February 17, 2009 / 6:57 PM / 9 years ago

UPDATE 1-Teck says sees broad interest in Elk Valley stake

(Adds CEO comments. In U.S. dollars unless noted)

TORONTO, Feb 17 (Reuters) - Buyers from several countries may be interested in taking a stake in Teck Cominco’s TCKb.TO Elk Valley coal operation, part of which Teck is considering selling to pay down debt, the company’s chief executive said on Tuesday.

Teck, which reported a steep fourth-quarter loss on Monday due to writedowns, has also begun talks with bankers to renegotiate a $5.8 billion bridge loan that is due in October, the company said.

Teck took control of Elk Valley by purchasing Fording Canadian Coal Trust for $13 billion last year.

The company took on nearly $10 billion in debt to do so, and the subsequent plunge in metals prices and tightening of credit conditions have forced it to start selling off key assets, including possibly a chunk of Elk Valley itself.

Teck has in the past acknowledged consulting with bankers on selling an Elk Valley stake, and Teck CEO Don Lindsay said on Tuesday the company is seeing interest from several countries eager to lock in access to Elk Valley’s vast resources of coal used in the steelmaking process.

“In our discussions, we see that there’s sort of interest between Brazil, China, Korea, Japan, and let’s not forget India. Even though the shipping distance is quite a way, (India) does have plans to grow its steel industry quite substantially,” he said.

“What we have on offer is a long-term resource, 100 years plus, and it’s available once and only once, so there’s scarcity value.”

In its earnings statement, the company said it had begun discussions with lenders to amend terms of its bridge loan. Teck also took on about $4 billion in longer-term debt when it bought Fording.

Teck’s shares were down 10 percent at C$4.43, touching a two-month low, on the Toronto Stock Exchange on Tuesday afternoon.

$1=$1.26 Canadian Reporting by Cameron French; editing by Peter Galloway

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