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The logo of the Canadian mining company Teck Resources Limited is displayed as people visit the Prospectors and Developers Association of Canada annual conference in Toronto on March 7. Glencore PLC has a hostile US$22.5-billion takeover on the table for Teck.CHRIS HELGREN/Reuters

Teck Resources Ltd.’s TECK-B-T vote to split in two hangs in the balance, with the outcome too close to call, its biggest shareholder missing in action and back office problems causing frustration behind the scenes, a source familiar with the vote said.

Shareholders of Vancouver-based Teck on Wednesday will meet on the company’s proposal to split itself into Teck Metals and Elk Valley Resources, which would hold its metallurgical coal assets.

Glencore PLC GLNCY has a hostile US$22.5-billion takeover on the table for Teck. The Swiss mining and commodities trading giant has urged Teck’s shareholders to vote against the split, which in turn could force the board of Teck to engage with it.

At least two-thirds of votes cast by shareholders must be in favour for the separation to be approved.

While the result of the vote is scheduled to be made public on Wednesday, Teck has a good idea of where it stands, because most shareholders vote ahead of the meeting. As of Monday afternoon, the outcome of the vote was too close to call, the source said.

The Globe and Mail is not identifying the source because the discussions are private, and the person was not authorized to speak publicly.

Jen Hansen: If Teck Resources is sold to Glencore, Canada’s loss will go beyond mining

After noon PDT Monday, which was the proxy voting deadline, votes cast by shareholders won’t be guaranteed to factor into the outcome.

With only hours to go before the deadline, China Investment Corp.’s vote had not yet come in, and Teck’s advisers were baffled as to the reason why, the source said.

CIC was Teck’s biggest shareholder as of its last public disclosure in March. With a 10.3-per-cent stake, CIC has outsized influence on the outcome of the vote.

Investors who owned stock on the record date of March 7 are eligible to vote. If CIC sold its shares after the record date, it still has the right to vote, but it might not feel compelled to do so, as it wouldn’t have any skin in the game.

CIC bought its initial stake in 2009 when it acquired 17.2 per cent of Teck at $17.21 a share. CIC has pared back its holdings on several occasions, and made fat profits each time. Teck shares last week hit an all-time high of $65.15 apiece. If CIC sold its stake then, it would have realized a more than 350-per-cent profit.

CIC and Teck did not respond to a request for comment for this story.

If CIC casts its vote after the proxy deadline, it will be at the discretion of Teck chair Sheila Murray as to whether the company accepts the vote or not.

If the numbers after the proxy deadline show that Teck has secured enough votes to move forward on the split, it won’t have to accept any more votes from CIC, or anybody else.

But Teck will have to wait until well past the proxy deadline before it gets a final reading on where it stands. The source said that Teck is dealing with several administrative challenges that are causing the scorecard to be skewed.

Some investors are “overvoting” their holdings, owing to voting shares that were acquired after the record date, the source said.

In addition, there is a significant lag on the scorecard in instances in which investors have flipped their votes, the source said. Shareholders are allowed to change their vote, as long as it is logged ahead of the proxy deadline.

If the Teck split is voted down and eventually it reaches an agreement to sell itself to Glencore, there is no assurance the federal government would allow the deal to pass.

The deal would be subject to a federal net benefit review and a national security review. The former would look at whether the transaction is in the best interest of Canada from an economic point of view, and the latter would explore whether there are any issues that could jeopardize national security. The security review would also consider the impact on Canada’s critical minerals supply chain.

While any such review would be lengthy, and involve discussions with Canada’s allies, including the United States, Ottawa has given early signs that it wants to keep Teck in Canadian hands.

“We need companies like Teck here in Canada – companies with a strong commitment to Canada,” Deputy Prime Minister Chrystia Freeland, Industry Minister François-Philippe Champagne and Natural Resources Minster Jonathan Wilkinson said in a Monday letter to the Greater Vancouver Board of Trade.

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

After facing scrutiny for allowing the sale of far too many Canadian critical minerals assets to foreign companies with ties to autocratic regimes, late last year the federal government introduced measures that make it harder for foreigners to buy Canadian critical minerals assets. Among those measures was a virtual ban on any new Chinese investment in Canadian mining companies.

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