About Us Canadas Largest Diversified Natural Resources Company 1 Producer of steelmaking coal in North America Top ten copper miner in the 2 Seaborne exporter of Americas steelmaking coal globally 3 zinc miner in the Building…
Attractive Portfolio Of Long-Life Assets & Resources Focused on the Americas & Low Risk, Stable Jurisdictions Strong Resource Position With Sustainable Long-Life Assets Coal Resources 100 years Copper Resources 30 years Zinc…
The Value of Our Diversified Business Model Cash Operating Profit 2014E Sensitivities1 Production Guidance 2014 (Mid-Pt) Change Profit EBITDA US1 Coal 26.5 Mt 19 M / 1 29 M / 1 /tonne Base Copper Coal Metals 2/3rds US0.01…
Chinas Growth Is Strong In Absolute Terms In absolute terms, Chinas GDP growth is approximately double that of 10 years ago Real GDP Growth 2013 7.7% = RMB2.84trn 2014 7.4% = RMB2.95trn 3,500 14% 3,000 Rmb (billions) 12%…
Further Cuts Needed in the Steelmaking Coal Market Seaborne Metallurgical Coal Margin Curve at Spot Price of US115/t 30 Mt of production cuts announced - Lag to full implementation - Market imbalance 10 Mt Teck Margin curve…
Growing Steelmaking Coal Imports to China China's Coking Coal Imports China Rolling 12-Month Coking Coal Imports and Stock Change at Ports 90 2018 Forecast1: 85 Mt 60 54.1 80 50 70 41.9 60 40 50 Mt 30 40 Mt 30…
Copper Surplus Shrinking; Deficit Beyond 2016 Reported Metal Stocks1 Quantum of the Copper Surplus (LME, SHFE, Producer, Consumer & Merchant) Forecasts Continually Shrinking2 2,500 40 800 35 600 Risk to downside 2,000 30 400…
Zinc Deficit Developing; Inventory Declining Reported Metal Stocks1 Developing Deficit is (LME, SHFE, Producer, Consumer & Merchant) A Consensus View2 2,500 70 1,000 60 2,000 500 Inflection point 50 0 1,500 40 kt…
Healthy Long-Term Fundamentals for Oil International Energy Agencys World Energy Outlook 2014 Base Case The short term picture of a well supplied oil market should not disguise the challenges that lie ahead as reliance grows on…
Copper Costs Declining Copper Cash Costs* 2.25 2.00 US/lb 1.75 1.50 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2013 2014 By-product credits currently reduce costs by 0.30 per pound 18 * Before by-product credits
Disciplined Project Execution Highland Valley Mill Optimization Program Throughput has exceeded design capacity of 130 ktpd by 10 kptd on average since commissioning in Q1 2014 Trail acid plant replacement Completed in May 2014; by…
Increased Zinc Exposure Pend Oreille Restart Low capital / high return project - Capex: US41M - ROI 30% assuming zinc price of 1/lb - Payback period: 2.5 years Corporate synergies enhance project economics - e.g. transportation,…
Minimizing Execution Risk In The Fort Hills Project Cost-driven schedule - Cheaper rather than sooner Disciplined engineering approach Shovel Ready Global sourcing of engineering and module fabrication Suncor has completed 4…
Fort Hills Economics Robust Potential Contribution from Fort Hills Fort Hills Free Cash Flow Yield1 at US100 WTI* Sensitivity to WTI Price Tecks share of annual production 40% 13 Mbpa (36,000 bpd) IEA Long-Term 35% Forecast Estimated…
Significant Benefits from Low Oil Prices Benefits Teck overall in the near-term Reduces operating costs by hundreds of millions of dollars annually1 Also contributes to a weakening Canadian dollar, which can generate hundreds of…
Strong Balance Sheet* Investment Grade Credit Rating of Mid-BBB 3,000 Liquidity of 5 Billion Weighted average maturity 15 years Weighted average coupon (interest rate) 4.8% 2,000 Note maturities…
Returning Cash To Shareholders Annualized Dividend Payout Aim to pay a sustainable dividend that 0.90 0.80 grows commensurate with growth in 0.70 earnings and cash flow 0.60 0.50 - Current dividend: semi-annual payment 0.40…
Summary Good leverage to strong zinc & copper markets Attractive portfolio of long-life assets & resources Focus on cost reduction delivering results Prudent capital management Cash being returned to shareholders 26
2015 Whistler Institutional Investor Conference January 22, 2015
Additional Information
Diversified Global Customer Base China North 25% America Europe 20% 17% Asia excl. China 35% Latin America 3% Diversified Portfolio of Key Commodities Coking coal Zinc Moly Germanium Copper Lead Silver Indium 29…
