Forward Looking Information

Transcription

1 February 24, 2015

2 Forward Looking Information Both these slides and the accompanying oral presentation contain certain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of the Securities Act (Ontario) and comparable legislation in other provinces. Forward-looking statements can be identified by the use of words such as plans, expects or does not expect, is expected, budget, scheduled, estimates, forecasts, intends, anticipates or does not anticipate, or believes, or variation of such words and phrases or state that certain actions, events or results may, could, should, would, might or will be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Teck to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These forward-looking statements include statements relating to management s expectations with respect to our diversification and the benefits of diversification, our production, costs and sales targets and guidance, mine lives and resource lives for our various commodities, costs for our projects, 2015 projected capital expenditures, timing of production at our Fort Hills project, anticipated economic benefits and contributions of Fort Hills project, including, but not limited to, yield and free cash flow, our dividend policy including our goal of paying a sustainable dividend, our investment rating, sensitivity of our profit, EBITDA and operating expenses to oil prices and currency exchange rates, total liquidity, free cash flow examples, potential fuel cost reduction as a result of converting to LNG for trucks, expected work and expenditures in respect of the Elk Valley Water Quality Plan, expectation that we have access to cash and credit lines sufficient to meet our capital commitments, our expectation that we should complete 2015 with over $1 billion in cash, demand and market outlook for commodities. These forward-looking statements involve numerous assumptions, risks and uncertainties and actual results may vary materially. These statements are based on a number of assumptions, including, but not limited to, assumptions regarding general business and economic conditions, interest rates, the supply and demand for, inventories of, and the level and volatility of prices of coal, zinc, copper and gold and other primary metals and minerals produced by Teck as well as steel, oil, natural gas and petroleum, the outcome of engineering studies currently underway in connection with Teck s development projects, the timing of receipt of regulatory and governmental approvals for Teck s development projects and other operations, receipt of permits to mine, costs of production at our operations and production and productivity levels, as well as those of Teck s competitors, power prices, market competition, the accuracy of Teck s reserve and resource estimates (including with respect to size, grade and recoverability) and the geological, operational and price assumptions on which these are based, the assumption that our board will approve dividends, the resolution of environmental and other proceedings, our ongoing relations with our employees and partners and joint venturers, the availability of financing for development projects and the future operational and financial performance of the company generally. Assumptions regarding the sensitivity of EIBTDA and operating costs to oil prices are based on assumptions regarding the amount of diesel fuel used in operations and transporting our coal products, and is also based on an assumed Canadian/U.S. dollar exchange rate of $1.20. Assumptions regarding the impact of currency exchange are based on current commodity prices. Examples regarding cash flow are based on the commodity and exchange assumptions disclosed therein. Statements regarding our potential cash position at the end of the year are based on assumptions that no unusual transactions occur over the year and on current commodity prices. The foregoing list of assumptions is not exhaustive. 2

3 Forward Looking Information Events or circumstances could cause actual results to differ materially. Factors that may cause actual results to vary include, but are not limited to: unanticipated developments in business and economic conditions in the principal markets for Teck s products or in the supply, demand, and prices for metals and other commodities to be produced, changes in power prices, changes in interest or currency exchange rates, inaccurate geological or metallurgical assumptions (including with respect to the size, grade and recoverability of mineral or oil and gas reserves and resources), changes in taxation laws or tax authority assessing practices, legal disputes or unanticipated outcomes of legal proceedings, unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications or expectations, cost escalation, unavailability of materials and equipment, government action or delays in the receipt of permits or government approvals, industrial disturbances or other job action, and unanticipated events related to health, safety and environmental matters), assumptions used to generate our economic analysis, decisions made by our partners or co-venturers, political events, social unrest, lack of available financing for Teck or its partners or co-venturers, and changes in general economic conditions or conditions in the financial markets. Our Fort Hills project is not controlled by us and construction, sanction and production schedules may be adjusted by our partners. Credit agencies set our credit rating. The effect of the price of oil on operating costs will be influenced 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 on assumptions that demand for products develops as anticipated, that customers and other counterparties perform their contractual obligations, that operating 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 or supplies. Statements regarding anticipated coal sales volumes and average coal prices for the quarter depend on timely arrival of vessels and performance of our coal-loading facilities, as well as the level of spot pricing sales. Certain of these risks are described in more detail in Teck s annual information form available at and in public filings with the SEC at Teck does not assume the obligation to revise or update these forward-looking statements after the date of this document or to revise them to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws. 3

4 Agenda Teck Overview Commodity Market Observations Teck Update 4

5 About Us Canada s Largest Diversified Natural Resources Company # 1 Producer of steelmaking coal in North America # 2 Seaborne exporter of steelmaking coal globally Top ten copper miner in the Americas #3 zinc miner in the world Building an energy business Implementing a comprehensive sustainability strategy Safety is our core value 5

6 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 Zinc Resources Energy Resources >30 years >20 years >50 years Producing through multiple price cycles after capital is recovered, enhancing returns 6

7 The Value of Our Diversified Business Model Cash Operating Profit Leverage to Strong Commodities Production Guidance 1 Unit of Change Estimated Profit 2 Estimated EBITDA 2 Coal ~1/3rd Base Metals ~2/3rds Copper ~60% Zinc ~40% 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 Teck has good leverage to stronger zinc and copper markets, and benefits from the weaker Canadian dollar 7 1. Mid-point of 2015 guidance ranges. Zinc includes 650,000 tonnes of zinc in concentrate and 285,000 tonnes of refined zinc. 2. Based on $1.20 USD/CAD. The effect on our profit attributable to shareholders of commodity price and exchange rate movements will vary from quarter to quarter depending on sales volumes.

