2016 whistler institutional investor conference
TRANSCRIPT
Forward Looking Information
Both these slides and the accompanying oral presentations contain certain forward-looking statements within the meaning of the United States PrivateSecurities Litigation Reform Act of 1995 and forward-looking information within the meaning of the Securities Act (Ontario). Forward-looking statementsinvolve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Teck to bematerially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These forward-lookingstatements include statements relating to the long-life our assets, estimated profit and estimated EBITDA, our expectation regarding market supply anddemand in the commodities we produce, our statement that we are in a strong financial position, our expected year-end cash balance, 2016 totalspending reduction expectations, capital and operating cost savings, our level of liquidity, statements regarding our credit rating, the availability of orcredit facilities and other sources of liquidity, reserve and resource life estimates, 2015 production and cost guidance, 2015 capital expenditure guidance,our statements that we have a strong growth pipeline, potential benefits of LNG use in haul trucks, all projections for Project Corridor, statementsregarding the production and economic expectations for the Fort Hills project, including but not limited to operating and sustaining cost projections,sustaining capital projection, free cash flow projections, estimated netback, operating margin, Alberta oil royalty, net margin, Teck’s share of go-forwardcapex, mine life, Fort Hills capital cost projections, transportation capacity and our ability to secure transport for our Fort Hills production, andmanagement’s expectations with respect to production, demand and outlook in the markets for coal, copper, zinc and energy.
These forward-looking statements involve numerous assumptions, risks and uncertainties and actual results may vary materially, which are described inTeck’s public filings available on SEDAR (www.sedar.com) and EDGAR (www.sec.gov). In addition, the forward-looking statements in these slides andaccompanying oral presentation are also based on assumptions, including, but not limited to, regarding general business and economic conditions, thesupply and demand for, deliveries of, and the level and volatility of prices of, zinc, copper and coal and other primary metals and minerals as well as oil,and related products, the timing of the receipt of regulatory and governmental approvals for our development projects and other operations, our costs ofproduction and production and productivity levels, as well as those of our competitors, power prices, continuing availability of water and power resourcesfor our operations, market competition, the accuracy of our reserve estimates (including with respect to size, grade and recoverability) and the geological,operational and price assumptions on which these are based, conditions in financial markets, the future financial performance of the company, our abilityto attract and retain skilled staff, our ability to procure equipment and operating supplies, positive results from the studies on our expansion projects, ourcoal and other product inventories, our ability to secure adequate transportation for our products, our ability to obtain permits for our operations andexpansions, our ongoing relations with our employees and business partners and joint venturers. Management’s expectations of mine life are based onthe current planned production rates and assume that all resources described in this presentation are developed. Certain forward-looking statements arebased on assumptions regarding the price for Fort Hills product and the expenses for the project, as disclosed in the slides. Assumptions regardingliquidity are based on the assumption that Teck’s current credit facilities remain fully available. Assumptions regarding our liquidity are also based oncurrent foreign exchange rates and assume that Teck’s 2015 guidance for production, costs and capital expenditures are met. Assumptions regardingFort Hills also include the assumption that project development and funding proceed as planned. Assumptions regarding our potential reserve andresource life assume that all resources are upgraded to reserves and that all reserves and resources could be mined. The foregoing list of assumptionsis not exhaustive. Assumptions regarding the Corridor project include that the transaction closes as planned and that the project is built and operated inaccordance with the conceptual preliminary design from a preliminary economic assessment.
2
Forward Looking Information
Factors that may cause actual results to vary materially include, but are not limited to, changes in commodity and power prices, changes in marketdemand for our products, changes in interest and currency exchange rates, acts of foreign governments and the outcome of legal proceedings,inaccurate geological and metallurgical assumptions (including with respect to the size, grade and recoverability of mineral reserves and resources),unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications or expectations, costescalation, unavailability of materials and equipment, government action or delays in the receipt of government approvals, industrial disturbances orother job action, adverse weather conditions and unanticipated events related to health, safety and environmental matters), union labour disputes,political risk, social unrest, failure of customers or counterparties to perform their contractual obligations, changes in our credit ratings, unanticipatedincreases in costs to construct our development projects, difficulty in obtaining permits, inability to address concerns regarding permits of environmentalimpact assessments, and changes or further deterioration in general economic conditions. We will not achieve the maximum mine lives of our projects,or be able to mine all reserves at our projects, if we do not obtain relevant permits for our operations. Our Fort Hills project is not controlled by us andconstruction and production schedules may be adjusted by our partners. The Corridor project will be jointly owned. The effect of the price of oil onoperating costs will be affected by the exchange rate between Canadian and U.S. dollars.
Statements concerning future production costs or volumes are based on numerous assumptions of management regarding operating matters and onassumptions that demand for products develops as anticipated, that customers and other counterparties perform their contractual obligations, thatoperating and capital plans will not be disrupted by issues such as mechanical failure, unavailability of parts and supplies, labour disturbances,interruption in transportation or utilities, adverse weather conditions, and that there are no material unanticipated variations in the cost of energy orsupplies.
We assume no obligation to update forward-looking statements except as required under securities laws. Further information concerning assumptions,risks and uncertainties associated with these forward-looking statements and our business can be found in our Annual Information Form for the yearended December 31, 2014, filed under our profile on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov) under cover of Form 40-F.
3
Long-Term Strategy
Diversification to expand opportunity set
Long life assets
Low half of the cost curve
Appropriate scale
Low risk jurisdictions
5
• Headquartered in Vancouver, Canada, with operations in the Americas
• Strategy focused on long life assets in stable jurisdictions
• Sustainability: Key to managing risks and developing opportunities
Strong Resource Position1
With Sustainable Long-Life AssetsCoal Resources ~100 years
Copper Resources ~30 years
Zinc Resources ~15 years
Energy Resources ~50 years
Attractive Portfolio of Long-Life Assets
1. Reserve and resource life estimates refer to the mine life of the longest lived resource in the relevant commodity assuming production at planned rates and in some cases development of as yet undeveloped projects. See the reserve and resource disclosure in our most recent Annual Information Form, available on SEDAR and EDGAR, for additional detail regarding underlying assumptions.
6
Coal35%
Copper 55%
Zinc45%
Teck has good leverage to stronger zinc and copper markets, and benefits from the weaker Canadian dollar
The Value of Our Diversified Business Model
Cash Operating Profit YTD Q3 2015
Production Guidance2
Unit of Change
Estimated Profit 3
EstimatedEBITDA3
Coal 27 Mt US$1/tonne $21M /$1∆ $32M /$1∆
Copper 350 kt US$0.01/lb $5M /$.01∆ $8M /$.01∆
Zinc 935 kt US$0.01/lb $8M /$.01∆ $12M /$.01∆
$C/$US C$0.01 $32M /$.01∆ $52M /$.01∆
2015 Leverage to Commodities & FX1
1. As of December 31, 2014.2. Shows mid-point of 2015 guidance ranges at the start of the year. Current mid-point of guidance ranges are 25.5 Mt coal and
347.5 kt copper. Zinc includes 650kt of zinc in concentrate and 285kt of refined zinc.3. Based on $1.20 CAD/USD, and budgeted commodity prices. The effect on our profit and EBITDA will vary with commodity price
and exchange rate movements, and commodity sales volumes.
