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Why the power to keep Teck in Canadian hands rests with the federal government



Teck’s Highland Valley Copper mine near Logan Lake, B.C.Handout

Teck Resources Ltd. TECK-B-T had hoped its plan to split in two would be a bulwark against a takeover by a foreign competitor. With that hope dashed, the power to keep Teck Canadian may rest with Ottawa.

Glencore PLC, GLNCY the Switzerland-based mining company and commodities trader, served notice this week that it intends to keep pursuing Teck, after the Canadian miner scrapped its plan to spin off its coal assets hours before shareholders were set to vote on the proposal.

Glencore has said that if Teck won’t negotiate a friendly deal it will take its offer, valued at US$23-billion, directly to the Vancouver-based company’s shareholders. From the standpoint of many investors, the question would be which option offers the best value.

But for the federal government, any deal with a foreign buyer would strike at the heart of its ambitions to position Canada as a major player in the race to transition to a low-carbon economy. The Liberals have pounced on the critical minerals that Teck strips from the earth – copper and zinc among them – as key to the future of the national economy. This week, they made it clear they would prefer that a Canada-based industry leader control those reserves at home, rather than an acquirer with an overseas head office.


“The government has been following developments closely and is in contact with the company and the B.C. provincial government,” Adrienne Vaupshas, a spokesperson for Deputy Premier Chrystia Freeland, said in a statement. “We need companies like Teck here in Canada – companies with a strong commitment to Canada.”

The comments followed a letter the government sent to the Vancouver Board of Trade, in which Ms. Freeland and her cabinet colleagues François-Philippe Champagne and Jonathan Wilkinson hinted strongly that they are counting on an independent Teck to play a major role in the country’s green transition. The minerals Teck produces are used to manufacture electric vehicles and renewable energy sources.

“This is all the more important today as we confront unprecedented geopolitical, economic, and environmental changes,” they wrote.

On Thursday, Ms. Freeland met with mining industry officials to get their views ahead of the first meeting of the Energy Transformation Task Force, a Canada-U.S. initiative aimed partly at building up the critical minerals supply chain between the two countries. The United States, bolstered by US$369-billion in green incentives in its Inflation Reduction Act, is both a partner and a competitor in the energy transition effort.

Ottawa is betting big. This month, it made a splash with billions of dollars in taxpayer support for a Volkswagen AG battery plant in St. Thomas, Ont. That is just one part of a larger strategy to establish a made-in-Canada supply chain for all things EV – critical minerals, auto parts, assembly, and the software and artificial intelligence to run it all. But Canada is not the only country trying to establish a foothold in what is seen as the industry of the future.

How much power does the government have to keep Teck out of foreign hands? A takeover by Glencore would go under the feds’ microscope as part of what is called a “net-benefit review.” In these reviews, the government assesses the impact of foreign investments on economic activity in Canada, including employment, production and capital levels.

With the government deeming copper and other metals critical to the future of the Canadian economy, Glencore or any foreign miner bidding for Teck would also be scrutinized through the lens of national security.

The government has plenty of latitude to block or place conditions on deals within the provisions of the Investment Canada Act, according to Bryce Tingle, the N. Murray Edwards Chair in business law at the University of Calgary. “I’m unaware of any time when its judgment of that act has been successfully challenged, and the act itself is worded broadly enough to give the government a great deal of discretion,” Prof. Tingle said.

Norman B. Keevil, Teck’s chair emeritus, also has veto power over any deal, as holder of a controlling position in the company’s supervoting A shares. He has said he’s not interested in selling the company to Glencore, but he has also said he would not exercise his veto power if the board, management and a majority of B shareholders wanted it. That would put the government in a key role.

In 2010, prime minister Stephen Harper’s Conservatives blocked BHP Billiton’s $38.6-billion hostile bid for Potash Corp. of Saskatchewan. After a net-benefit review, the government said a takeover by the Australian company would not have beneficial effects on Canada’s ability to compete in world markets, improve productivity or bolster its overall economic activity. The Saskatchewan government also opposed the deal, saying the fertilizer product amounted to a strategic interest.