8 Agenda Teck Overview Commodity Market Observations Teck Update 8

9 China s Growth: Less is More! In absolute terms, China s GDP growth is approximately double that of 10 years ago RMB (Billions) 3,500 3,000 2,500 2,000 1,500 1, GDP Increment at 2005 Constant Prices in RMB 15% 13% 11% 9% 7% 5% 3% 1% Incremental GDP in 2015 is expected to be similar to last year, in absolute terms 2014: RMB 2.95 trillion (~US$480 billion) 2015*: RMB 3 trillion (~US$493 billion) - -1% f Increment of GDP, Rmb bn (lhs) GDP real growth (rhs) Lower GDP growth rate on a higher base = strong absolute growth 9 Source: NBS & CEIC * Assuming 7.1% real GDP growth and 6.16 RMB/USD exchange rate.

10 Met Coal Market Rebalancing; Higher Prices in C$ Terms ~30 Mt cutbacks announced, slowly being implemented 160 Coal Prices By Currency Argus FOB Australia 150 Require additional cutbacks to achieve market balance US coal production high end of cost curve and no currency benefit $ / tonne AUS$ CDN$ Continued closure announcements promising for last half of Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 US$ Stronger US dollar has increased coal prices in C$ terms 10 Sources: Argus, Bank of Canada

11 Copper Surplus Forecast Declining Wood Mackenzie Forecast Refined Copper Surplus 2014 Wood Mackenzie Forecast Refined Copper Surplus Thousand Tonnes Thousand Tonnes Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Current surplus forecasts for 2014 & 2015 represent <2% of global demand 11 Source: Wood Mackenzie

12 Zinc Inventories Declining US /lb LME Zinc Stocks - 11 Years Stocks Price ,400 1,200 1, plotted to Feb 16, 2015 thousand tonnes US /lb LME Zinc Stocks Since Dec Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Stocks Price 1,200 1,100 1, thousand tonnes plotted to Feb 16, 2015 LME stocks down ~600 kt over 24 months Large inventory position still to work down Large, sudden increases indicate there are also significant off-market inventories Inventories approaching same inflection point level as in Source: LME

13 Declining Drilling Activity Will Impact Oil Production North American Weekly Oil Rig Count 2,000 Down 563 rigs or 35% in twelve weeks Surge in supply last ~5 years primarily due to US shale oil # Oil Rigs 1,500 Shale oil field decline rates ~25% to 50%, compared to global average of 8% 1,000 3-Jan Jan Feb-14 7-Mar Mar Apr-14 9-May May Jun Jul-14 1-Aug Aug Sep-14 3-Oct Oct Nov-14 5-Dec Dec Jan-15 6-Feb-15 Production correction likely to occur relatively rapidly Falling oil rig count will eventually lead to lower oil production 13 Source: Baker Hughes

14 Agenda Teck Overview Commodity Market Observations Teck Update 14

15 Controlling the Controllables Solid performance met or exceeded guidance - Record coal production - Record throughput at Antamina - Record zinc production at Red Dog Significantly reduced controllable operating costs and planned capex Maintained a strong balance sheet 15

16 Delivering Results in Cost Management Copper Cash Costs 1 Steelmaking Coal All-In Site Costs US$/lb Guidance (Mid) ~$1.50 net of byproduct credits C$/t Guidance (Mid) 2 Operating Capitalized Stripping Copper cash costs before by-product credits down ~14% from peak in 2012 By-product credits currently reduce costs by ~US$0.30.lb Coal total site costs including capitalized stripping down ~9% since 2012 Costs are down further on a US dollar basis Sustaining capital expenditures are also lower Achieved significant unit cost reductions, and expect further reductions in Before by-product credits. 2. Including inventory write-downs.

17 Fort Hills Economics Robust 1 Potential Contribution from Fort Hills Teck s share of annual production (36,000 bpd) $70 WTI & $0.80 CAD/USD $90 WTI & $0.90 CAD/USD 13 Mbpa 13 Mbpa Estimated netback 2 ~$54/bbl ~$63/bbl Estimated operating margin 2 ~$29/bbl ~$38/bbl Alberta oil royalty Phase 1 (prior to capital recovery) 2 ~$2/bbl ~$4/bbl Estimated net margin 2 ~$26/bbl ~$34/bbl Annual pre-tax cash flow ~$350 M ~$444 M Free Cash Flow Yield 25% 20% 15% 10% 5% Fort Hills Free Cash Flow Yield 4 Sensitivity to WTI Price $0.80 CAD/USD $0.90 CAD/USD Teck s share of go-forward capex 3 ~$2,940 M ~$2,940 M Free cash flow yield 4 ~12% ~15% 0% WTI $/bbl The Fort Hills project is expected to have significant free cash flow yield across a range of WTI prices 17 Source: Teck Resources Limited 1. Estimates are based on exchange rates as shown, expected bitumen netbacks, and operating costs of C$25 per barrel, including sustaining capital of C$3-5 per barrel. 2. Per barrel of bitumen. 3. Go-forward 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. 4. Pre-tax free cash flow yield during capital recovery period.

