatch, said the report was intended to ring alarm bells about Glencore’s corporate record, but Champagne issued his decision months before it was released. “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 Canada’s best interests – especially when the sale carries significant implications for climate, communities, health, and the public purse.” The report was compiled by MiningWatch Canada, the London Mining Network and ASK!, a Swiss corporate responsibility organization.

“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,” said Kneen. “And most Canadians are unaware of the company’s record, so they don’t know to question the decision.”

Glencore, which is the world’s largest private-sector coal company, defended its record in an emailed statement to Canada’s National Observer.

“Glencore is committed to operating ethically, responsibly, and to contributing to socioeconomic development in the countries where we operate,” wrote company spokesperson Charles Watenphul.

“We have made significant commitments to the Canadian government aimed at ensuring the transaction is of lasting benefit to Canada and British Columbia including in relation to employment, the environment and engaging constructively and meaningfully with the Indigenous Nations in the Elk Valley.”

The mines Glencore is acquiring from Teck are metallurgical coal used in steelmaking, but the company has a vast portfolio of thermal coal mines abroad. In 2023, it produced 1.1 per cent of the world’s total greenhouse gas emissions, which is comparable to a major oil company like Shell or Chevron, according to the report. Burning thermal coal for electricity is one of the dirtiest ways to generate power but Glencore has plans to expand its thermal coal operations despite the climate impacts, the report pointed out.

Angus, who hails from Ontario mining country, called the sale “the worst thing to happen to Canadian mining since the Harper government allowed Glencore to take over Falconbridge,” referring to nickel mines formerly owned by a Canadian mining company near Sudbury Ont..

Falconbridge Ltd. was “one of Canada's leading innovative mining companies” that put a lot of money into jobs and exploration before Glencore took over in a series of buyouts, he said.

“[Glencore] treated these assets as, basically, a simple extraction process: they extract value from our country, they extract value from our natural resources and they put very little back,” Angus said, calling the Falconbridge takeover “a disaster for the north.”

“I can't see that the Teck takeover is going to be any better.”

CPC MP Rick Perkins and Green Party Leader Elizabeth May criticized the federal government for allowing the sale despite Glencore pleading guilty in 2022 to bribery and corruption charges levelled by the U.S. Department of Justice.

“This is also not the first time the Liberal Government [has] chosen to overlook corruption when doing business,” Perkins said in an emailed statement to Canada’s National Observer. “The Liberals continued to give government contracts to SNC Lavalin after that company was found guilty of bribery charges overseas and the Prime Minister’s Office pressured their own Attorney General to let them off the hook for fraud prosecution in Canada.”

Perkins, the CPC shadow critic for innovation, science and industry, pushed for amendments to the Canada Investment Act that would have ensured companies prosecuted for corruption automatically undergo a more rigorous review — but the committee voted to change it to “convicted.”

May also drew a connection to SNC Lavalin, pointing out that after going through a name change to Atkins-Realis, the Quebec company is part of a private consortium charged with operating and managing Canada’s nuclear facilities and liabilities despite its egregious track record. Many Canadians aren’t familiar with Glencore, its history of corruption, human rights complaints at its Colombia coal mine and opposition to and undermining of climate action in Australia, the European Union and South Africa, May said.

Champagne’s approval of the Teck-Glencore sale comes with some conditions attached. For the first 10 years, Glencore needs to have certain numbers of Canadian employees, executives and offices. Glencore will also have to maintain a $1.9-billion bond for environmental liabilities, including emergency shutdowns and mine reclamation, as currently required by the B.C. government.

To Angus, the conditions are nothing more than a rubber stamp.

In response to these criticisms, the Department of Innovation, Science and Economic Development said Glencore’s proposed acquisition was assessed under the Canada Investment Act for its “overall economic benefit for Canada.” It said the company committed to ensure “a strong and well-capitalized Canadian operation of Elk Valley Resources,” maintaining the environmental bond and responsibility for other environmental costs until 2050, and commitments to First Nations.

“The Government of Canada has also secured a commitment from Teck Resources to reinvest a significant amount of the proceeds of this transaction into its copper growth portfolio, positioning Teck for leadership in the pivotal area of critical minerals,” reads the emailed statement from the department.

Cleanup costs

May pointed out the projected cost of addressing selenium pollution from coal mining in B.C.’s Elk Valley is more than three times higher than the $1.9-billion bond, according to a March 19 report commissioned by Wildsight, a Kootenay-based environmental organization. Selenium is a naturally occurring, essential micronutrient, but it is toxic at higher doses, particularly to fish and egg-laying animals. Decades of coal mining in this region continue to pollute the waterways with selenium, which flows into a human-made lake straddling the U.S.-Canada border into Montana.

The Wildsight report found that reversing selenium pollution from Teck Resources’ coal mines could cost $6.4 billion, and that doesn’t account for costs of other environmental restoration like land reforming, revegetation, conservation measures, aquifer remediation and water quality concerns other than selenium. Teck disputed the report’s findings and pointed to $1.4 billion it had invested in water treatment facilities.

The pollution transcends borders and concerned groups and First Nations have been asking for Canada and the U.S. to cooperate on a joint investigation since 2012.

In March, after years of delay by B.C., Canada and the U.S. announced the International Joint Commission (IJC) — a body tasked with resolving disputes about shared waterways — will investigate the effects of selenium pollution from mining operations in B.C.

May is worried the Glencore acquisition will impact the ongoing, long-overdue investigation.

“Any time corporate management changes and corporate ownership changes, it does tend to create delays,” she said in an interview with Canada’s National Observer. “So, ideally, you wouldn't approve the sale of [Elk Valley Resources] to Glencore until the work of the International Joint Commission collaborative governance body has gotten much farther along.”

Glencore is currently facing a class action lawsuit due to pollution from its copper smelter in Rouyn Noranda, Quebec. Two citizens filed the lawsuit against Glencore and the Quebec government in October 2023 for damages caused to residents “as a result of the release of toxic and carcinogenic contaminants,” including arsenic, lead, cadmium and sulphur. The allegations have not been proven in court.

In allowing the mine sale, the federal government wants to show that they're open for business, Angus said.

“Well, being open for business is not being a sucker. That's what they don't get.”

Natasha Bulowski / Local Journalism Initiative / Canada’s National Observer