Japan's JFE Steel Corp is reportedly in discussions to acquire a stake in the metallurgical coal business of Canadian mining company Teck Resources, partly seeking to diversify coking coal supplies amid sanctions against Russia.

These confidential talks between JFE Steel and Teck Resources have been ongoing since September, Reuters reported, citing sources. The talks are still in the early stages, and there is no guarantee that a deal will be reached, it said.

Japan's Nippon Steel has also expressed interest in Teck's coal business, previously considering a 10% stake for C$1.15 billion, with an option to increase it to 17.5%. This offer valued Teck's coal business at approximately C$11.5 billion. The strategic positioning of these steel giants highlights the significance of securing reliable coal supplies for their production.

Teck Resources has been contemplating a separation of its coal and copper businesses since March, although an initial proposal was rejected by shareholders. Furthermore, the company turned down a $22.5 billion unsolicited takeover bid for the entire company from Glencore in April. Glencore, for its part, has expressed interest in acquiring Teck's coal division for around $8.5 billion, according to Reuters.

In recent updates, Teck CEO Jonathan Price indicated that the company has been receiving multiple suggestions from investors on how to proceed with the separation of its coal and metals businesses.

He is optimistic about making a decision on the split by the end of this year, offering two options: a 100% sale of the coal business for cash or a partial sale of the coal business with the proceeds channeled into expanding the copper business, according to the report.

(Writing by Emma Yang  Editing by Harry Huo)
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