Teck has also agreed to sell 20% of the business to Japan's Nippon Steel Corporation, which already holds a 2.5% stake in the business.

South Korea's POSCO will swap a stake in two of Teck's coal operations for 3% in the steelmaking coal business Elk Valley Resources.

The transaction is expected to close in the the third quarter of 2024.

Glencore, which mines and trades thermal coal used to produce electricity as well as smaller amounts of coking coal to make steel, has previously said it would demerge the coal units of both companies.

The head office for the steelmaking coal business will be set up in Vancouver, Glencore said.

(Reporting by Clara Denina and Yadarisa Shabong; Editing by David Goodman)

By Clara Denina