Base Metals
65%
7
• Up cycles in green and down cycles in orange; plotted against duration in years on the right scale• Peak-to-trough price moves during the cycle in blue; plotted against the left axis• Up cycles tend to be similar in duration but with higher percentage gains
Source: CRU, Teck
Steelmaking Coal Price Cycles -Current Cycle Long and Deep
-2%
1%
-26%
13%
-12%
19%
-25%
17%
-0.1%
146%
-13%
144%
-31%
68%
-72%
1 12 2
43 3
21
3
1 1 12
5
0
3
6
9
12
15
-250%
-200%
-150%
-100%
-50%
0%
50%
100%
150%
200%
250%
Pea
k to
Tro
ugh
Cyc
le %
Cha
nge
Years
9
Steelmaking Coal Will Slowly Rebalance
• Excess supply continues to pressure prices & margins• US exports ~2.5 times above historical average• Reduced imports into China, although some evidence of destocking• Stronger fundamentals ex-China
Tighter Market ex-ChinaUS Steelmaking Coal Exports (ex. Canada)
*2015 Jan-Oct annualized data Source: GTIS, CRU
-25
-20
-15
-10
-5
0
5
10
China EU LatinAmerica
India JKTSe
abor
nem
et. c
oal i
mpo
rts c
hang
e, M
t
Looking further ahead, seaborne met. coal demand from China will be supportive of a market rebalancing
39 Mt
0
10
20
30
40
50
60
70
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
A*
Mt
2000-2009average at 23Mt
2010-2014average at 55Mt
10
• Up cycles in green and down cycles in orange; plotted against duration in years on the right scale• Peak-to-trough price moves during the cycle in blue; plotted against the left axis• Up cycles tend to be longer, with higher percentage gains
Copper Price Cycles –Current Cycle Deepest since 1920’s
72.3%
-37.2%
132.5%
-56.7%
45.2%
-68.4%
284.4%
-12.6%
115.3%
-27.9%
91.6%
-11.7%
50.4%
-14.7%
53.8%
-34.5%
97.9%
-30.1%
51.0%
-45.2%
332.9%
-26.4%
68.2%
-46.4%
5 46
4
8
3
16
1
75
9
2 24
2
6
3 42
4
8
2 2
5
0
5
10
15
20
25
30
35
40
-500%
-400%
-300%
-200%
-100%
0%
100%
200%
300%
400%
YearsP
eak
to T
roug
h C
ycle
% C
hang
e
Source: Wood Mackenzie, USGS, WBMS, Teck11
Copper Costs Higher than Understood
Source: Bernstein Research
Bernstein Estimated Margin After Sustaining Capex
(5,000)
(4,000)
(3,000)
(2,000)
(1,000)
-
1,000
2,000
3,000
4,000
5,000
6,000
- 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000
Mar
gin
(US$
/tonn
e)
Cumulative Copper Production (kt)
At US$2.00 Copper At US$2.40 Copper
At US$2.40 6,239kt
72nd Percentile
At US$2.004,270kt
49th Percentile
12
• Up cycles in green and down cycles in orange; plotted against duration in years on the right scale• Peak-to-trough price moves during the cycle in blue; plotted against the left axis• Up cycles tend to be longer, with higher percentage gains
Zinc Price Cycles –Current Cycle Longest Since 1920’s
YearsP
eak
to T
roug
h C
ycle
% C
hang
e
Source: Wood Mackenzie, USGS, WBMS, Teck
50%
-25%
50%
-26%
168%
-49%
12%
-40%
42%
-10%
8%
-55%
125%
-29%
193%
-10%
48%
-41%
26%
-24%
26%
-11%
25%
-7%
188%
-20%
44%
-14%
26%
-22%
116%
-36%
11%
-21%
21%
-8%
26%
-20%
9%
-31%
311%
-51%
36%
-32%
5
2
4
2 23
1 12
5
1
3
5
1
10
12
32 2 2
1
5
2
7
3 3
12 2
32
1 12
1 1 12 2
43
45
0
5
10
15
20
25
-500%
-400%
-300%
-200%
-100%
0%
100%
200%
300%
400%
1901
-190
619
06-1
908
1908
-191
219
12-1
914
1914
-191
619
16-1
919
1919
-192
019
20-1
921
1921
-192
319
23-1
928
1928
-192
919
29-1
932
1932
-193
719
37-1
938
1938
-194
819
48-1
949
1949
-195
119
51-1
954
1954
-195
619
56-1
958
1958
-196
019
60-1
961
1961
-196
619
66-1
968
1968
-197
519
75-1
978
1978
-198
119
81-1
982
1982
-198
420
00-2
002
1986
-198
919
89-1
991
1991
-199
219
92-1
993
1993
-199
519
95-1
996
1996
-199
719
97-1
998
1998
-200
020
00-2
002
2002
-200
620
06-2
009
2009
-201
120
11-2
016
13
$0
$100
$200
$300
$400
$500
$600
Spot Annual
Spot TCs vs. Realized Annual TCs
LME Zinc Stocks – Since Dec 2012
Zinc Market Poised for Change
• Supply situation fundamentally unchanged
• Growth in zinc demand expected to outpace supply
• Recent decline in demand growth caused inventory drawdown to slow
• Terminal markets absorbing unreported stock flows
4005006007008009001,0001,1001,200
50¢
60¢
70¢
80¢
90¢
100¢
110¢
120¢
Stocks Price
US
¢/lb
thou
sand
tonn
es
plotted to Jan. 12, 2015
US$
/dm
t
plotted to December 2015
Source: Teck, CRU14
Responding to Difficult Market Conditions
• Further cost reductions achieved & focus on resetting our cost base− Gross profit1 up 5% in steelmaking coal
• ~C$1B in cash generated via two precious metal streaming agreements
• Strong financial position, with a cash balance2 of ~$1.8B− Exceeds the ~$1.5B of remaining Fort Hills capex− Expect to achieve year-end cash balance of ~$1.8B3
• Further capital and operating cost reductions announced
1. Before depreciation and amortization.2. As at October 21, 2015.3. As at October 21, 2015, and assuming commodity prices as of that date, C$/US$ exchange rate of 1.33 ,Teck’s 2015
guidance for production, costs and capital expenditures, existing US$ debt levels and no unusual transactions.16
4634
35
28
3
2
Q3 2014 Q3 2015
Delivering Results in Cost Management
1. Does not include deferred stripping or capital expenditures. 2. As compared with Q3 2014. 3. After by-product credits.4. Includes co-product zinc production in our copper business unit.
24%
Steelmaking Coal Unit Costs1
(US$/tonne)
64
84
Site
Transport
Inventory
Q3 2014 Q3 2015
1.641.44
Copper Total Cash Unit Costs1,3
(US$/lb)
xx%12%
Coal unit costs1
US$64/tReduction of US$20/t2
Copper cash unit costs1,3
US$1.44/lbReduction of US$0.20/lb2
17
Ongoing Focus on Conserving Capital And Lowering Operating Costs
• Achieved >$650M in sustainable cost reductions from 2012-2014, and targeting an additional ~$100M in 2015
• Implementing additional measures:− Cut the dividend to $0.10/share on an annualized basis− $300M of operating cost savings− $350M of capital spending reductions and deferrals− Elimination of 1,000 additional positions, including senior management− Suspension of the Coal Mountain Phase 2 project
Expect to achieve a total spending reduction of $650M in 2016
18
$0
$250
$500
$750
$1,000
$1,250
$1,500
$1,750
$2,000
$2,250
$2,500
$2,750
$3,000
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
US$
M
191. As at October 21, 2015.2. Assumes current commodity prices, C$/US$ exchange rate of 1.31 ,Teck’s 2015 guidance for production, costs and capital
expenditures., existing US$ debt levels and no unusual transactions
Strong Financial Position1
• ~$1B in cash generated via two precious metal streaming agreements
• Current cash balance1 of ~$1.8B− Exceeds the ~$1.5B of remaining Fort Hills capex
• No debt due until 2017• Opportunities to further strengthen liquidity
2017Q1: US$300MQ3: US$300M
Expect to achieve year-end cash balance of ~$1.8B2
Credit Facilities1
Note Amount ($M) Commitment Maturity Letters of Credit
Drawn / Limit ($M)Available
($M)
1 US 3,000 Committed July 2020 None / US 1,000 US 3,000
2 US 1,200 Committed June 2017 None / None US 1,200
3 C 1,500 Uncommitted n/a C 1,150 C 350
Total2 C 1,150 C 5,810
• Unsecured; any borrowings rank pari passu with outstanding public notes• Only financial covenant is debt to debt-plus-equity of <50% • Availability not affected by commodity price changes• No requirement to maintain a particular credit rating