18 Strong Balance Sheet & Liquidity Liquidity of >C$5B, including C$2B cash and undrawn US$3B line of credit Investment Grade Rating $3,000 Debt-to-debt-plus-equity of 31% US$300M of notes due to end of 2016 Weighted average maturity ~14 years $2,000 $1,000 $ US$M ~US$1.75 B Weighted average coupon (interest rate) 4.8% Average maturity <US$600M Cash position Debt Maturity Targeting year-end 2015 cash balance of $1B 1 18 As at December 31 st, Assumes current commodity prices and exchange rates, Teck s 2015 guidance for production, costs and capital expenditures and no unusual transactions or events.

19 Fort Hills Capex Well Supported By Free Cash Flow & Liquidity $ Millions Effect of Disclosed Sensitivities On Free Cash Flow 2 (before Fort Hills Capex) 1 $ Free Cash Flow (before Fort Hills Capex) +$780 Weaker Canadian dollar, relative to the US dollar +$201 ($568) Lower oil prices Lower commodity prices (Cu, Zn, Coal) $702 Implied Free Cash Flow (before Fort Hills Capex) Sensitivity 2014A Current A to Spot Estimated EBITDA 1 CAD/USD $1.10 $1.25 $0.15 $52M /$0.01 Oil WTI (US$/bbl) Copper (US$/lb) Zinc (US$/lb) Coal (US$/t realized) $93.00 $52.75 ($40.25) $5M /$1 $3.11 $2.60 ($0.51) $8M /$0.01 $0.98 $0.98 $0.00 $12M /$0.01 $115 $110 $5 $32M /$1 Remaining share of Fort Hills capital expenditure: C$2.3B over 3 years ~$5B liquidity available Expected higher coal/copper production and lower costs may improve cash flow $2.3B capex to fund over 3 years; with $5B liquidity and good free cash flow Implied impact of disclosed EBITDA sensitivities on free cash flow, assuming spot commodity prices and exchange rate as disclosed in the table above, in comparison to 2014 average prices and exchange rate, for illustration purposes only. Other factors will have a material impact on 2015 EBITDA, and actual results will vary materially from those suggested by this simplified model A free cash flow is cash flow from operating activities, minus investing activities (excluding $615M investment in Fort Hills), and debt interest paid, before returns to shareholders. 3. Spot prices at February 13, 2015.

20 Summary Attractive portfolio of long-life assets & resources Good leverage to strong zinc & copper markets Executing well & controlling the controllables Solid financial position Investment grade credit rating 20

21 February 24, 2015

22 Additional Information

23 Diversified Global Customer Base China 26% North America 20% Europe 18% Asia excl. China 33% Latin America 3% Diversified Portfolio of Key Commodities Coking coal Zinc Moly Germanium Copper Lead Silver Indium 23 Source: Teck Resources Limited; 2014 revenue

24 Solid Delivery Against 2014 Guidance Steelmaking Coal Original Guidance Actual Results Coal production Mt 26.7 Mt Record coal production Coal site costs C$55-60 /t C$54 /t 1 Coal transportation costs C$38-42 /t C$38 /t Combined coal costs C$ /t C$92 /t Combined coal costs US$84-92 /t US$84 /t Copper Zinc Copper production kt 333 kt Record thru-put at Antamina Copper cash unit costs 2 US$ /lb US$1.65 /lb Zinc in concentrate production kt 660 kt Record at Red Dog Refined zinc production kt x 277 kt Higher production 2H14 (1H14: 133 kt; 2H kt) Capital Expenditures 4 $1,905M $1,498M Significant capex reduction Including inventory adjustments. 2. Net of by-product credits. 3. Including co-product zinc production from our copper business unit. 4. Excluding capitalized stripping.

25 2015 Production & Site Cost Guidance Steelmaking Coal Actual Guidance Coal production 26.7 Mt Mt Coal site costs C$54 /t 1 C$49-53 /t Coal transportation costs C$38 /t C$37-40 /t Combined coal costs C$92 /t C$86-93 /t Combined coal costs US$84 ~US$69-74 /t 2 Copper Copper production 333 kt kt Copper cash unit costs 3 US$1.65 /lb US$ /lb Zinc Zinc in concentrate production kt kt Refined zinc production 277 kt kt Including inventory adjustments. 2. At $1.25 CAD/USD. 3. Net of by-product credits. 4. Including co-product zinc production from our copper business unit.

