In announcing plans to merge with Anglo American PLC to create the world’s fifth-largest copper miner , Vancouver-based Teck Resources Ltd. took pains to signal that it will do everything it can to preserve its Canadian heritage. To that end, the proposed new entity, Anglo Teck, will keep its headquarters in Vancouver and the company’s top two executives will relocate and work out of that office, the company said. Whether a company identifies as Canadian may not rank as a top concern for investors, but as the world moves towards cleaner energy sources and looks for new sources of critical minerals , governments are paying closer attention to how mergers in the mining space affect their domestic industries. Oftentimes, they have as much power as investors to make or break a deal. “It’s way more important now than it would have been five years ago or 10 years ago,” Sean Boyd, chair of Agnico Eagle Mines Ltd., Canada’s largest miner, said. “You have this added piece in Canada now, where Canada is basically saying to the U.S. in these trade negotiations, ‘Well, don’t forget, you actually do need us, because we’re going to bring all these critical metals to the table.’” That’s easy to say, he said, but it’s really difficult to do, “and it’s impossible to do it if you don’t have headquarters here in the country that has that expertise.” The Canadian federal government has been trying to protect its mining sector from foreign takeovers more so than in the past, and that oversight is only likely to increase as the United States tries to catch up with China’s current dominance of critical mineral supply chains. Demand for copper, sometimes called the “metal of electrification” because of its conductive properties, is expected to soar to a record high of 50 million tonnes by 2035 from about 25 million tonnes in 2022, according to a forecast by S&P Global Inc., a research firm. As a result, any deal involving Teck, which in the past few years has shed its oil and coal assets so it could focus on developing its copper mines, is likely to receive government scrutiny. In 2023 and 2024, when Teck was fending off an unsolicited takeover bid from Switzerland’s Glencore PLC, the federal government became heavily involved. Ultimately, Teck kept its copper assets and sold its metallurgical coal business to Glencore in a $9.5-billion deal, but only after then-industry minister François-Phillipe Champagne conducted a months-long review under the Investment Canada Act (ICA) and imposed a half-dozen conditions . Among them is that Glencore must maintain regional offices in Calgary and Sparwood, B.C., for at least 10 years, and that at least 66 per cent of the executive roles in the coal business are filled by Canadians. “The government has also secured a commitment from Teck to reinvest a significant amount of the proceeds of this transaction into its copper growth portfolio, which will position Teck for leadership in the pivotal area of critical minerals,” a July 2024 press release from Champagne’s office said. The mechanism that the government uses to put its stamp on such transactions is the ICA, which allows it broad discretion to determine whether a deal will bring a net benefit to the Canadian economy. On Tuesday, Industry Minister Mélanie Joly said she would closely review Teck’s current proposal to merge with Anglo American to see if it meets the ICA requirements. That is partially why the company described the proposed new entity as “a leading global critical minerals champion headquartered in Canada.” Of course, no one can say exactly whether a multinational company is truly Canadian. Teck has called its agreement with Anglo American “a merger of equals,” but the latter’s shareholders will control roughly 62.4 per cent of the new $70-billion entity while Teck shareholders hold 37.6 per cent. Anglo Teck would keep its primary stock listing in London, which will lead some investors to classify it as a United Kingdom company. Some of the benefits from its business — for example, banking — might naturally flow to U.K.-based firms. Duncan Wanblad, chief executive of Anglo American, who will keep that title in the new entity, is a native of South Africa, where his company was founded more than a century ago and still employs tens of thousands of people. That came in handy last year when South Africa’s Public Investment Corp. refused to back BHP Group Ltd.’s unsolicited takeover bid for Anglo American, which helped to quash the deal . Wanblad currently lives in the U.K., but said he is looking forward to moving to Vancouver, somewhere he has never lived, as part of the deal. Meanwhile, Teck chief executive Jonathan Price — who will become deputy CEO at Anglo Teck — is a native of Wales, though the company said his principal residence is in Vancouver. To some, governments that impose requirements on companies to maintain employee levels in offices and other conditions before approving deals may be creating illusions rather than realities. Kate McNeece, a foreign investment lawyer at Goodmans LLP, said companies enter into contracts with the government when they agree to meet the terms of approval under the ICA. Typically the contracts contain clauses about monitoring the commitments and the government could enforce violations in courts, she said, although such actions are extremely rare. “If you look at the history, there really haven’t been any enforcement actions,” McNeece said. “That either means people are complying or enforcement is lax.” That may be why some people within the mining sector are skeptical that Anglo Teck will keep its ties to Canada if they are no longer valuable. Pierre Lassonde, chair emeritus of Franco Nevada Corp., a gold-focused royalty company, said he thinks any commitments that the government wrings from Teck or Anglo to maintain operations in Canada will fall by the wayside or be forgotten. “Five years down the road, nobody will remember the promises,” he said. “I guarantee you the head office will be back in London.” Meet the Keevils: the Canadian family at the heart of the Teck mining dynastyWhat you need to know about Anglo American's deal for Teck Resources • Email: gfriedman@postmedia.com