“Maybe it was national security, but it also felt a lot like keeping a very important domestically owned company here in Canada,” Prof. Tingle said.

Teck’s now-scrapped plan to spin off its steelmaking coal assets was initially conceived in hopes of winning back some climate-change-conscious investors that had soured on the company, because of the assets’ high carbon emissions. Later, after Glencore entered the picture, the proposed split became a way of fending off the takeover bid. But too many shareholders balked at the arrangement, in which 90 per cent of the spinoff’s cash flows would have been sent back to Teck for an estimated 11 years.

Glencore had said its offer was contingent on Teck abandoning the spinoff. Under its plans, it and Teck’s coal assets would be merged. With Teck’s split off the table, Glencore is proceeding with its pitch.

Steven Tian, a corporate governance scholar at Yale University, said Glencore’s current and past ties to authoritarian regimes, including those in Russia, Kazakhstan, Qatar and the Democratic Republic of Congo, would be heavily scrutinized on national security grounds both in Canada and by the Biden administration, which would be consulted as part of a review.

“All of these governments are going to have a lot of questions about selling off one of the last and largest freestanding, independent copper miners in North America to a foreign company that frankly has a lot of ties to authoritarian dictators,” Mr. Tian said.

Around 15 per cent of Glencore’s current profits in its metals division come from the DRC and Kazakhstan.

Glencore’s less-than-stellar record operating abroad would likely also attract scrutiny on national security grounds. Last year, Glencore pleaded guilty to bribery and market manipulation in the U.S., and paid more than US$1-billion in penalties.

“Glencore paid more in fines last year than Teck made in profits,” Mr. Tian said. “That is astounding to me.”

British Columbia Premier David Eby has also raised the issue of Glencore’s fines, while lauding Teck’s record on environmental and Indigenous issues.

But Jack Mintz, President’s Fellow of the School of Public Policy at the University of Calgary and a corporate director, said the government’s clout could be limited in this case. Glencore can argue it has well-established operations in Canada, including copper, nickel and zinc mining and processing, agricultural facilities and consulting. It employs 9,000 full-time staff and contractors in the country.

Putting restrictions on foreign companies would not help in the quest to develop critical minerals, he said.

“Why does Canadian ownership of Teck matter for the development of critical minerals here? We already have many mining operations that are foreign controlled, and they are already in the most significant critical minerals, which are zinc and nickel.”

With a report from Niall McGee

Editor’s note: This story was edited to remove reference to Centerra Gold’s Kumtor mine.



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Ford’s Deal To Use Tesla Charging Connector And Superchargers Could Kill CCS – Forbes



Ford Motor company has announced that starting next year, Fords will get access to Tesla’s supercharger network via an adapter sent to all owners, and later, new Fords will be made with the Tesla connector on them, allowing use without an adapter. This may mean the death of the “standard” CCS connector used by non-Tesla cars, and there is a strong case that it should. Whether it means the death of the J1772 slower charging plug is a different story.

Conventional wisdom is that J1772 and CCS are “industry standards” and thus the sure winners. They are also encoded into various laws creating subsidies for the installation of charging stations. But in spite of being a “standard” the Tesla connector is found on 2-3 times as many cars as CCS/J1772 because Tesla has, and continues to outsell all other carmakers combined. Is the “standard” the one chosen by the most companies, or the one chosen by the most people?

Tesla’s connector was proprietary, in that you initially needed a licence from Tesla to use it, while the other connectors were owned by a standards body. Early on, Tesla declared it would licence its patents for “free” but there were a few strings attached and almost nobody accepted the “free” offer. That changed recently as Tesla declared its connector to be entirely open, and people can use it without their permission. They renamed it the “NACS” or North American Charging Standard. EVgo has put Tesla plugs on their fast chargers for a few years, and an adapter to let J1772 cars charge from Tesla slow chargers has also been available for some time, but not much else. Aptera, which has yet to ship a car, has said it would use the Tesla connector.


