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Diversified resources firm Glencore is set to close its $6.9 billion (R125.7bn) acquisition of Canadian steel-making coal miner Elk Valley Resources (EVR) this week, after receiving regulatory approvals at the beginning of this month.

The acquisition of EVR from Teck Resources enhances Glencore’s coal-mining business, including its operations in South Africa.

The company believes the Canadian EVR has “world-class assets” and “the experienced people that operate them are expected to meaningfully complement our existing thermal and steel-making coal production” in South Africa, Australia and Colombia, the company said.

On Friday, the company confirmed that it had “received approval from the government of Canada under the Investment Canada Act (ICA) for the acquisition of a 77% interest in EVR” from Teck Resources.

This was the final regulatory approval required for the transaction. Glencore expects this acquisition will now close on July 11.

Glencore CEO Gary Nagle said their Canadian assets “form a significant part” of the company’s global business.

“We are pleased to have received final regulatory approval for the transaction and look forward to completing the acquisition and welcoming EVR into the Glencore Group,” Nagle said.

“The investment in EVR will further support our position as one of the largest diversified miners and suppliers of critical minerals in Canada.”

Glencore already produces zinc, nickel, and copper in Canada where it also runs smelters after merging with Xstrata in 2013.

In the past five years, Glencore has invested as much as $3.6bn in capital in Canada.

“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,” added Nagle.

He explained “the acquisition of EVR will further enhance the quality” of the company’s portfolio by “broadening our ability to provide high-quality steel-making coal” which is an “important transition-enabling” commodity to customers around the world.

This was in addition to expected and projected positive contributions to the company’s cashflows.

EVR had a production of steel-making coal of 21.5 million tons in 2022 and 17.3m tons in the year to date to September 30, 2023.

The Canadian company’s earnings before interest, tax, depreciation and amortisation (Ebitda) of C$7.4bn (R98.8bn) in 2022 and C$3.7bn in the year-to-date as at September 30, 2023.

Its profits before tax for 2022 amounted C$6.0bn in 2022 and C$3.1bn as at the September 30, 2023 year-to-date while gross assets closed the same period at C$18.5bn.

Glencore believes global population growth, increased urbanisation and a growing middle class will continue to drive long-term demand for steel and the steel-making coal required to produce it.

It said last year that the high-quality steel-making coal mined in the Elk Valley in Canada was an essential steel-making input commodity in its current form.

“Steel is necessary for constructing transportation and infrastructure such as ocean-going vessels, rail, bridges and buildings as well as energy-transition infrastructure including wind turbines, all such products being critical to our current and future way of life,” it said.