Teck Resources Ltd. has announced a plan to split the company into Teck Metals Corp. and Elk Valley Resources Ltd., which will hold its steelmaking coal business.

鈥淭his transformative transaction creates two strong, sustainable, world-class mining companies committed to responsibly providing essential resources the world needs,鈥� Teck CEO Jonathan Price said in a statement.

鈥淭he transaction simplifies the portfolio of each company, allowing for strategic and financial focus and the ability to pursue tailored capital allocation strategies. It provides investors with choice in response to the evolving investment landscape, and establishes a pathway to full financial separation of the two companies over time.鈥�

Under the plan, Teck shareholders will receive 0.1 of a common share in Elk Valley Resources for each Teck share they hold plus 39 cents in cash per share.

In exchange for the coal assets, Elk Valley Resources will make quarterly payments to Teck Metals consisting of royalty payments and preferred share redemptions through a transition capital structure.

The royalty will be payable until $7.0 billion in payments have been made or Dec. 31, 2028, whichever comes later. The preferred shares will have an aggregate $4.4-billion redemption amount and a 6.5 per cent cumulative dividend.

Teck says it has also reached a deal with its joint venture partners and major customers, Nippon Steel Corp. and Posco, to exchange their minority interests in the Elkview and Greenhills operations for interests in the new company.

NSC鈥檚 exchange of its Elkview interest and a $1.025-billion cash investment will give it a 10 per cent stake in Elk Valley Resources and the transition capital structure, while Posco will receive a 2.5 per cent interest in the company and the transition capital structure for its stakes in Elkview and Greenhills.

The separation will require approval by a two-thirds majority vote by holders of Teck鈥檚 class A shares and class B subordinate-voting shares, each voting separately by class.

Teck also announced plans to end its dual-class share structure that gives its class A common shares 100 votes per share, while its class B subordinate-voting shares carry one vote per share.

Under the proposal, that will require shareholder approval, each Teck class A common share will be swapped for one new class A common share and 0.67 of a class B subordinate-voting share.

The new class A shares will be identical to the current terms of class A shares, but will automatically be exchanged for class B subordinate-voting shares on the sixth anniversary of the effective date of the dual class amendment.

The board says the terms of the change were negotiated with holders of a majority of the class A shares, Temagami Mining Company Ltd., SMM Resources Inc. and Norman B. Keevil.

The changes came as Teck reported a profit attributable to shareholders of $266 million or 51 cents per diluted share for the quarter ended Dec. 31 compared with a profit of $1.49 billion or $2.74 per diluted share a year earlier.

Revenue totalled $3.14 billion for the company鈥檚 fourth quarter, down from $4.20 billion in the last three months of 2021.

On an adjusted basis, Teck says it earned $1.07 per diluted share, down from an adjusted profit of $2.54 per diluted share in the fourth quarter of 2021.