Ford’s announcement marks a big change because Ford is the (distant) #2 EV vendor in North America, where these plugs are used. With #1 and #2 using NACS, and over 2/3rds of the cars on the road, it has a stronger claim to being the common standard. Everybody would prefer that there was just one charging plug — car owners don’t want to use adapters, and EV charging stations don’t want to have to have two or more plugs or adapters. For some time, there was competition between CCS and the Japanese CHAdeMO standard, but that ended when Nissan, the champion of CHAdeMO, released their Aria car with CCS. Even so, because the Nissan Leaf was the leading EV for a few years, many charging stations support CHAdeMO and may be legally required to do so.

On top of all this, the Tesla connector is generally considered to be superior. (While I am a frequent critic of Tesla’s FSD offering, their charging products deserve high praise.) A single small plug does both slow and fast charging up to 250kW, and the new version supports up to a megawatt. The CCS and CHAdeMO connectors are bulky monsters, much bigger and heavier than the NACS. All NACS cars support a data protocol to handle “plug and play” billing — though only through Tesla — while only a small number of CCS cars have started to support that. The CCS connector was the first to support 800v and 350kW, but only at a few stations, and that advantage is ending.

User Experience

Ford’s CEO indicated that Ford owners will all get the adapter for free, including current owners. They will be able to pay for charging at Tesla SC using the Ford app — they will not need to install the Tesla app, the way that CCS drivers must do when they visit one of the small number of Tesla stations which has a built in CCS adapter.

That’s good, but it’s not the Tesla “plug and play” experience where drivers just plug in and walk away without doing anything else. For that to happen, Ford cars would need to either speak Tesla’s protocol, or Tesla SC would need to speak the “plug and charge” protocol which most existing Fords do support. It is likely Tesla will do that (though there are apparently licence fees which might get in the way, and the protocol is fairly bulky and committee designed, like the CCS connector itself.)

Tesla’s plug and play experience is not just a smoother experience. A significant fraction of failures to charge at CCS stations relate to billing and authentication problems. For unknown reasons, charging vendors have had a hard time at getting that right. In an ideal world, all cars will, after setting up billing, be able to just plug in and walk away 100% of the time.

Charging Port

Current Ford cars have the charging port in front of the driver’s door. That’s a difficult place to reach with the very short cord on Tesla chargers, and it’s on the wrong side of the car, to boot. It is unknown if the adapter provided to Ford drivers will include a segment of cable to solve this problem. Even so, unless it’s a very long segment, Fords will use the charger to the left of the car, not the one to the right used by Teslas, which could cause Fords to block stalls for use by Teslas. There is a simple solution — Fords can be told to use the stalls on the right of a bank of chargers whiles Teslas keep to the left (facing the bank from the parking.) If need be this can even be enforced, only allowing Fords to authenticate at the rightmost available stall and directing them there in the app.

One presumes the new Ford models with NACS sockets will place them either at the front right or rear-left to match Tesla charger geometry.

The Supercharger Network

The connector is good, but the real attraction is Tesla’s supercharger network, which Ford drivers will get access to. It has more charging stalls than all the CCS networks (though this has recently evened up) and they are generally more reliable. Tesla (and Ford NACS) owners can purchase a low cost adapter which lets them use CCS stations, so NACS drivers have access to more than twice the charging stations, but they rarely use the CCS stations because they are less reliable — though they are sometimes cheaper or more conveniently located depending on where you are.

The harsh reality is that a cross-country road trip in a Tesla today is a greatly superior experience to one in a CCS car. Enough so that buyers who care about road trips have to really hate Tesla to get anything else.