Available for general corporate purposes
1. As at October 21, 2015.2. Assumes C$/US$ exchange rate of 1.30.
20
Positioned to Weather The Market Downturn & Emerge Stronger and More Diversified
Attractive portfolio of long-life assets & resources
Good leverage to base metals markets
Attractive positions on commodity cost curves & focus on resetting our cost base
<20 months from start of commissioning at Fort Hills
Strong cash balance, ample credit facilities & opportunities to further strengthen liquidity
21
• In 2011, we launched our formal sustainability strategy
• Organized around 6 focus areas representing our most material sustainability challenges and opportunities
• Set short-term (2015) and long-term (2030) goals and vision for each area
• On track to achieve all of our 2015 goals
Our Sustainability Strategy
24
Received the PDAC 2014 Environmental and Social Responsibility Award
Best 50 Corporate Citizens in Canada 2015
On the Dow Jones Sustainability World Index six years in a row
One of top 100 most sustainable companies in the world and one of Canada’s most sustainable companies
Top 50 Socially Responsible Corporations in Canada
Received the Globe Foundation Environment Award in 2014
25
External Recognition
Diversified Portfolio of Key Commodities
NorthAmerica
20%Europe
18%
LatinAmerica
3%
China26%
Asia excl. China33%
26
Diversified Global Customer Base
Coking coal CopperZinc LeadMoly SilverGermanium Indium
Source: Teck; 2014 revenue
Actual 2014 Current 2015 GuidanceSteelmaking Coal
Coal production 26.7 Mt 25-26 MtCoal site costs C$54 /t1
Coal transportation costs C$38 /tCombined coal costs C$92 /t C$83-86 /tCombined coal costs US$84 ~US$64-66 /t2
CopperCopper production 333 kt 345-350 ktCopper cash unit costs3 US$1.65 /lb US$1.45-1.55 /lb
ZincZinc in concentrate production4 660 kt 635-665 ktRefined zinc production 277 kt 280–290 kt
Production & Site Cost Guidance
1. Including inventory adjustments.2. At $1.30 CAD/USD.3. Net of by-product credits.4. Including co-product zinc production from our copper business unit.
27
($M) SustainingMajor
EnhancementNew Mine
Development Sub-totalCapitalized Stripping Total
Coal $75 $30 $ - $105 $395 $500
Copper 200 15 105 320 225 545
Zinc 180 - - 180 60 240
Energy - - 910 910 - 910
Corporate 10 - - 10 - 10
TOTAL $465 $45 $1,015 $1,525 $680 $2,205
Total capex of ~$1.5B, plus capitalized stripping
2014A $511 $165 $822 $1,498 $715 $2,213
Current 2015 Capital Expenditures Guidance
28
Credit Ratings
S&P Moody’s Fitch DBRS
BBB Baa2 BBB BBB
BBB- Baa3 BBB- BBB (low)
BB+ Ba1 negative
BB+negative
BB (high)negative
BBnegative Ba2 BB BB
BB- Ba3 BB- BB (low)
Inve
stm
ent
Gra
deN
on-In
vest
men
t G
rade
Supported by:• Diversified business model• Low risk jurisdictions• Low cost assets• Conservative financial policies• Significant cost reductions• Capital discipline• Achieving production guidance• Production curtailments in coal• Dividend cut• Streaming transactions
Constrained by:• Debt-to-EBITDA metric, due to weak prices
Ratings reflect the current economic environment
As at January 15, 2016.29
Operation Expiry DatesCoal Mountain In Negotiations - December 31, 2014Antamina In Negotiations - July 23, 2015Elkview In Negotiations - October 31, 2015Fording River April 30, 2016Highland Valley Copper September 30, 2016Trail May 31, 2017Cardinal River June 30, 2017
Quebrada BlancaOctober 30, 2017
November 30, 2017January 31, 2018
Quintette April 30, 2018Line Creek May 31, 2019
Carmen de Andacollo September 30, 2019December 31, 2019
Collective Agreements
30
$0
$10
$20
$30
$40
$50
$60
$70
80
100
120
140
160
180
200
220
240
260
Bloomberg Commodity Price Index (Left Axis) Teck (Right Axis)
Teck Stock Price vs. Bloomberg Commodity Price Index (2000-present)
Commodity Prices Impact Stock Price
Plotted to January 12, 2016
31
70
80
90
100
110
120
130
140
150
$ / t
onne AUS$
Stronger US dollar favours producers outside of the US
Source: Argus, Bank of Canada
• >50 Mt cutbacks announced with over 60% expected to be implemented by the end of 2015
• Require additional cutbacks to achieve market balance
• US coal production high end of cost curve and no currency benefit
Coal Prices By CurrencyArgus FOB Australia
CDN$
US$
Met Coal Market Slowly Rebalancing; FX Assisting Producers Outside USA
plotted to January 11, 2016
33
0
3
6
9
12
15
Jan-
10A
pr-1
0Ju
l-10
Oct
-10
Jan-
11A
pr-1
1Ju
l-11
Oct
-11
Jan-
12A
pr-1
2Ju
l-12
Oct
-12
Jan-
13A
pr-1
3Ju
l-13
Oct
-13
Jan-
14A
pr-1
4Ju
l-14
Oct
-14
Jan-
15A
pr-1
5Ju
l-15
Oct
-15
45 55 65 75
China
Traditional Steel Markets
• China slowing
• JKT stable
• EU stable
Rest of the World
• India good growth
• Brazil stable
• US declining
Monthly Hot Metal Production
Source: WSA, based on data reported by countries monthly; NBS
Mt
Update to November 2015
Global Hot Metal Production
JKT
India
Europe
USA
Brazil
34
Source: WSA, NBS, Wood Mackenzie, CRU1. Europe includes 12 countries.
Crude steel production to grow at ~1% CAGR between 2014 and 2020
Ex-China seaborne demand for steelmaking coal is forecasted to increase
by >2% CAGR in the same period
Crude Steel Production 2014-2020Crude Steel Production (Mt) 2014 2015 Nov YTD
annualized
Global* 1,647 (+1.2% YoY) 1,606 (-2.5% YoY)
China 823 (+0.9% YoY) 805 (-2.2% YoY)
Global, ex-China* 825 (+1.5% YoY) 801 (-2.8% YoY)
JKT 205 (+3% YoY) 197 (-3.9% YoY)
Europe 208 (+1.3% YoY) 203 (-2.3% YoY)
India 83 (+2.3% YoY) 90 (+7.8% YoY)
* Global production includes production only for the countries which report on monthly basis
Crude Steel Production Continues to Grow
35
• Minimal export growth from Australia while others pull back- Australian and Canadian imports to
Europe pushing out US supplies- Exports to China reduced from all 3
supply areas
• China seaborne imports offset production curtailments
US Steelmaking Coal Exports
Australian Steelmaking Coal Exports
Nov YTD 2015 Growth: Seaborne Steelmaking Coal Exports vs. China Seaborne Imports
Source: GTIS; T.Parker
Production Cuts Offset by China’s Imports
Canada Steelmaking Coal Exports
20
25
30
35
40
45
Nov-14YTD
EU & CIS China S.America India JKT Others Nov-15YTD
Mt
120130140150160170180
Nov-14YTD
India EU & CIS S.America JKT Others China Nov-15YTD
Mt
15
20
25
30
Nov-14YTD
China S.America JKT India EU & CIS Others Nov-15YTD
Mt
-8.8
-3.3
0.6
-9.5-12
-10
-8
-6
-4
-2
0
2
USA Canada Australia China
Mt
36
Source: Teck estimates based on public announcements* Production cuts are total market curtailments including sustaining cuts (mine idlings) and period cuts (guidance reductions).
