The deal would give Glencore 77 per cent of Teck’s Elk Valley Resources (EVR). Nippon Steel and Posco will hold the rest under a $US8.9 billion deal.

“Glencore continues to believe that a standalone company containing its combined coal and carbon steel materials business, including Glencore’s stake in EVR, would be well positioned as a leading, highly cash-generative bulk commodity company, likely attracting strong investor demand given such yield potential,’’ the company said.

“Glencore therefore intends to demerge the combined business, once Glencore has sufficiently de-levered, which is expected to occur within 24 months from close.

“Glencore intends for the demerged company to continue to oversee the responsible decline of its thermal coal operations in line with Glencore’s current targets and ambition to achieve net zero by 2050, with a supportive policy environment, and to adopt the climate transition strategy for the EVR business that will be developed and implemented pursuant to Glencore’s ICA commitments.’’

While the deal would give it an enormous mining footprint it also increases Glencore’s emissions, although it has planned to run down its thermal coal operations.

Under a proposal earlier this year, Glencore offered to buy Teck, merge its coal that with its own thermal coal business, then spin out the new coal behemoth on the New York Stock Exchange.

Glencore chief executive Gary Nagle said earlier this year that there was strong interest in the US for this sort of cash-yielding business.

The deal follows Glencore’s decision to shut its Mt Isa copper mine by 2025, but allows Glencore to eventually separate itself from coal. Teck would also be able to focus on its copper business.

Glencore chief executive Gary Nagle said the company was pleased with the EVR deal.

“These world-class assets and the experienced people that operate them are expected to meaningfully complement our existing thermal and steelmaking coal production located in Australia, Colombia and South Africa,’’ he said.

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

“The high-quality steelmaking coal mined in the Elk Valley is an essential input to steelmaking in its current form,’’ the company said.

Glencore continues to believe that a standalone company containing its combined coal and carbon steel materials business, including Glencore’s stake in EVR, would be well positioned as a leading, highly cash-generative bulk commodity company, likely attracting strong investor demand given such yield potential.

Glencore is Australia’s largest coal producer, with 17 mining operations across New South Wales and Queensland. Its coal is exported from Abbot Point, Dalrymple Bay, Wiggins Island and RG Tanna coal terminals in Queensland, and from the port of Newcastle in New South Wales.