Access to this network, though, does not come with using the connector. Ford and Tesla have made a deal to allow that. Terms of the deal are not disclosed, but there is a risk to NACS Ford owners that if that deal should terminate, they might be left unable to use it. Tesla has said it plans to open up their charging stations to all comers, but at present has only committed to putting adapters at about 10% of their stalls in the next two years. (Ford drivers will get access to all stalls, not just 10%, via their adapter.)

In Europe, laws made Tesla abandon their connector for the European version of CCS, and some, but not all Tesla superchargers in Europe can be used by other cars. They all have the same connector, but not all will serve other cars.

For a company making a new EV, with the choice of putting NACS on it or CCS, the answer is obvious — as long as they can assure access to the Superchargers for their drivers permanently. What customer wouldn’t want to be able to charge at more than twice the stations, with higher reliability? Only stubbornness would support a choice of CCS. If the adapter that lets CCS cars charge at Tesla SC becomes available to all, and access to the SC network is available to all, that could change the equation, but NACS would still be the better choice for physical reasons.

One important issue for drivers of 800 volt CCS cars (Lucid, Taycan, e-Tron, Ioniq 5 and a few others) is that Tesla SC only do 400v at present. They have an 800v version now but it is yet to be deployed. Some of those 800v cars, notably the Lucid Air, include a low-capacity 50kW 400v to 800v converter and so can’t charge quickly at 400v stations (CCS or Tesla.) CCS stations were initially also only 400v but the 350kW stations and the newer 150kW stations do 800v. While those cars will still get value from Tesla stations, they will prefer the 800v stations where they can get them.

J1772 vs. NACS

The standards war has gone slightly differently for lower speed charging in homes, offices, parking lots and hotels. All Teslas come with a simple adapter that lets them use J1772. Tesla owners tend to have NACS chargers in their homes — they are actually cheaper to buy than J1772 and offer a button to end the charging session, but this is not true in public charging stations. Tesla did a program of giving out NACS slow chargers to a large number of hotels, so these are still popular in that area, but otherwise public stations use J1772, though the most frequent way it is used is to plug into an NACS car via the adapter. The J1772 connector is just a little bit bulkier than NACS — it’s nothing like the large heft difference between CCS and NACS. (CCS is effectively J1772 with two extra large pins added on the bottom.)

There is so much J1772 out there that it will stick around for a while. These stations are low cost and money to retrofit them will not be available. Fast charging stations are expensive, and if NACS becomes the new standard, they can adapt to adding such a cord or switching to it. Over time, the reverse adapter that lets a J1772 car use a NACS slow charging (level 2) station may become cheap and common, allowing new level 2 to use NACS just as the hotels do.

What if NACS doesn’t win?

To the rest of the EV industry, Tesla is the competition, or even the enemy. As such, they may resist a move to NACS as the primary connector. However, with the sign-on of Ford, it becomes less likely that Tesla will cave in and switch to CCS the way they did in Europe, absent a legal requirement. The use of NACS by Ford means Tesla has a solid claim on the billions in subsidies for the installation of “standard supporting” charging stations. It’s valid too — it seems strange to argue that what defines a standard is having the most corporations on board, rather than the most drivers. As long as Tesla remains open with the NACS, they should now have access to that money, though currently the rules also require charging stations to follow stupid, 20th century practices like having screens and credit card readers, and assuring 150kW to each stall rather than having more stalls with better sharing, which Tesla — with good reason — doesn’t currently do or want to do.

It’s also unclear just how eager Tesla will be to give up their big advantage in the charging network. Will they be willing to guarantee lifetime access to that network to those who buy a car with NACS, even if Tesla and the maker of that car get into a fight?