26 2015 Capital Expenditures Guidance ($M) Sustaining Major Enhancement New Mine Development Sub-total Capitalized Stripping Coal $100 $45 $ - $145 $490 $635 Copper Zinc Energy Corporate TOTAL $490 $60 $1,015 $1,565 $775 $2,340 Total 2014A $511 $165 $822 $1,498 $715 $2,213 Total capex of ~$1.6B, plus capitalized stripping 26

27 Significant Benefits from Low Oil Prices Low oil price benefits Teck overall in the near-term Reduces operating costs by hundreds of millions of dollars annually 1 Accompanied weaker Canadian dollar improves EBITDA by hundreds of millions of dollars annually 2 Reduces budget and schedule pressure on the Fort Hills project Reduces capex and drilling activity by the sector, which eases pressure on skilled labour and contractors Reduces competition for pipeline capacity Forces cutbacks in oil production and exploration Starts the correction to higher long-term oil prices, due to the sector s decline rates and cuts to capex /drilling activity Provides positive macro-economic stimulus Drives additional metal consumption, benefiting Teck s base metals businesses Each US$1/bbl change in oil price impacts our operating costs by ~$5M on an annual basis, based on $1.20 CAD/USD. 2. Each $0.01 change in the CAD/USD exchange rate impacts our EBITDA by ~$52M on an annual basis.

28 Collective Agreements Operation Expiry Dates Line Creek In Negotiations - May 31, 2014 Coal Mountain In Negotiations - December 31, 2014 Antamina July 23, 2015 Carmen de Andacollo September 30, 2015 December 31, 2015 Elkview October 31, 2015 Quebrada Blanca October 30, 2015 November 30, 2015 January 31, 2016 Fording River April 30, 2016 Highland Valley Copper September 30, 2016 Trail May 31, 2017 Cardinal River June 30, 2017 Quintette April 30,

29 Share Structure & Principal Shareholders Teck Resources Limited March 3, 2014 Shares Held Percent Voting Rights Class A Shareholdings Temagami Mining Company Limited 4,300, % 28.62% SMM Resources Inc (Sumitomo) 1,469, % 9.78% Caisse de depot et placement du Quebec 1,587, % 10.57% Public 1,996, % 13.29% 9,353, % 62.26% Class B Shares Temagami Mining Company Limited 860, % 0.06% SMM Resources Inc (Sumitomo) 295, % 0.02% Caisse de depot et placement du Quebec 7,715, % 0.51% China Investment Corporation 101,304, % 6.74% Public 456,745, % 30.40% 566,921, % 37.74% Total Shares Temagami Mining Company Limited 5,160, % 28.68% SMM Resources Inc (Sumitomo) 1,764, % 9.80% Caisse de depot et placement du Quebec 9,303, % 11.08% China Investment Corporation 101,304, % 6.74% Public 458,741, % 43.70% 576,274, % % 29 Note: Based on public filings

30 Family-Controlled Public Issuers Common corporate structure in Canada May not confirm to typical governance expectations, but can still have strong governance practices Family-controlled issuers can benefit from a longer-term outlook and unique governance structure Cumulative Average Growth Rate Canadian family-controlled issuers outperformed peers over the past 15 years, greatly benefitting minority shareholders 30 Source: The Impact of Family Control on the Share Price Performance of Large Canadian Publicly-Listed Firms ( ) by Clarkson Centre for Board Effectiveness (Rotman School of Management, University of Toronto)

31 Family-Controlled Public Issuers; Teck Share Price Performance Teck has been a strong investment in recent years Long-term investments in Teck have outperformed non-family and materials firms 31 Source: The Impact of Family Control on the Share Price Performance of Large Canadian Publicly-Listed Firms ( ) by Clarkson Centre for Board Effectiveness (Rotman School of Management, University of Toronto)

32 Returned Cash To Shareholders Aim to pay a sustainable dividend that grows commensurate with growth in earnings and cash flow - Since January 2013, semi-annual payment of $0.45; annualized $0.90 Normal Course Issuer Bid in place for up to 20M shares $0.90 $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $- Annualized Dividend Payout 32

33 Economic Outlook

34 Substantial Economic Growth Requires Decades to Achieve Per Capita GDP Relative to the US at PPP % China s GDP is ~20% of the US s on a per capital basis Japan Korea China With the right policies, China still has the potential to boost incomes 34 Source: Dragonomics

35 Substantial Potential For Continuous Robust Growth in China Country 20-Year Period Beginning When Country s Per Capital GDP Was 21% of US s Average Annual GDP Growth Rate Over a 20-Year Period Japan Singapore Taiwan Korea China* Other Asian economies show that China could continue to grow significantly for some time 35

36 Room for Further Development in China Per Capita GDP, Relative to the US China Annual Per Capita GDP by Region RMB 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, China Japan Korea Eastern Central Western 36 Source: Penn World Table, NBS

37 Room for Further Development in China 2 Urbanization Rate Comparison China Annual Urbanization Rate % % % % of Total Population 40% 30% 20% 10% 0% China Japan Europe US With urban Hukou Without urban Hukou 37 Source: United Nations, NBS

38 Room for Further Development in China 3 Capital Stock Per Capita (US$ at constant 2005 prices) Chinese Railways Remain Crowded US$ (Thousands) US$ (Thousands) $140 $120 $100 $80 $60 $40 $20 $0 $70 $60 $50 $40 $30 $20 $10 $ China China at PPP US Capital Stock Per Capita (US$ at constant 1990 prices) 2010 at PPP 1971 at PPP 1990 at PPP Thousand kilometers Increase in track length, thousand kilometers, lhs % China Japan Freight traffic density, rhs 38 Source: GK Dragonomics, NBS