Curtailments Production Curtailments By RegionCumulative Production Curtailments
• >50 Mt cutbacks announced with over 60% expected to be implemented by the end of 2015
• Require additional cutbacks to achieve market balance• Low prices also impacting major players• US coal production high end of cost curve and no currency benefit
Steelmaking Coal Market Curtailments
0
10
20
30
40
50
60
2014 2015 2016 2017 2018+
Mt
Mt
0 10 20 30
Australia
USA
Canada
NewZealand
OthersPeriod Cuts/Guidance Adj
Sustaining Cuts
Mt
37
Relocation to China’s coastline facilitates access to seaborne raw materials
Sources: NBS, CISA
Chinese Steel Industry Moving to the Coast
38
Xinjiang
Tibet
Qinghai
Sichuan
Inner Mongolia
Henan
Shanxi
GuangxiGuandong
Fujian
Zhejiang
Jiangsu
Shandong
Laioning
Jilin
Heilongjiang
GuizhouHunan
Hubei
Jiangxi
Anhui
ShaanxiGansu
Ningxia
Qinghai
Sichuan
Yunnan
Beijing
Hebei
WISCO Fangchenggang Project• Major infrastructure in place. WISCO Fangchenggang Steel
Company established in Sep to wholly manage the project.• Cold roll line scheduled to be commissioned in H1 2015. Other
lines are scheduled to start successively within the year.• Blast furnaces (BFs) in the originally approved plan. Billet
rolling line only at this time. No timeline for BFs currently.• Targeting 5 Mt steel products in 2016 and 10 Mt in 2017.
Baosteel Zhanjiang Project• Coke ovens for BF #1 commissioned in July 2015. • BF #1 commissioning scheduled for September 2015
Ningde Steel Base• Proposed but no progress yet.
Ansteel Baiyunquan Project• Phase 1 (~ 5.4 Mt pig iron, 5.2 Mt crude
steel and 5 Mt steel products) in 2013.• Phase 2 (5.4 Mt BF) planned but no
progress yet.
Capital Steel Caofeidian Project• Planned 20 Mtpa steel capacity. • Phase 1 (10 Mt) completed in 2010.• Phase 2, planned with the investment of ~
US$7 billion, is kicked off soon in late Aug and scheduled to be completed by 2018. Capacity: hot metal 8.9Mt, crude steel 9.4Mt, steel products 9.0Mt.
Shandong Steel Rizhao Project• Planned 21.35 Mt crude steel. • Phase 1 (8.5 Mt) approved in Feb 2013• Construction started in Sep 2014 and
scheduled to commission by the end of 2016.
40%
45%
50%
55%
60%
65%
70%
0100200300400500600700800900
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Milli
on to
nnes
Total Coastal Coastal %
We Are a Leading Steelmaking Coal Supplier To Steel Producers Worldwide
NorthAmerica
~5%Europe~15%China
~25%
High quality, consistency, reliability, long-term supply
Asia excl. China~50%
Source: Teck; 2014
LatinAmerica
~5%
Proactively realigning sales with changing market39
0
50
100
150
200
250
300
350
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
US$
/ to
nne
Teck Realized Price (US$) Benchmark Price
Discount to the benchmark price is a function of:
1. Product mix: >90% hard coking coal
2. Direction of quarterly benchmark prices and spot prices- Q4 2015 benchmark for
premium products is US$89/t
Historical Average Realized Prices
Average Realized Price in Steelmaking Coal
Average realized price discount: ~8-9%Average realized % of benchmark: 91-92% (range: 88%-96%)
96%
88%
93%
94%92% YTD
91%
40
• Temporary closures in Q3 2015 of ~3 weeks at all 6 mines to align production and inventories with market conditions
• Quarterly production reduced ~1.5 Mt
• Annual cost guidance lowered
• Capitalized stripping guidance reduced
• Continuing to meet all contracted and committed coal sales for our entire suite of products
Disciplined approach to managing production to market conditions andcost focus to ensure our mines are well-positioned when markets improve
Teck Response to Coal Market Conditions
Quarterly Benchmark vs. Argus Spot Price
100
125
150
175
200
225
250
275
300
325
350
$ / to
nne
41
0
20
40
60
80
100
120
2014 (C$1.10/US$) YTD Q3 2015 (C$1.36/US$)
US$
/t
Site Costs TransportationInventory Write-Down Capitalized StrippingSustaining Capital
105
75
Total cash cost of ~US$75 at C$1.36/US$
Total Cash Cost Reductions YTD 2015
a
42
US$/t
YTD Q3 2015(C$1.26/ US$)
YTD Q3 2015(C$1.36/ US$)
Site1 $39 $35
Transportation $29 $26
IFRS Total $67 $62
Capitalized Stripping $12 $11
Full Cash Cost $79 $73
Sustaining Capex $2 $2
Total Cash Cost $81 $75
1. Includes inventory write-downs.
IFRS Costs
Steelmaking Coal Costs
Significant Long-Term Coal Growth Potential
Potential Production Increase ScenariosTeck’s large resource base supports several options for growth:• Quintette restart (up to 4 Mtpa)
fully permitted
• Brownfields expansions- Elkview expansion - Fording River expansion- Greenhills expansion
• Capital efficiency and operating cost improvements will be key drivers
-
10
20
30
40
50
Prod
uctio
n (M
t)
FRO GHO CMO EVO LCO
CRO QCO 28 Mt 40 Mt
Time Conceptual
Potential to grow production when market conditions are favourable43
>75 Mt of West Coast Port Capacity PlannedTeck Portion at 40 Mt
• Exclusive to Teck • Recently expanded to 12.5 Mt • Planned growth to 18.5 Mt
Westshore Terminals
Neptune Coal Terminal
Ridley Terminals
West Coast Port Capacity
• Current capacity: 18 Mt• Expandable to 25 Mt• Teck contracted at 3 Mt
• Teck is largest customer at 19 Mt• Large stockpile area• Recently expanded to 33 Mt• Planned growth to 36 Mt
Milli
on T
onne
s (N
omin
al)
Teck’s share of capacity exceeds current production plans, including Quintette
12.518
336
7
3
0
5
10
15
20
25
30
35
40
Neptune CoalTerminal
RidleyTerminals
WestshoreTerminals
Current Capacity Planned Growth
44
0%
20%
40%
60%
80%
100%
CO2 NOx Particulate SOxDiesel Natural Gas
LNG for Haul Trucks Project
• Pilot project underway to evaluate running Teck haul trucks on a blend of diesel and LNG- Six haul trucks at Fording River- First use of LNG as a haul truck fuel at a Canadian mine site
• Has the potential to eliminate ~35,000 tonnes of CO2 emissions annually at our steelmaking coal operations, and to reduce our fuel costs by >$20M per year across our operations
Comparison of Fuel Cost
$-
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
LNG / Diesel Liter Diesel / LiterGas Cost Liquifaction Carbon Tax Delivery Diesel
Pric
e pe
r Lite
r
Comparison of Emissions
% o
f Die
sel E
mis
sion
s
45
• Around the world, and especially in China, blast furnaces are getting larger and increasing PCI rates
• Coke requirements for stable blast furnace operation are becoming increasingly higher
• Teck coals with high hot and cold strength are ideally suited to ensure stable blast furnace operation
• Produce some of the highest hot strengths in the world50 60 70 80 90 100
South Africa
Japan (Sorachl)
Japan(Yubarl)
U.S.A.Canada OtherTeck HCCAustraliaJapanSouth Africa
Australia(hard coking)and Canada
U.S.A.