Following Ford, other vendors may also adopt NACS, others may not support the change. The presence of the $175 (or less) adapter that lets NACS cars use CCS — which is a highly recommended purchase for any Tesla from the last few years — means that NACS owners who care can use the CCS stations, and as such there is not as big an incentive for CCS station managers to add NACS plugs. (Pre-2021 Teslas and a few later ones need a retrofit controller card to use this adapter.) As such, companies like Electrify America, the largest operator of CCS stations, are taking a wait-and-see about adding NACS. If they were operated as businesses, they would not do this — the majority of cars use NACS and at present don’t have the adapter, so they are turning away their business. But EA was created to fulfill the Volkswagen dieselgate penalty, and does not run as a pure business. EA has reiterated that they support CCS because most manufacturers use it, which suggests they care more about manufacturers than drivers — but on the other hand because the Tesla drivers already have a network they prefer — even at a higher price — they feel less push to support them.

Because of the adapters, it won’t be a calamity if there continue to be two “standards.” That’s particularly true if the NACS adapter for CCS cars that Ford owners will all receive becomes available to any driver. In that case, any driver willing to spend a modest amount will be able to charge at any charger, providing Tesla is willing to let them connect. It will just be less convenient when using the adapter.

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Japan stocks jump 2%, Asia markets rise after U.S. reaches tentative debt ceiling deal – CNBC



Singapore’s Temasek cuts pay for senior management and investor team involved in FTX

Singapore state-owned investor Temasek cut the compensation of senior management and its investment team responsible for the recommendation to invest in failed cryptocurrency exchange FTX.

“Although there was no misconduct by the investment team in reaching their investment recommendation, the investment team and senior management, who are ultimately responsible for investment decisions made, took collective accountability and had their compensation reduced,” Chairman Lim Boon Heng said in a statement.

The move from Temasek comes after an internal review was launched to look into its investment into FTX, which resulted in a write-down of $275 million.


Lim added that there was fraudulent conduct by FTX “intentionally hidden from investors, including Temasek.” The statement did not specify how many staff were affected, nor the severity of the pay cuts.

— Lim Hui Jie

Fed’s Loretta Mester expects interest rates will have to rise

Cleveland Federal Reserve President Loretta Mester told CNBC on Friday that she expects more interest rate increases will be needed as inflation stays elevated.

“When I look at the data and I look at what’s happening with the inflation numbers, I do think we’re going to have to tighten a bit more,” Mester said on “Squawk on the Street.” “We’ve made progress. Now it’s this calibration exercise, and that’s what’s difficult.”

Mester is a nonvoting member this year on the rate-setting Federal Open Market Committee.

—Jeff Cox

Preferred Fed inflation gauge rises more than expected

The core personal consumption expenditures index, the Fed’s preferred gauge of inflation, rose 0.4% in April. That’s more than economists polled by Dow Jones expected. Year over year, core PCE rose 4.7%, also more than expected.

— Fred Imbert

Markets now expecting Fed rate hike in June

Markets raised their bets for a June rate hike from the Federal Reserve following hotter-than-expected inflation data Friday morning.

Odds for a quarter percentage point increase jumped to 56%, according to CME Group data. That followed a report showing that personal consumption expenditures prices rose 0.4% in April and 4.7% from a year ago.

The chances of an increase were just 17% a week ago. The probability of a hike by no later than July rose to 75%.

—Jeff Cox

Consumer sentiment slightly beats expectations

The final reading on May consumer sentiment was slightly above expectations. The University of Michigan’s consumer sentiment index came in at 59.2, while economists polled by Dow Jones had forecast a reading of 57.7.

To be sure, that level is well below April’s 63.5.

“Consumer sentiment slid 7% amid worries about the path of the economy, erasing nearly half of the gains achieved after the all-time historic low from last June. This decline mirrors the 2011 debt ceiling crisis, during which sentiment also plunged,” Surveys of Consumers director Joanne Hsu wrote.

— Fred Imbert

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Canada's bank earnings, job vacancies and Michael Sabia's new job: Must-read business and investing stories – The Globe and Mail



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Canada’s biggest banks reported their second-quarter earnings this week as concerns about economic downturn threaten the sector.Alex Lupul/The Canadian Press

Getting caught up on a week that got away? Here’s your weekly digest of the Globe’s most essential business and investing stories, with insights and analysis from the pros, stock tips, portfolio strategies and more.