39 Global Urbanization China and India Leading the Way Despite China s rapid urbanization over the past decade (to 54.77% in 2014), it is still lower than the Western world who are all ~80% - China s current urbanization rate is comparable to Japan s in the 1950s - China was previously a drag on Asia s urbanization statistics. Today, it is the driving force, with room for further urbanization India s urbanization was 32% in 2013, up from 26% in It is expected to grow to 33% by 2015, 35% by 2020 and 37% by % 80% 70% 60% 50% 40% 30% 20% 10% 0% Urbanization Rates China India Asia Europe S.America N.America 39 Source: United Nations, World Bank

40 Steelmaking Coal Business Unit & Markets

41 Global Hot Metal Production A Look Back and Forward Hot Metal Production Growth 1,350 China s hot metal production continues to grow : 258 Mt : 712 Mt, representing 2.5x the 2004 level and ~60% of global output E (CRU International) ~840 Mt Excluding China, global hot metal production remains significant at ~40% Mt 1, China Americas CIS JKT India Europe Other 2019f Growth from 2014 to 2019 (CRU Nov 2014) Global ex. China China 41 Source: WSA, based on data reported by countries annually; NBS; CRU International

42 Steel Production Growing Globally Monthly Steel Production Traditional Steel Markets China slower growth Japan stable South Korea good growth Outside of Asia Europe still weak US good growth Mt China EU Japan USA South Korea Update to December Source: WSA, based on data reported by countries monthly; NBS

43 Chinese Steel Industry Moving to the Coast Mt % 65% 60% 55% Xinjiang50% 45% 40% Total Coastal Provinces Coastal % Tibet WISCO Fangchenggang Project Major infrastructure in place. WISCO Fangchenggang Steel Company established in Sep to wholly manage the project. Cold roll line to be commissioned in H 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 Qinghai Qinghai Inner Mongolia Ningxia Gansu Sichuan Sichuan Yunnan Guizhou Shaanxi Guangxi Shanxi Hunan Henan Hubei Guandong Beijing Hebei Shandong Jiangxi Jiangsu Anhui Fujian Heilongjiang Ansteel Baiyunquan Project Phase 1 (~ 5.4 Mt pig iron, 5.2 Mt crude steel and 5 Mt steel products) in Jilin Phase 2 (5.4 Mt BF) planned but no Laioning progress yet. Zhejiang Capital Steel Caofeidian Project Planned 20 Mtpa steel capacity. Phase 1 (10 Mt) completed in Phase 2 (10 Mt) under preparation but no progress yet. Shandong Steel Rizhao Project Planned 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 Ningde Steel Base Proposed but no progress yet. Baosteel Zhanjiang Project The environment evaluation was approved in Dec 2014 (~8.8Mt crude steel, 8.2Mt pig iron and 3.2Mt coke). BF #1 to be commissioned in Relocation to China s coastline facilitates access to seaborne raw materials 43 Sources: NBS, CISA

44 China s Domestic Coking Coal Production China s Domestic Coking Coal Production Mt % 15% 10% 5% Annual production flat at ~530 Mt Shanxi coal production to be limited in future Environment pressures No new projects to be permitted before % Permitted production authorization to be enforced 0 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14-5% Production expected to not exceed 1,000 Mt vs 977 Mt (raw thermal and met) in 2014 Chinese coking coal production Mt, lhs YTD growth %, rhs China s domestic coking coal production is not expected to grow significantly 44 Source: Sxcoal

45 Further Cuts Needed in the Coal Market Seaborne Metallurgical Coal Margin Curve at Spot Price of US$115/t ~30 Mt of production cuts announced - Slightly less than half implemented by year end Teck Margin curve shows around one third of seaborne met coal is operating at negative margin 1 - Implies further cuts are warranted Market balance dependent on additional production cuts Brackets indicate producers closed or still supplying but due to close or deplete inventory 45 Source: Wood Mackenzie, Platts, TEX Report, AME, company & news reports and Teck Resources estimates 1. On an operating basis, excluding sustaining capital costs

46 Growing Steelmaking Coal Imports to China China Rolling 12-Month Coking Coal Imports China's Coking Coal Imports and Stock Change at Ports F 1 : 96 Mt 70 Mt Mt Feb-09 Jul-09 Dec-09 May-10 Oct-10 Mar-11 Aug-11 Jan-12 Jun-12 Nov-12 Apr-13 Sep-13 Feb-14 Jul-14 Dec f 0 Seaborne Landborne Stock change Seaborne Mongolia Imports down by <10% when combined with inventory drawdowns 46 Source: GTIS, Wood Mackenzie, Mysteel 1. Wood Mackenzie forecasts total imports of 96 Mt by 2019

47 We Are a Leading Steelmaking Coal Supplier To Steel Producers Worldwide High quality, consistency, reliability, long-term supply China ~25% Asia excl. China ~50% North America ~5% Europe ~15% Latin America ~5% 47 Source: Teck Resources Limited; 2014