All Business Units Contributed to Our Cost Reduction Program Total Sustainable Cost Savings Copper We have achieved 590M of sustainable cost 219M savings as of Q3 2014 Results achieved by engaging Teck employees 590M Zinc at all…
2014 Outlook UPDATED (October 29, 2014) Production & Site Cost Guidance Guidance Steelmaking Coal Coal production 26.5-27 Mt Coal site costs C52-55 /t Coal transportation costs C37-39 /t Coal costs combined* US79-84 /t Copper…
2014 Outlook UPDATED (October 29, 2014) Capital Expenditures Guidance START OF YEAR Major New Mine Capitalized GUIDANCE (M) Sustaining Enhancement Development* Stripping Total Copper 235 100 120 255 710 Coal 215 70 25 415 725 Zinc…
Our Sustainability Strategy In 2011, we reached an important milestone by launching a sustainability strategy that guides our work Our Six Focus Areas: 1. Community 2. Our People 3. Water 4. Biodiversity 5. Energy 6. Materials…
External Recognition Best 50 Corporate One of top 100 most On the Dow Jones Citizens in Canada sustainable companies Sustainability World Index 2014 in the world and one of five years in a row Canadas most sustainable…
Collective Agreements Operation Expiry Dates Line Creek May 31, 2014 Coal Mountain December 31, 2014 Antamina July 23, 2015 September 30, 2015 Carmen de Andacollo December 31, 2015 Elkview October 31, 2015 October 30, 2015…
Share Structure & Principal Shareholders Teck Resources Limited March 3, 2014 Shares Held Percent Voting Rights Class A Shareholdings Temagami Mining Company Limited 4,300,000 45.97% 28.62% SMM Resources Inc (Sumitomo) 1,469,000…
Family-Controlled Public Issuers Common corporate Cumulative Average Growth Rate structure in Canada May not confirm to typical governance expectations, but can still have strong governance practices Family-controlled issuers can…
Family-Controlled Public Issuers; Teck Share Price Performance Teck has been a strong Long-term investments in Teck have investment in recent years outperformed non-family and materials firms Source: The Impact of Family Control…
Economic Outlook
Substantial Economic Growth Requires Decades to Achieve Per Capita GDP Relative to the US at PPP 100 % Chinas GDP is 20% of the Japan 90 USs on a per capital basis 80 70 Taiwan 60 50 Korea 40 30 20 China 10 India 0 1953 1958…
Substantial Potential For Continuous Robust Growth in China 20-Year Period Average Annual GDP Beginning When Countrys Growth Rate Country Per Capital GDP Was 21% of USs Over a 20-Year Period Japan 1951-1971 9.2 Singapore…
Global Urbanization China and India Leading the Way Despite Chinas rapid urbanization over Urbanization Rates the past decade (to 53.7% in 2013), it is 90% still lower than the Western world who are 80% all 80% 70% - Chinas…
Steelmaking Coal Business Unit & Markets
Global Hot Metal Production A Look Back and Forward Hot Metal Production Growth China 1,300 Global ex. China Growth from 2014 to 2019 (CRU Nov 2014) Chinas hot metal production continues to grow 1,100 - 2003: 214 Mt - 2013:…
Steel Production Growing Globally Monthly Steel Production 75 China 65 55 Traditional Steel Markets 45 Europe 15 China slower growth Japan stable 10 Japan Million Tonnes 9 South Korea good growth 8 USA 7 South Korea…
Chinese Steel Industry Moving to the Coast 900 70% 800 65% 700 600 60% Heilongjiang 500 Mt Ansteel Baiyunquan Project 55% Phase 1 ( 5.4 Mt pig iron, 5.2 Mt crude 400 Jilin steel and 5 Mt steel products) in 2013. 300 50%…
We Are a Leading Steelmaking Coal Supplier To Steel Producers Worldwide High quality, consistency, reliability, long-term supply Asia excl. China North 50% America Europe China 5% 15% 25% Latin America 5% 47 Source:…
Premium Steelmaking Coal Product Hard Coking Coal Benchmark Price Average realized price discount to benchmark is a function of: 350 Average realized price discount 300 1. Product mix: 90% is hard coking of 7% since 2010 coal 250…
Coking Coal Strength 80 U.S.A. Around the world, and Canada Other Australia Teck HCC (hard coking) especially in China, blast 70 Australia Japan and Canada furnaces are getting larger South Africa Teck HCC and increasing PCI…
Capacity Grown to 28 Mt Material Moved Quarterly Coal Production 80 8 7 70 6 Millions of BCM Million Tonnes 60 5 4 50 3 2 40 1 30 0 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11…
Potential for Further Capacity Growth Given Tecks large resource Potential Production Increase Scenarios base, there are a number of 50 options available or under study to allow production growth as the 40 market requires: Quintette…