Australia(soft coking)
10
20
30
40
50
60
70
80
Drum Strength Dl 30 (%)
CSR
Teck HCC
46
Coking Coal Strength
High Quality Hard Coking Coal
Base Metal Stocks Low on Days Consumption
Source: LME, ICSG, ILZSG* Charts as of January 12, 2016
48
0
200
400
600
800
1000
1200
1400
0¢
50¢
100¢
150¢
200¢
250¢
300¢
350¢
400¢
450¢
500¢
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
LME Stocks Comex SHFE Price
Historic Copper Metal Prices & StocksU
S¢/lb
thou
sand
tonn
es
plotted to Jan. 12, 2016
Daily Copper Prices & Stocks
Source: LME, ICSG, ILZSG49
16,000
16,500
17,000
17,500
18,000
18,500
Apr
-15
May
-15
Jun-
15
Jul-1
5
Aug
-15
Sep
-15
Oct
-15
Nov
-15
Dec
-15
5% Disruption net of ProjectsMarket Adjustment2017 Adjusted
15,000
15,500
16,000
16,500
17,000
17,500
Feb-
13
Jun-
13
Oct
-13
Feb-
14
Jun-
14
Oct
-14
Feb-
15
Jun-
15
Oct
-15
2015 AdjustedMarket Adjustment5% Disruption
• Down 590,000 tonnes from February 2013 estimates
• Down 1.8 Million tonnes from guidance.
• Down 1,385 kt from April 2014 estimates• New projects production down by 67% • Net New Mine Production in 2016 over
2015 now only 0.9%, less than 290kmt of growth.
• SXEW (not shown) will drop 120kmt
Copper Mine Production Forecasts Continue to Decline
Source: Wood Mackenzie
thou
sand
tonn
es c
onta
ined
cop
per
2015 2016
15,000
15,500
16,000
16,500
17,000
17,500
18,000
18,500
Apr
-14
Jun-
14A
ug-1
4O
ct-1
4D
ec-1
4Fe
b-15
Apr
-15
Jun-
15A
ug-1
5O
ct-1
5D
ec-1
5
5% Disruption & ProjectsMarket Adjustment2016 Adjusted
2017
• Down 883 kt from April 2015 estimates • New projects production down by 43%
or 375 kmt
thou
sand
tonn
es c
onta
ined
cop
per
thou
sand
tonn
es c
onta
ined
cop
per
50
(300)
(250)
(200)
(150)
(100)
(50)
0
Thou
s. M
t-950
-859
-776-851
-945
-584
-839
-973
-831
-968
-1,015-1,200
-1,000
-800
-600
-400
-200
02005 2006 2007 2008 2009 2010 2011 2012 2013 2014
2015YTD
Thou
sand
tonn
esDisruptions Continue in Copper
Significant Copper Concentrate Disruptions Breakdown of Disruptions including SXEW
plotted to December 2015
plotted to December 2015
Source: Teck, CRU51
0¢
10¢
20¢
30¢
40¢
50¢
60¢
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Standard Spot High Grade Spot Realised TC/RC
Copper Concentrate TC/RCs
Copper Concentrate TC/RC
plotted to December 2015
Source: Teck, CRU52
Margin Compression at Its Lowest PointWorse than During the Global Financial Crisis
Source: Wood Mackenzie54
0100200300400500600700800900
1,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Cathode Concs Scrap Blister/Semis
000’
s to
nnes
(con
tent
)
Net Copper Imports Down 9% in Q1 2015; YTD Nov Up 2.1%
Source: NBS
Chinese Copper Imports Switch from Cathode to Concentrates
Updated to November 2015
56
Significant Chinese Copper Demand Remains
…But Will Add Significantly in Additional Tonnage Terms
Annual Growth Rate of Chinese Copper Consumption to Slow Dramatically…
China expected to add almost as much to global demand in the next 15 years as the past 25 years
Source: Wood Mackenzie, Teck
-
200
400
600
800
1,000
1,200
1,400
1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030
0%
5%
10%
15%
20%
25%
30%
1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030
Annual Avg. 11.9%
Annual Avg. 2.8%
Annual Avg. Growth356 Mt/yr
Annual Avg. Growth325 Mt/yr
Thou
sand
tonn
es
57
0
500
1,000
1,500
2,000
2,500
2010 2011 2012 2013 2014 2015
China Power Grid Spending Down on Anti Corruption Campaign – Starting to Improve
China Floor Space Under Construction Down & Sales Up, as Lower Interest Rates Take Effect
Source: China Electricity Council, NBS, China IOL, China Association of Automobile Manufacturers* Data to November 2015
China Air Conditioner Inventory Drawing Down & Sales Improving
China Auto Manufacturing SlowsDue to Slower Economy and High Sales in 2014
Thou
sand
Uni
ts
02,0004,0006,0008,000
10,00012,00014,000
2010 2011 2012 2013 2014 2015
Production Sales Inventory
Thou
sand
Uni
ts
%, Y
oY
-40
-20
0
20
40
60
80
2010 2011 2012 2013 2014 2015Area under construction Sales
0
10,000
20,000
30,000
40,000
50,000
60,000
2010 2011 2012 2013 2014 2015
RM
B m
nChinese Copper Demand IndicatorsMostly Negative – But Some Bright Spots
58
Copper Scrap Supply vs. LME Price
Copper Scrap Supply
Source: Wood Mackenzie
Copper scrap supply is strongly correlated with price
10%11%12%13%14%15%16%17%18%19%20%21%22%23%24%25%26%
$-
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Copper Price (USD/lb) Scrap as a % Consumption
59
-100
0
100
200
300
400
500
600
700
800
Apr
-15
May
-15
Jun-
15
Jul-1
5
Aug
-15
Sep
-15
Oct
-15
Nov
-15
Dec
-15
0
100
200
300
400
500
600
700
800
Feb-
13
Jun-
13
Oct
-13
Feb-
14
Jun-
14
Oct
-14
Feb-
15
Jun-
15
Oct
-15
Since April 2014• Despite a 725,000 tonne drop in demand
• The surplus is down 750,000 tonnes
Source: Wood Mackenzie
thou
sand
tonn
es c
onta
ined
cop
per
2015 2016
0
100
200
300
400
500
600
700
800
Apr
-14
Jun-
14A
ug-1
4O
ct-1
4D
ec-1
4Fe
b-15
Apr
-15
Jun-
15A
ug-1
5O
ct-1
5D
ec-1
5
2017
thou
sand
tonn
es c
onta
ined
cop
per
thou
sand
tonn
es c
onta
ined
cop
per
Global Copper Cathode BalancesWood Mackenzie’s Outlook is Trending Down
Since December 2014• Despite a drop of 660,000 tonnes to Wood
Mackenzie’s demand estimates
• Their surplus is down 700,000 tonnes
Since April 2015• Down from a 510,000 tonnes surplus
• Despite a 510,000 tonne drop in demand
60
0
100
200
300
400
500
600
700
800
900
Global Refined Copper BalancesWood Mackenzie’s Outlook is Trending Down
‘000
s to
nnes
cop
per
Surplus only 0.9% of Global Demand
0
100
200
300
400
500
600
700
800
900
Jan-
13M
ar-1
3M
ay-1
3Ju
l-13
Sep
-13
Nov
-13
Jan-
14M
ar-1
4M
ay-1
4Ju
l-14
Sep
-14
Nov
-14
Jan-
15M
ar-1
5M
ay-1
5Ju
l-15
Sep
-15
Nov
-15
Wood Mackenzie 2015F Refined Surplus Wood Mackenzie 2016F Refined Surplus
Surplus only 2% of Global Demand
‘000
s to
nnes
cop
per
Source: Wood Mackenzie61
• At 2% global demand growth, 400 ktof new supply needed annually
• Structural deficit starts in 2018
• Project developments slowed due to lower prices, higher capex, corporate austerity, permitting & availability of financing
Forecast Copper Refined Balance
Long-Term Copper Mine Production Still Needed
Source: WM, CRU, ICSG, Teck
(2,500)
(2,000)
(1,500)
(1,000)
(500)
0
500
1,000
2012 2013 2014 2015 2016 2017 2018 2019 2020
Thou
sand
tonn
es
62
Building Partnerships: Corridor Project
Teck and Goldcorp have combined Relincho and El Morro projects and formed a 50/50 joint venture company
• Committed to building strong, mutually beneficial relationships with stakeholders and communities
Capital smart partnership • Shared capital, common infrastructure• Shared risk, shared rewards
Benefits of combining projects include:• Longer mine life• Lower cost, improved capital efficiency• Reduced environmental footprint• Enhanced community benefits• Greater returns over either standalone