48 Premium Steelmaking Coal Product Hard Coking Coal Benchmark Price Average realized price discount to benchmark is a function of: 1. Product mix: over 90% is hard coking coal 2. Carry over sales volumes 3. Direction of quarterly benchmark prices and spot prices - Q benchmark for premium products is US$117/t US$ / tonne % 88% 93% 94% 92% Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Teck Realized Price (US$) Benchmark Price Average realized price discount of ~8% 48

49 Coking Coal Strength High Quality Hard Coking Coal U.S.A. Canada Other Teck HCC Australia Japan South Africa Australia (hard coking) and Canada Teck HCC Around the world, and especially in China, blast furnaces are getting larger and increasing PCI rates CSR Japan (Sorachl) Japan (Yubarl) Australia (soft coking) U.S.A. 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 10 South Africa Drum Strength Dl 30 (%) Produce some of the highest hot strengths in the world 49

50 Steelmaking Coal Costs Total Cash Cost 2015 vs US$/t E Site Costs Transportation Inventory Write-Down Capitalized Stripping IFRS Costs Sustaining Capital 89 (US$/t) 2014 ($1.10 CAD/USD) 2015E* ($1.25 CAD/USD) Site 1 $49 $41 Transportation 35 $31 IFRS Total $84 $72 Capitalized Stripping $15 $15 Full Cash Cost $99 $86 Sustaining Capex $6 $3 Total Cash Cost $105 $89 Teck costs lower than most major competitors 50 * Based on the mid-point of 2015 guidance. 1. Includes inventory write-down.

51 Capacity Grown to 28 Mt Material Moved Quarterly Coal Production 80 8 Millions of BCM Million Tonnes Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 0 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Capacity grew from 24 Mt to 28 Mt clean production Not currently operating at full capacity due to market conditions Quintette on care and maintenance; available when market conditions improve 51

52 Potential for Further Capacity Growth Given Teck s large resource base, there are a number of options available or under study to allow production growth as the market requires: Quintette restart (up to 4 Mtpa) Coal Mountain Phase 2, with options from 2 to 4 Mt to extend operations Brownfields expansions - Elkview expansion - Fording River expansion - Greenhills expansion Production (Mt) Potential Production Increase Scenarios Capital efficiency and operating cost improvements will be key drivers - Time Conceptual FRO GHO CMO EVO LCO CRO QCO 28 Mt 40 Mt 52

53 >75 Mt of West Coast Port Capacity Planned Teck Portion at 40 Mt Westshore Terminals Teck is largest customer at 19 Mt Large stockpile area Recently expanded to 33 Mt 40 West Coast Port Capacity Planned growth to 36 Mt 35 3 Neptune Coal Terminal Ridley Terminals Exclusive to Teck Recently expanded to 12.5 Mt Planned growth to 18.5 Mt Current capacity: 12 Mt Expandable to 25 Mt Teck contracted at 3 Mt Million Tonnes (Nominal) Neptune Coal Terminal Current Capacity 7 18 Ridley Terminals 33 Westshore Terminals Planned Growth 53 Teck s share of capacity exceeds current production plans, including Quintette

54 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 in 2015 Has the potential to reduce our haul truck fleet fuel bill by $27M annually and lower our CO 2 emissions by 35,000 tonnes per year Comparison of Fuel Cost Comparison of Emissions $ % Price per Liter $1.00 $0.80 $0.60 $0.40 $0.20 % of Diesel Emissions 80% 60% 40% 20% $- LNG / Diesel Liter Diesel / Liter Gas Cost Liquifaction Carbon Tax Delivery Diesel 0% CO2 NOx Particulate SOx Diesel Natural Gas 54

55 Copper Business Unit & Markets

56 Copper Prices & Stocks LME Daily Copper Prices & Stocks US /lb thousand tonnes plotted to LME Stocks Price February 6, Source: LME

57 Copper Concentrate TC/RC Copper Concentrate TC/RC TC/RC Nominal US /lb plotted to Spot Realised TC/RC January Source: CRU

58 Copper Production Disruptions Continue Copper Disruptions F 2015F Thousand tonnes contained copper , Source: ICSG, Wood Mackenzie Teck, company reports

59 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 Consumption to Slow Dramatically But Will Add Significantly in Additional Tonnage Terms 30% 25% 20% 15% 10% Annual Avg. 13% Annual Avg. 5% Thousand tonnes 1,400 1,200 1, Annual Avg. 330mt/yr growth Annual Avg. 505mt/yr growth 5% 200 0% Source: CRU, Wood Mac, Teck

60 China s Copper Imports Remain Strong China Now Accounts for >49% of Global Copper Consumption 1, s tonnes (content) Cathode Concs Scrap Blister/Semis 60 Source: Antaike

61 China Copper Imports Continue to Grow Copper Concentrates Net Imports Refined Copper Net Imports 350 3, , ,000 2,500 2,000 1,500 1, ,000 2,500 2,000 1,500 1, Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0 Copper Anodes Net Imports Scrap Copper Net Imports Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2,000 1,500 1, Total contained copper imports up 5.6% YTD 61

