The Ontario Teachers’ Pension Plan has announced a new joint venture with mining giant Glencore Canada Corp. to invest in royalty streams from base-metals projects.
Under the deal, Glencore will contribute a portfolio of selected royalties worth about $380 million. The portfolio includes a selection of existing royalties on properties in North and South America in both the production and development stage. The joint venture, a 50/50 limited partnership known as BaseCore Metals, will pursue further investment opportunities in the sector, according to a news release issued on Tuesday. Ontario Teachers’ will make a payment for its interest in the joint venture.
“This investment in BaseCore Metals and base metal streams and royalties reflects an important component of Ontario Teachers’ natural resources mandate to ensure attractive relative returns through exposure to commodities that are well-positioned to benefit as the world transitions to a low-carbon economy,” said Andrew Claerhout, senior managing director for infrastructure and natural resources at Ontario Teachers’.
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“Working with strategic operators who have an active presence in key industries is a central tenet of Ontario Teachers’ investment strategy, and we are pleased to be forming this partnership with Glencore.”
Glencore’s operations include 150 mining and metallurgical sites, oil production assets and agricultural facilities around the world. The new joint venture will operate independently, with Glencore and Ontario Teachers’ each having the right to nominate directors to its board.
“The creation of BaseCore Metals is unique in the sector and will enable us to secure further offtakes for our marketing business,” said Ivan Glasenberg, chief executive officer of Glencore. “We are pleased to be partnering with Ontario Teachers’ to take advantage of the significant opportunities that are expected to emerge across the sector in the coming years.”