project
63
Corridor Project Summary
Initial Capital
$3.0 - $3.5billion
Copper Production1
190,000tonnes per year
Gold Production1
315,000ounces per year
Mine Life
32+years
Copper in Reserves2
16.6billion pounds
Gold in Reserves2
8.9million ounces
Note: Conceptual based on preliminary design from the PEA1. Average production rates are based on the first full ten years of operations2. Total copper and gold contained in mineral reserves as reported separately by Teck and Goldcorp; refer to Appendix A in Additional Information.3. Capital estimate for Phase 1a based on preliminary design shown in 2015 dollars on an unescalated basis64
Copper Development Projects in theAmericas
Corridor is one of the largest open pit copper development projects in the Americas on the basis of copper contained in Proven and Probable Reserves
-
5,000
10,000
15,000
20,000
25,000
Rad
omiro
Tom
ic
Cor
ridor
El A
rco
Que
brad
aB
lanc
a II
Que
llave
co
Agu
a R
ica
Rel
inch
o
El M
orro
Cas
ino
Sch
aft C
reek
Gal
ore
Cre
ek
Rio
Bla
nco
Cop
per E
quiv
alen
t in
Res
erve
s (M
lbs)
Copper-equivalent contained in Reserves (Mlbs)(North & South American Copper Projects)
Note: Copper equivalent reserves calculated using $3.25/lb Cu and $1,200/oz Au. Does not include copper resource projects that are currently in construction
Source: SNL Metals & Mining, Thomson One Analytics, and company disclosures.65
Historic Zinc Metal Prices & Stocks
Daily Zinc Prices & Stocks
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0¢
50¢
100¢
150¢
200¢
250¢
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
LME SHFE Price
US¢
/lb
thou
sand
tonn
es
plotted to January 12, 2015
Source: LME, SHFE67
0
1,000
2,000
3,000
4,000
5,000
6,000
0
100
200
300
400
500
600
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2013 2014 2015
Monthly Chinese Zinc Mine Production
LME Zinc Stocks
Zinc Mine ProductionUndersupplied, Even With Lower Growth
4005006007008009001,0001,1001,200
50¢
60¢
70¢
80¢
90¢
100¢
110¢
120¢
Stocks Priceplotted to
Jan. 12, 2015
plotted to November, 2015
• Metal market in deficit
• LME stocks down >775 kt over 27 months; sub-500 kt recently for the first time since 2010
• ‘Off-market’ inventory position to work down also
• Large periodic increases indicate significant off-market inventories flowing through the LME to consumers
• Chinese zinc mine production is down in the last 27 months
US
¢/lb
thou
sand
tonn
es
Source: LME, NBS, CNIA68
• Down 770 kt from January 2015 estimates
• Down 1,150 kt from January 2015 estimates
Zinc Mine Production Wood Mackenzie’s Outlook is Trending Down
thou
sand
tonn
es c
onta
ined
zin
c
2015 2016 2017
• Down 600 kt from April 2015 estimates • New project production down by 22%
thou
sand
tonn
es c
onta
ined
zin
c
thou
sand
tonn
es c
onta
ined
zin
c
12,000
12,500
13,000
13,500
14,000
14,500
15,000
Feb-
13M
ay-1
3A
ug-1
3N
ov-1
3Fe
b-14
May
-14
Aug
-14
Nov
-14
Feb-
15M
ay-1
5A
ug-1
5N
ov-1
5
12,000
12,500
13,000
13,500
14,000
14,500
15,000
12,000
12,500
13,000
13,500
14,000
14,500
15,000
Apr
-15
May
-15
Jun-
15
Jul-1
5
Aug
-15
Sep
-15
Oct
-15
Nov
-15
Dec
-15
Source: Wood Mackenzie69
2014-2020 2014-2020
Significant Zinc Mine ReductionsLarge Short-Term Losses, More Long Term
-500
-400
-300
-200
-100
0
Cen
tury
Lish
een
Skor
pion
Red
Dog
Ros
eber
y
Brac
emac
-McL
eod
Rap
ura
Aguc
ha
Pom
orza
ny-O
lkus
z (in
cl B
ulk)
Jagu
ar
Mid
-Ten
ness
ee
Mae
Sod
Ende
avor
0
100
200
300
400
500
Gam
sber
gAn
tam
ina
Dug
ald
Riv
erM
cArth
ur R
iver
Bish
aG
ansu
Jin
hui
Kyzy
l-Tas
htyg
skoe
Shal
kiya
Res
tart
Sind
esar
Khu
rdAg
uas
Teni
das
Cha
ngba
Zaw
ar M
ines
El B
roca
lSa
ngui
kou
Car
ibou
Rea
ctiv
atio
nSa
n C
risto
bal
Pena
squi
to
Source: ICSG, Wood Mackenzie Teck, Company Reports70
LME Zinc Stocks – Since Dec 2012LME Zinc Stocks - 11 Years
Zinc Inventories Declining
400
500
600
700
800
900
1,000
1,100
1,200
50¢
60¢
70¢
80¢
90¢
100¢
110¢
120¢
Stocks Price
0
200
400
600
800
1,000
1,200
1,400
0¢
50¢
100¢
150¢
200¢
250¢
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Stocks Price
US
¢/lb
thou
sand
tonn
esplotted to
Jan. 12, 2016
US
¢/lb
thou
sand
tonn
es
• LME stocks down ~730 kt over 24 months• Large inventory position still to work down but we were recently under 500kt for the
first time since early 2010• Large, sudden increases indicate there are also significant off-market inventories
flowing through the LME to consumers
plotted to Jan . 12, 2016
Source: LME71
• Down 259 kt from December 2014 estimates, taking the market from surplus into a deficit of 96 kt
• Down 442 kt from December 2014 estimates, taking the market further into deficit of 681 kt
thou
sand
tonn
es c
onta
ined
zin
c
2015 2016 2017
• Up 259 kt from April 2015 estimates • Wood Mackenzie expects 300 kt of
projects will come online in 2017 due to higher prices
thou
sand
tonn
es c
onta
ined
zin
c
thou
sand
tonn
es c
onta
ined
zin
c
(300)
(200)
(100)
0
100
200
300
400
Feb-
13M
ay-1
3A
ug-1
3N
ov-1
3Fe
b-14
May
-14
Aug
-14
Nov
-14
Feb-
15M
ay-1
5A
ug-1
5N
ov-1
5
(800)
(600)
(400)
(200)
0
200
400
May
-14
Jul-1
4
Sep
-14
Nov
-14
Jan-
15
Mar
-15
May
-15
Jul-1
5
Sep
-15
Nov
-15 (500)
(400)
(300)
(200)
(100)
0
100
200
300
400
Apr
-15
May
-15
Jun-
15
Jul-1
5
Aug
-15
Sep
-15
Oct
-15
Nov
-15
Dec
-15
Zinc Concentrate BalancesWood Mackenzie’s 2015 and 2015 Outlooks Trending Down
Source: Wood Mackenzie72
Zinc Metal Market Mostly in Deficit Since 2013
-800
-600
-400
-200
0
200
400
2013 2014 2015 2016 2017
WoodMac CRU
Market View – Wood Mackenzie & CRU
• Zinc metal deficit forecasted for 2016 and 2017
• Mine production increases of -2.5% and 8.0% respectively expected for 2016 and 2017. The closure of Century and Lisheen, as well as production cuts due to low zinc prices will cause mine production to decrease in 2016. In 2017, higher prices are expected to bring a large amount of Chinese mine production online and it is expected that Glencore will bring production back in 2017
• Deficits of around 500kt/year in 2016 and 2017 will still result in large draw down of stocks
Zinc Metal Balance
Source: Wood Mackenzie, CRU73
China6%
USA 19%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Galvanized Steel as % Crude ProductionChina Zinc Demand
Construction15%
Transportation 20%
Other 5%
Consumer Goods30%
Infrastructure30%
Chinese Zinc Demand to Outpace Supply
Source: Teck
If China were to galvanize crude steel at half the rate of the US using the same rate of zinc/tonne, a further 2.1 Mt would be added to global zinc consumption
74
• Cheaper imports of HDG have subdued demand growth for zinc in the US
• US Sheet Mills filed a petition with the Department of Commerce in June 2015. We have seen imports decrease since the primary ruling. Especially China, where imports have decrease 98% since Jan 2015.