62 Zinc Business Unit & Markets

63 Zinc Prices & Stocks LME Daily Zinc Prices & Stocks 250 1,400 US /lb ,200 1, thousand tonnes plotted to Stocks Price Feb 6, Source: LME

64 Zinc Treatment Charges $600 Zinc Spot TCs vs. Realized Annual TCs $500 $400 US$/dmt $300 $200 $100 $ plotted to Spot Annual Realised January Source: Teck, CRU

65 Significant Zinc Mine Reductions; Large Short-Term Losses, More Long Term Century Rampura Agucha Lisheen Perseverance Red Dog Pomorzany Brunswick Zyryanovsk Mae Sod Paragsha Angas -600 Century Rampura Agucha Lisheen Skorpion Rosebery Red Dog Perseverance Pomorzany-Olkusz Brunswick Cayeli Jaguar Zyryanovsk Akhzal (Aktogask) Kidd Creek Bracemac-McLeod 65 Source: ICSG, Wood Mackenzie Teck, Company Reports

66 Future Potential for Zinc Consumption 20% 18% 16% 14% 12% 10% % Galvanized Steel of Crude Production 19% In 2014 China produced over 822 million tonnes of crude steel and 52 million tonnes of galvanized steel sheet In 2014 the US produced 88 million tonnes of crude steel and over 16 million tonnes of galvanized steel sheet 8% 6% 4% 2% 0% 6% China USA If China were to galvanize crude steel at half the rate of the US and at the same rate of zinc per tonne of galvanized sheet as the US, then Zinc consumption in China could add a further 2.1 million tonnes or 22% of current global consumption 66 Source: World Steel, CRU

67 Energy Business Unit & Markets

68 Diesel & Crude Oil Prices Diesel Prices vs. WTI Prices $160 $140 Average Diesel Premiums: : C$0.22/litre : C$0.27/litre $120 $100 $120 CAD$ cents/l $100 $80 $60 $80 $60 $40 WTI (US$/bbl) $40 $20 $20 $- $- Jan-07 May-08 Sep-09 Feb-11 Jun-12 Nov-13 Mar-15 WTI (US/bbl) (rhs) Alberta ULSD Rack Rate (lhs) Spread has widened; Delay in changes in crude oil prices flowing through to diesel prices 68 Source: Alberta Transportation, OPIS.

69 Declining Drilling Activity Will Impact Production 2,000 North American Weekly Oil Rig Count Surge in supply last ~5 years primarily due to US shale oil # Oil Rigs 1,500 Shale oil field decline rates ~25% to 50%, compared to global average of 8% 1,000 1/3/14 1/17/14 1/31/14 2/14/14 2/28/14 3/14/14 3/28/14 4/11/14 4/25/14 5/9/14 5/23/14 6/6/14 6/20/14 7/3/14 7/18/14 8/1/14 8/15/14 8/29/14 9/12/14 9/26/14 10/10/14 10/24/14 11/7/14 11/21/14 12/5/14 12/19/14 1/2/15 1/16/15 1/30115 Production correction likely to occur relatively rapidly Falling oil rig count will eventually lead to lower oil production 69 Source: Baker Hughes

70 The Real Value of Long-Life Assets 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 Fort Hills Project Indicative Rolling NPV 1 50-year assets provide for superior returns operating through many price cycles 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).

71 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 bitumen is in Teck s sweet spot 71

72 World Class Energy Reserves & Resources Bitumen Reserves Teck s Share World-Class Energy Reserves & Resources (million bbl) Proved Probable Proved Plus Probable Fort Hills Contingent Bitumen Resources 2 Project Teck s Share (million bbl) Low Best High Low Best High Fort Hills Frontier 3 2,360 3,047 3,465 2,360 3,047 3,465 Lease 421 Still to be declared Total 2,360 3,175 4,217 2,360 3,073 3,615 No Exploration Risk No Large Finding Costs GLJ Petroleum Consultants, December There is no certainty that it will be commercially viable to produce any portion of the contingent bitumen resources. For more information about contingent bitumen resources, see Teck s annual information form dated March 3, 2014 available at 3. Sproule, December 2013

73 Fort Hills Is One of the Best Undeveloped Oil Sands Mining Leases 13 Frontier 12 Strip Ratio vs. Ore Grade 11 Fort Hills TV:BIP 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) Ore Grade (wt% bitumen) >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 - Scheduled to produce first oil as early as Q Expect 90% of planned production capacity within 12 months 73 Source: Teck

74 Fort Hills Is Part Of A New Breed Of Mineable Oil Sands Projects Legacy Oil Sands Mining Projects (~30 Years Ago) Naphtha froth treatment process Diluted Bitumen (Doesn t meet commercial pipeline specs) Synthetic Oil Mine & Extraction On-Site Upgrader ($10-15B) Simple Refinery Oil Sands Mining Projects Today Paraffinic froth treatment PFT process PFT Diluted Bitumen (Meets commercial pipeline specs) Mine & Extraction Export Pipeline Heavy Crude Conversion Refinery With Coker New mining projects produce clean, high-quality bitumen and receive a heavy oil price (discounted), but don t have to invest in an upgrader 74

75 Fort Hills Project Operator Has A Proven Track Record Suncor is the largest operator in the oil sands and has been developing projects in close proximity to Fort Hills for 50 years Suncor has demonstrated strong project execution with Firebag 4, Extraction Plant 300, TRO TM, and North Steepbank Extension completed at or below initial projected costs Project Bitumen Capacity 1 Millennium/North Steepbank Mine Firebag In Situ Stages 1-4 MacKay River In Situ Fort Hills kb/d 180 kb/d 30 kb/d 180 kb/d Leveraging Suncor s project execution experience and deep contractor relationships Experience in managing large workforces of comparable size in this region Deploying existing, proven technology 75 Source: Suncor 1. Capacity targets provided above do not necessarily equate to daily production.

