(Bloomberg) — Teck Resources Ltd. is exploring the sale of a minority stake in its metallurgical coal business as it seeks to take advantage of surging prices for the commodity, people familiar with the matter said.

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The Canadian miner has approached parties including smaller rival Arch Resources Inc. to gauge their interest in buying a stake of 10% or more in the business, the people said, asking not to be identified as the matter is private.

Teck’s coal business could be valued at about $8 billion, according to the people. Rising demand for the commodity could push that figure higher, the people said. Shares of Teck rose 1.8% at 12:45 p.m. in Toronto after declining as much as 0.8% earlier.

Deliberations for a stake sale are in the early stages and there is no guarantee that a deal could be reached, the people said. A representative for Teck Resources declined to comment, while a spokesperson for Arch Resources didn’t immediately respond to requests for comment.

Teck Resources has been working with an adviser on options for the coal business, including a sale or spinoff, Bloomberg News reported in September.

Large commodity producers are under increasing pressure to cut back on fossil fuels in response to investor concerns over climate change. However, coal prices have surged in recent months as an economic recovery from the coronavirus pandemic has driven up demand for the fuel around the world.

Metallurgical coal is a key raw materials used in steelmaking, which remains one of the most polluting industries on the planet and faces significant pressure from policy makers to clean up its act.

Teck produced more than 21 million metric tons of steelmaking coal in 2020 from four locations in western Canada. The business accounted for 35% of the company’s gross profit, according to its website.

(Updates with share price movement in third graph)

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