• Demand for refined zinc seems to be picking up going in 2H 2015
• Premiums have decreased due to the large amount of metal stocks available and lower US demand
0
50
100
150
200
250
300
350
400
450
Thou
sand
tonn
es
Europe Asia China North America Others
Galvanized Sheet US Imports
Imports Affecting US Refined Zinc Demand
Source: GTIS75
• Deficit decreased by 206 kt from December 2014 estimates, to 184 kt
• Deficit increased by 112 kt from December 2014 estimates, to 331 kt
• Increase due to production cuts, resulting in insufficient concentrate available to smelters and less refined production in 2016.
thou
sand
tonn
es
2015 2016 2017
• Deficit increased by 98 kt from April 2015 estimates, to 322 kt
thou
sand
tonn
es
thou
sand
tonn
es c
onta
ined
zin
c
Refined Zinc BalancesWood Mackenzie’s Outlook is Trending Down
(500)
(450)
(400)
(350)
(300)
(250)
(200)
(150)
(100)
(50)
0
Feb-
13M
ay-1
3A
ug-1
3N
ov-1
3Fe
b-14
May
-14
Aug
-14
Nov
-14
Feb-
15M
ay-1
5A
ug-1
5N
ov-1
5
(450)
(400)
(350)
(300)
(250)
(200)
(150)
(100)
(50)
0
May
-14
Jul-1
4S
ep-1
4N
ov-1
4Ja
n-15
Mar
-15
May
-15
Jul-1
5S
ep-1
5N
ov-1
5
(500)
(450)
(400)
(350)
(300)
(250)
(200)
(150)
(100)
(50)
0
Apr
-15
May
-15
Jun-
15
Jul-1
5
Aug
-15
Sep
-15
Oct
-15
Nov
-15
Dec
-15
Source: Wood Mackenzie76
Committed Supply Insufficient for Demand
Forecast Zinc Refined Balance
Source: Teck
• We expect insufficient mine supply to constrain refined production, allowing a refined metal supply increases of only 792 kt between 2014 and 2020
• Over this same period we expect refined demand to increase 2.8 Mt tonnes
• Market in deficit in 2014 and starting in 2016 will be ongoing, large inventory has funded the deficit but this will only continue in 2016.
• Metal market moving into significant deficit with further mine closures and inventories are depleting(3,000)
(2,500)
(2,000)
(1,500)
(1,000)
(500)
0
500
2013 2014 2015 2016 2017 2018 2019 2020
Thou
sand
tonn
es
77
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
79
Mined bitumen is in Teck’s ‘sweet spot’
Global Oil Market to Rebalance
$0
$20
$40
$60
$80
$100
$120
Jan-
10
May
-10
Sep
-10
Jan-
11
May
-11
Sep
-11
Jan-
12
May
-12
Sep
-12
Jan-
13
May
-13
Sep
-13
Jan-
14
May
-14
Sep
-14
Jan-
15
May
-15
Sep
-15
Jan-
16
US
$/bb
l
Plotted toJanuary 12, 2016
Source: EIA Short-Term Energy Outlook, January 2016
2014-2015: Price drop due market imbalance• Supply growing
− OPEC: highest ever production at 31.7 MMbpd; more supply from Iran & Iraq
− Non-OPEC: production growing faster than global demand; abnormally high US inventories
• Demand growth eased in 2014− Slowing growth (especially non-OECD)− Economic uncertainty in China
2016+: Bearish pricing in short term; Expect a more constructive end-2016• Global supply/demand to near balancing late 2016• Decline rates of existing fields require >5 Mbpd new
production annually
West Texas Intermediate (WTI) Price
World Production & Consumption BalanceForecast
-20246
80859095
100
2011
-Q1
2012
-Q1
2013
-Q1
2014
-Q1
2015
-Q1
2016
-Q1
2017
-Q1
MM
b/d
MM
b/d
Implied stock change and balance (right axis)World production (left axis)World consumption (left axis)
80
• 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
• Options for debottlenecking and expansion
50-year assets provide for superior returns operating through many price cycles
The Real Value of Long-Life Assets
Fort Hills Project Indicative Rolling NPV1
1. Indicative NPV assumes US$95 WTI, $1.05 Canadian/US dollar exchange rate, and costs as disclosed with the Fort Hills sanction decision (October 30, 2013).
81
Fort Hills Is One of the Best Undeveloped Oil Sands Mining Leases
Ore grade is a function of the bitumen quantity in the deposit
TV:BIP is a ratio of the total volume of bitumen in place to the total volume of material required to be moved (like a strip ratio)
Strip Ratio vs. Ore Grade
Source: Teck
9.5
10
10.5
11
11.5
12
8910111213
Ore
Gra
de (w
t% b
itum
en)
TV:BIP
Fort Hills
Frontier
• >3 billion bbls of proven plus probable reserves of bitumen
- Production 180,000 barrels per day (bpd) of bitumen
- Teck’s share is significant at 36,000 bpd; equivalent to 13 million barrels per year (Mbpy)
• World-class resource- Average ore grade of 11.4%- Strip ratio of 1.5:1 and TV:BIP of 10.5
• Consistent production year-over-year through multiple decades
- Targeting first oil in Q4 2017- Expect 90% of planned production
capacity within 12 months
82
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• Balanced manpower profileSuncor has completed 4
projects of ~$20 billion over last 5 years, all at or under budget
Benefiting from Suncor’s operational and project development experience
83
• Focusing on productivity improvements- Reduced pressure on skilled labour and contractors
• Benefiting from availability of fabricators for major equipment
• Seeking project cost reductions- Exploring performance improvements with
contractors and suppliers- Building cost savings and improved productivity
expectations into current contract negotiations- Reviewing all indirect costs
Lower Oil Price Environment Provides Opportunities for the Fort Hills Project
“Major projects in construction such as Fort Hills…will move forward as planned and take full advantage of the current economic environment.
These are long-term growth projects that are expected to provide strong returns when they come online in late 2017.”
- Suncor, January 13, 2015
Enhanced ability to deliver on time and on budget84
Teck’s Sanction Capital2
~$2.94billion
Teck’s Estimated 2015 Spend
$850million
Teck’s Remaining Capital3
~$1.5billion
Operating & Sustaining Costs3
$25-28per barrel of bitumen
Sustaining Capital3
$3-5per barrel of bitumen
Teck’s Share of Production
13,000,000bitumen barrels per year
1. All costs and capital are based on Suncor’s estimates.2. Sanction capital is the go-forward amount from the date of the Fort Hills sanction decision (October 30, 2013), denominated in
Canadian dollars and on a fully-escalated basis. Includes earn-in of $240M. 3. As of October 21, 2015.4. Sustaining capital is included in operating & sustaining costs.