The second-quarter earnings from (most of) Canada’s biggest banks

Canada’s biggest banks kicked off this week’s second-quarter earnings season with disappointment. Only one of the Big Six banks, Canadian Imperial Bank of Commerce, topped analysts’ forecasts. Meanwhile, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal and Royal Bank of Canada all fell short of analysts’ expectations. Stefanie Marotta reports that economic uncertainty, inflation and higher interest rates combined forces to hit the profits – and that a worsening economic outlook is prompting lenders to set aside more money for loans that could turn sour. National Bank of Canada will release its results next week.

Michael Sabia expected to be named CEO of Hydro-Québec

Michael Sabia, one of the federal government’s most trusted economic advisers, is leaving his position as deputy minister of finance and finalizing arrangements to become the next chief executive officer of Hydro-Québec. Nicolas Van Praet and Bill Curry report that talks between the Quebec government and Mr. Sabia began after the release of the federal budget in late March. The veteran business leader stepped down as CEO of pension fund giant Caisse de dépôt et placement du Québec in 2019 after a decade at the helm, and has been a central figure in federal policy since the 2015 election of Prime Minister Justin Trudeau.


Have a high-school diploma? Canada has a job for you

Job vacancies in Canada have soared as the economy recovers from the COVID-19 pandemic, but, by and large, these vacant positions have required very little education. According to a new Statistics Canada report, there was a quarterly average of 563,000 job vacancies in 2022 that required a high-school diploma or less. It’s a different story, however, for those with postsecondary education. Last year, there was a quarterly average of 117,000 positions that required a bachelor’s degree or higher – or less than half the volume of unemployed people with that level of education. Matt Lundy takes a closer look at the national shortage of highly educated job seekers in this week’s Decoder.

Ring of Fire project at risk due to red tape, billionaire owner says

Andrew Forrest, the Australian billionaire owner of mining assets in Ontario’s Ring of Fire region, says the project is at risk because of red tape, the cumbersome consultation process and persistent delays. The project is a key part of the province and Canada’s plans to become a player in metals for electric-vehicle batteries, but it has sat undeveloped for the better part of two decades. Niall McGee points to unproven economics, tension with Indigenous communities, a lack of political consensus and the gigantic capital cost requirements as reasons behind the glacial pace of development.

Introducing a survey gauging the mood of Canada’s most powerful CEOs

What’s on the minds of Canada’s most powerful CEOs? A first-of-its-kind survey from The Globe’s Report on Business and Nanos Research asked a group of top business leaders, representing companies with combined revenues of roughly $224-billion, to anonymously share their views on trade and investment policy, interest rates, labour shortages, cyber attacks and their overall outlook for the Canadian economy. Jason Kirby reports on a few insights from the survey, including figures that reveal more than six in 10 CEOs believe Canada is on the wrong track when it comes to being a place for businesses to invest.

How common is it for adult kids to help parents financially?

The Bank of Mom and Dad is a common catchphrase for parents helping their adult children, but what do we call it when kids support their parents? There’s also some demographic urgency to the issue. Canada’s population is aging, and life expectancy keeps rising. The 2021 census shows that one of the fastest growing age groups is people who are 85 and older. Rob Carrick wants to dig into the economics, and is asking adults who provide financial help to their older parents to fill out this survey.

Sign up for MoneySmart Bootcamp: If you want to improve your financial fitness, The Globe’s MoneySmart Bootcamp newsletter course is for you. This new five-part course written by personal finance reporter Erica Alini will improve your personal finance skills, including budgeting, borrowing and investing. Subscribe to the MoneySmart Bootcamp and you’ll receive an e-mail a week to work a different financial muscle. Lessons will land in your inbox Wednesday afternoons.

Now that you’re all caught up, prepare for the week ahead with the Globe’s investing calendar.

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