76 Minimizing Execution Risk In The Fort Hills Project Suncor has completed 4 projects of ~$20 billion over last 5 years, all at or under budget Cost-driven schedule - Cheaper rather than sooner Disciplined engineering approach Shovel Ready Global sourcing of engineering and module fabrication Balanced manpower profile Benefiting from Suncor s operational and project development experience 76

77 Competitive Costs 1 for Fort Hills Project Capital: ~C$13.5 billion Teck Capital: Fully Escalated Go-Forward Capital 2 Fully-escalated capital investment: ~C$2.94B over four years ( ), including remaining earn-in of C$240M Estimated spending in 2014: C$800M, incurred costs, based on Suncor s planned project spending of C$3.16B Operating & Sustaining Costs: C$25 to $28/bbl total Sustaining C$3-5/bbl (included in above) Excludes diluent purchase Costs in C$ Thousands per Barrel/day $140 $120 $100 $80 $60 $40 $20 $0 Capital Cost Per Flowing Barrel Full project cost including spent to date: C$84 Project 1 Project 2 Fort Hills To be financed by a combination of cash balance, free cash flow and $3B unused line of credit All costs and capital are based on Suncor s estimates. 2. Go-forward 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.

78 Bitumen Netback Calculation Model Typical Diluted Bitumen (Dilbit) Blend Bitumen Netback Calculation Example* Western Canadian Select (WCS) at Hardisty ~25% Diluent ~75% Bitumen $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 US$75.00 C$75.00 C$56.50 WTI US$60 US$75 US$90 Bitumen Netback C$42.75 C$56.50 C$70.25 Teck seeks to secure dedicated transportation capacity for Fort Hills volumes to key markets to minimize WCS discount 78 Source: Alberta Energy bitumen valuation methodology ( * Based on example exchange rate of $1.25 CAD/USD

79 Heavy Oil Price Differential West Texas Intermediate (WTI) & Western Canadian Select (WCS) Prices WTI-WCS Differential $120 $100 $45 $40 $35 US$/barrel $80 $60 $40 $20 $0 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-1 WCS Hardisty WTI Cushing Plotted to 2/12/2014 US$/barrel $30 $25 $20 $15 $10 $5 $0 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Differential WTI-WCS Long-term WTI-WCS differential Plotted to 2/12/2014 Fort Hills project economics benefit from recent narrowing of the WTI-WCS differential 79 Source: Bloomberg, Teck Resources Limited

80 Competitive Bitumen Margins 1 Typical Bitumen Producer Low Quartile Cost Copper Mine Netback 2 $56.50/bbl LME Price US$2.50/lb Cash Margin $ % Margin Cash Margin US$ % Margin Cash Costs $25.00 Cash Costs US$1.25 Fort Hills cash margins are expected to be comparable to the lowest cost mining operations Excludes royalties. 2. Assuming US$75 WTI, $15 differential WTI to WCS and $0.80 USD/CAD

81 Logistics Solutions Planned Between Fort Hills, Edmonton and Hardisty Fort Hills Mine Terminal Pipeline/Terminal Operator Nominal Capacity (kbpd) Teck Capacity (kbpd) Northern Courier Hot Bitumen Pipeline Northern Courier Hot Bitumen East Tank Farm- Blending Wood Buffalo Blend Pipeline TransCanada Suncor Enbridge East Tank Farm Blending w/condensate Wood Buffalo Blend Pipeline Extension Enbridge Norlite Diluent Pipeline Enbridge Wood Buffalo Pipeline Norlite Diluent Pipeline Waupisoo Pipeline Cheecham Terminal Wood Buffalo Pipeline Extension Hardisty Blend Tankage Athabasca Pipeline Teck Hardisty Terminal TBD Options Export Pipe Rail Local Market 81 Edmonton Terminal Existing Pipeline Legend New

82 Multiple Options To Reach International Markets From Western Canada Western Canada Common Carriage Pipeline No take or pay commitments When pipe capacity is constrained, access to capacity may be apportioned and netback prices are discounted Contract Carriage Pipeline Typically requires year take or pay commitments Firm, secure access to capacity, and netbacks are linked to international benchmark related prices Rail More expensive (may require additional capital) Has the flexibility to alter destinations based on market conditions Firm, secure access to capacity, and netbacks are linked to international benchmark related prices Markets US Mid- Continent US Gulf Coast Eastern Canada / US East Coast West Coast Exports East Coast Exports 82 Teck has the capacity to enter into long-term take-or-pay pipeline agreements