75 Mt of West Coast Port Capacity Planned Teck Portion at 40 Mt Westshore Terminals Teck is largest customer at 19 Mt West Coast Port Capacity Large stockpile area 40 Recently expanded to 33 Mt Planned growth to 36 Mt 35 3 30…
LNG for Haul Trucks Project Pilot project underway to evaluate running Teck haul trucks on a blend of diesel and LNG - Expected to be running early 2015 Has the potential to reduce our haul truck fleet fuel bill by 27M annually…
China Expected to Add Almost As Much to Global Demand in the Next 15 Years as the Past 25 Years Annual Growth Rate of Chinese Copper But Will Add Significantly Consumption to Slow Dramatically in Additional Tonnage Terms 30% 1,400…
Chinas Copper Imports Remain Strong China Now Accounts for 49% of Global Copper Consumption 1,000 900 800 000s tonnes (content) 700 600 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013…
Copper Cash Costs Should Include Sustaining Capital 2013 Copper Cost Curve C1 vs. C1+ Sus. Capex vs. C3 700 On average, including sustaining capital would 600 increase the cost curve by Sustaining capital adds approximately…
Zinc Business Unit & Markets
Zinc Market Positioned for Change LME Zinc Stocks - 11 Years LME Zinc Stocks Since Dec 2012 250 1,400 250 1,200 1,200 200 200 1,100 1,000 thousand tonnes 150 150 1,000 800 thousand tonnes US/lb 600 900 100 100…
Significant Zinc Mine Reductions - Large Short-Term Losses, More Long Term 2013-2017 2013-2020 0 0 -100 -100 -200 -200 -300 -300 -400 -400 -500 -500 -600 -600 Lisheen Red Dog Angas Perseverance Century…
Future Potential for Zinc Consumption % Galvanized Steel of Crude Production In 2013 China produced over 779 20% 19% million tonnes of crude steel and 41 18% million tonnes of galvanized steel sheet 16% 14% In 2013 the US produced…
The Real Value of Long-Life Assets Fort Hills Project Indicative Rolling NPV1 Significant value created over long term 60% of PV of cash flows beyond year 5 IRR of 50-year project is only 1% higher than a 20-year project…
Building An Energy Business Strategic diversification Large truck & shovel mining projects World-class resources Long-life assets Mining-friendly jurisdiction Competitive margins Minimizing execution risk Tax effective Mined…
World Class Energy Reserves & Resources Bitumen Reserves Tecks Share World-Class (million bbl) Energy Proved Reserves & Resources Probable Proved Plus Probable 1 Fort Hills 414 194 608 Contingent Bitumen Resources2 Project Tecks…
Fort Hills Is One of the Best Undeveloped Oil Sands Mining Leases Strip Ratio vs. Ore Grade 3.3 billion bbls of contingent 12 resources* - Production 180,000 barrels per day (bpd) of bitumen 11.5 Fort Hills - Tecks share is…
Fort Hills Is Part Of A New Breed Of Mineable Oil Sands Projects Legacy Oil Sands Mining Projects (30 Years Ago) Diluted Bitumen Synthetic Oil (Doesnt meet commercial pipeline specs) Naphtha froth treatment process Mine &…
Fort Hills Project Operator Has A Proven Track Record Project Bitumen Capacity1 Suncor is the largest operator in the oil sands Millennium/North Steepbank Mine 310-330 kb/d and has been developing projects in close Firebag In Situ Stages…
Competitive Costs1 for Fort Hills Fully Escalated Capital Cost Per Flowing Barrel Go-Forward Capital2 Project Capital: C13.5 billion 140 Full project cost Teck Capital: including spent to date: Costs in C Thousands per…
Bitumen Netback Calculation Model Typical Diluted Bitumen (Dilbit) Blend Bitumen Netback Calculation Example* Western Canadian Select 120 (WCS) at Hardisty 100 100 86 80 65 25% Diluent 60 40 75% Bitumen 20 0 Bitumen WTI…
Heavy Oil Price Differential West Texas Intermediate (WTI) & WTI-WCS Differential Western Canadian Select (WCS) Prices 120 45 40 100 35 80 30 25 US/barrel US/barrel 60 20 40 15 10 20 5 0 0 Jan-10 Jan-11…
Logistics Solutions Planned Between Fort Hills, Edmonton and Hardisty Fort Hills Nominal Teck Mine Terminal Pipeline/Terminal Operator Capacity Capacity (kbpd) (kbpd) Northern Courier TransCanada 202 40.4 Hot Bitumen East Tank…
Multiple Options To Reach International Markets From Western Canada Common Carriage Pipeline No take or pay commitments When pipe capacity is constrained, access to capacity Markets may be apportioned and netback prices are…
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