Mine life: 50 years
Fort Hills By The Numbers1
85
Royalties based on pre-capital payout. * WTI/WCS Differential based on forecast from Lee & Doma Energy Consulting: 2017/2018 Fort Hills Startup, Constrained Pipe/Excess Rail**Tidewater Premium based on average premium pricing for USGC market via Keystone and Flanagan South PipelinesSource: Alberta Energy bitumen valuation methodology (http://www.energy.alberta.ca/OilSands/1542.asp)1. Estimates are based on C$/US$ exchange rates as shown, expected bitumen netbacks, operating costs of C$25 per barrel (including
sustaining capital of C$3-5 per barrel) and Phase 1 (pre-capital payout) royalties.
Cash Margin1 Calculation Example: Prior to Capital Recovery
Teck seeks to secure dedicated transportation capacity for Fort Hills volumes to key markets to minimize WCS discount
Fort Hills Bitumen Netback Calculation Model
$60$55.50
$37
$10-$11 $13
$-
$10
$20
$30
$40
$50
$60
$70$11
$10
$15.50$7-9$1.25
$22
$3$1-2 $2-3
86
Source: Shorecan, Net Energy, Lee & Doma
Western Canadian Select (WCS)
Average Monthly WTI-WCS DifferentialWestern Canadian Select (WCS) Is The Benchmark Price For Canadian Heavy Oil At Hardisty, Alberta
WCS differential to West Texas Intermediate (WTI) • Contract settled monthly as differential to Nymex WTI• Long term differential of Nymex WTI minus $10-20 US/bbl• Based on heavy/light differential, supply/demand, alternate
feedstock accessibility, refinery outages and export capability− Narrowed in 2014/2015 due to export capacity growth, rail
capacity increases, and short term production outages• Recently improved export capability to mitigate volatility− Further export capacity subject to rigorous regulatory review;
potential impact to WCS differentials.Plotted to Jan 2016
Long-term WCS Differential
$15.69
$23.12
$16.46
WTI (US/bbl) $40 $50 $60 $70 $80 $90 $100WCS Differential to Nymex WTI (US/bbl) -$13.00 -$14.50 -$15.50 -$17.00 -$18.00 -$19.50 -$20.50
*Forecast Assumptions: Fort Hills Startup 2017/2018 with supply/demand model exiting Western Canada in a constrained pipe/excess rail transportation model, per Lee & Doma Energy Consulting.
FORECAST*
$-
$5
$10
$15
$20
$25
$30
$35
$40
$45
WCS Differential (US$/bbl)
87
Source: Shorecan, Net Energy, Lee & Doma
Diluent (C5+) Pricing
Average Monthly WTI/Diluent (C5+) Differential
Diluent (C5+) at Edmonton, Alberta Is the benchmark contract for diluent supply for oil sands
Diluent differential to West Texas Intermediate (WTI)• Contract settled monthly as differential to Nymex WTI• Based on supply/demand, seasonal demand (high in winter, low
in summer), import outages• Long-term diluent (C5+) differential of Nymex WTI +/- $5 US/bbl
Diluent (“Pool” in Edmonton is a common stream of a variety of qualities• Diluent pool comprised of local and imported natural gas liquids
WTI (US/bbl) $40 $50 $60 $70 $80 $90 $100Diluent (C5+) Differentialto Nymex WTI (US/bbl) +$2.50 +$1.50 +$0.50 -$0.50 -$1.50 -$2.50 -$3.50
*Forecast Assumptions: Fort Hills Startup 2017/2018, using 2015 CAPP Western Canadian oil production forecast, Diluent (C5+) differentials per Lee & Doma Energy Consulting
FORECAST*
Long -term C5+ DiffPlotted to Jan 2016
($10)
($5)
$0
$5
$10
$15
$20
Jan-
10M
ay-1
0S
ep-1
0Ja
n-11
May
-11
Sep
-11
Jan-
12M
ay-1
2S
ep-1
2Ja
n-13
May
-13
Sep
-13
Jan-
14M
ay-1
4S
ep-1
4Ja
n-15
May
-15
Sep
-15
Jan-
16
US
/bbl
WTI/C5+ Diff
88
Diversified Market Access Strategy
Teck Marketing Plan for 50 kbpd Diluted Bitumen Blend
Cushing
Flanagan
Houston
Kitimat
HardistyEdmonton
Saint John
N.E. US
US Gulf Coast
Europe
Asia
TransCanada Energy East (Europe, Asia, US Gulf Coast, N.E. US)
Teck can enter long-term commitments
Enbridge Northern Gateway (Asia)
Keystone, Keystone XL (US Gulf Coast)Enbridge Flanagan South (US Gulf Coast)
Vancouver
TransMountain Pipeline (Asia)
Steele City
Asia
Europe
Asia
Superior
Sufficient Export Capacity In Place• Includes Pipeline And Rail Capability
• No shut in risk, but price risk likely
Targeting Long Term Market Access • US Gulf Coast And Deep Water Ports • Entered into commercial agreements:
• 425 kbbls Hardisty storage capacity• Pipeline capacity opportunities:
• Keystone/Keystone XL/Flanagan South to US Gulf
• TransMountain expansion to Vancouver• Energy East to East Coast
Non-committed barrels sold spot at Hardisty or nominated on common carriage pipeline
89
Sufficient Transportation Capacity In Western Canada
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
kbbl
s/da
y
2015 CAPP Supply Forecast 2014 CAPP Supply Forecast
Total Pipeline & Local Refining Total Pipeline, Local Refin ing & Rail
Con
stra
ined
P
ipe
&
Bal
ance
d R
ail
Constrained Pipe & Excess Rail
Excess Pipe
Balanced Pipe
2 New Pipelines
Enbridge Expansions
Western Canadian Transport Supply & Demand
Assumptions
• Fort Hills first oil late 2017
• Enbridge mainline capacity expansions move forward
• Two of the proposed new export pipelines are put in place between 2019-2022
− Providing incremental capacity of 1.0-1.6 MM bbls/day
− Based on three potential new pipelines:• TransMountain TMX• Keystone XL• Energy East
− Northern Gateway delayed
Source: CAPP (Canadian Association of Petroleum Producers), Lee& Doma, Teck
Sufficient pipeline & rail capacity to accommodate all production
Fort Hills’ First Oil
Con
stra
ined
P
ipe
&
Bal
ance
d R
ail
90
East Tank Farm Blending w/Condensate
Bitumen & Blend Logistics OperatorNominalCapacity(kbpd)
Status
Northern Courier Hot Bitumen TransCanada 202 Construction: ~30% complete
East Tank Farm - Blending Suncor 292 Construction: ~25% complete
Wood Buffalo Blend Pipeline Enbridge 550 Operating
Wood Buffalo Extension Enbridge 550 Construction - field crew mobilized
Hardisty Blend Tankage Gibsons 450 Construction - Tank pad civil work
Wood BuffaloExtension
NorliteDiluent Pipeline
Cheecham Terminal
Hardisty Terminal
Wood Buffalo Pipeline
AthabascaTwin PipelineWaupisoo
Pipeline
Edmonton Terminal
Fort HillsMine Terminal
Northern CourierHot Bitumen Pipeline
TeckOptions
Export Pipeline
Rail
Local Market
Pipeline LegendBitumenBlendDiluentExistingNew
Kirby Terminal
Diluent Logistics Operator Nominal Capacity (k barrels) Status
Norlite Diluent Pipeline Enbridge 130 Construction - first pipe spread complete
Committed Logistics Solutions in Alberta
91