China Conference 2012

Transcription

1 China Conference 2012 June 15, 2012

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 our future production, sales, earnings and cash flow, and our statements as to management s expectations with respect to, among other things, business and financial prospects, the size and quality of Teck s copper development projects and the timing of those projects, proposed expansions at existing operations, our production growth profile in copper, coal and oil, mine lives and mineral and oil and gas reserves and resources, progress in development of mineral and oil sands properties, future production, capital and mine production costs, demand and market outlook for commodities, future commodity prices and the financial results, cash flows and operations of Teck. 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 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, Teck s costs of production and production and productivity levels, as well as those of its 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 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. 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), decisions made by our partners or co-venturers, political risk, 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. Certain of these risks are described in more detail in Teck s annual information form available at and in public filings with the SEC. 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 T E C K R E S O U R C E S Agenda Teck overview and Markets Steelmaking Coal Copper Energy 4

5 T E C K R E S O U R C E S D I V E R S I F I E D P O R T F O L I O Building a Leading Diversified Mining Company Ranking Producer of metallurgical coal in N. America #1 Exporter of metallurgical coal in world #2 Zinc miner in world (1) Top 3 Copper growth potential over next 5-7 years 2x Note 1: Brook Hunt,

6 T E C K R E S O U R C E S S T R O N G O R G A N I C G R O W T H Stay the Course Strategy Coal Low-cost Incremental Growth Copper Brownfield Expansion Energy Building Resources Converting Resources to Cash Flow 6

7 Q Highlights Revenues Up 8%, Adjusted Profit up 12% Revenues Gross Profit * (before depreciation & amortization) Profit (attributable to shareholders) Adjusted Profit (attributable to shareholders) EBITDA $ 2,547 million $ 1,131 million $ 218 million $ 504 million $ 781 million 7

8 T E C K R E S O U R C E S Absolute GDP Growth in China Greater than Prior Periods Lower growth does not mean less growth in absolute terms China s targeted growth rate is approximately double absolute growth experienced 5 to 7 years ago GDP growth rate would have to decline to <3.5% for absolute growth to equal levels 5-7 years ago US$, billions China s GDP Growth in Perspective 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Present Day Growth: 7-8% growth = $550 Bn GDP growth GDP would have to slow to <3.5% to mirror historical absolute growth 5 to 7 years ago: 10-13% growth = $250 to $350 billion GDP growth 0 8 China GDP (current prices), IMF

9 T E C K R E S O U R C E S Global Steel Production Remains Healthy Global ex. China Production returning to preglobal financial crisis level Annualized YTD production ~810 million tonnes China Record production March 2012 YTD annualized production ~700 million tonnes April annualized production ~725 million tonnes Monthly Global Steel Production (Mt) China Global ex. China 9

10 T E C K R E S O U R C E S Steady Steel Production in Main Asian Markets Traditional Steel Markets: South Korean production utilization rates remain high Japan rebuild still taking more time than anticipated Outside of Asia Production and utilization rates outside of Europe have stabilized Germany continues to be bright spot in Europe Monthly Global Steel Production (Mt) Japan USA S. Korea Taiwan 10

11 T E C K C O P P E R A C L O S E R L O O K Chinese Copper Imports Remain Strong 000 s tonnes (content) China now accounts for more than 40% of global copper consumption Cathode Concs Scrap Record Imports Source : Antaike 11

12 T E C K R E S O U R C E S Agenda Teck Overview and Markets Steelmaking Coal Copper Energy 12

13 T E C K C O A L A C L O S E R L O O K Increasing Production from Existing Six Operations Targeting 28Mtpa 2013 Mt 26 Annual Coal Production Production 12e vs. 11: +10% 24 Guidance Range Increasing fleet size, Modernizing plant 22 Stabilizing strip ratio Q1 Production 6.3 Mt 25 Mt annualized rate e* Source: Teck Resources, 2012 guidance 24.5 to 25.5mt 13

14 T E C K C O A L A C L O S E R L O O K Quintette Re-start Targeting 3 Mtpa, 2013 start-up Mobile equipment ordered Permitting & stakeholder consultation proceeding Mines Act Permit Amendment (MAPA) application filed Feasibility Study being finalized $340M capex for 2012 Existing plant at Quintette 14

15 T E C K R E S O U R C E S Agenda Teck Overview and Markets Steelmaking Coal Copper Energy 15

16 T E C K C O P P E R A C L O S E R L O O K Growing Copper Production Low cost brownfield projects 400 kt Annual Copper Production Andacollo concentrator 350 Guidance Range Highland Valley Copper Antamina expansion +30% ore first half e* Source: Teck Resources, 2012 Guidance 16

17 T E C K C O P P E R Q U E B R A D A B L A N C A P H A S E I I Large, Low-cost, Expandable Ore-body, in Good Jurisdiction Estimated capital cost of US$5.6 billion Mine and Concentrator Port Facility Teck s share: US$4.75B Tailings Facility Pipelines Development Plan Year 1-5 Year 1-10 Life of Mine Tonnes milled (ktpd) Strip ratio Copper produced (ktpa) Moly produced (ktpa) C1 cash costs 1 ($/lb) $1.07 $1.12 $

18 T E C K C O P P E R Q U E B R A D A B L A N C A P H A S E I I One of the Largest Undeveloped Copper Resources in the World Contained Copper Resources of Developed Copper Mines Contained Copper Resources of Undeveloped Projects Million tonnes Olympic Dam Escondida Andina PT Freeport Oyu Tolgoi El Teniente Norilsk Collahuasi Los Pelambres KGHM Polish Copper Los Bronces Cananea Chuquicamata Morenci Toquepala Quebrada Blanca Cerro Verde Antamina Sierrita Cuajone Las Bambas Project Source: Brook Hunt, 2010 Teckye data, QB Teck April Million tonnes Pebble Reko Dik Resolution Quebrada Blanca Frieda River-Nena La Granja SxEw Tampakan Cerro Colorado El Pachon Quellaveco Radomiro Tomic Ph II Golpu Cobre Panama Namosi Agua Rica Kerr Sulphurets Aktogay Rio Blanco KOV Restart El Arco Source: Brook Hunt 2010 ye data, QB Teck April

19 T E C K C O P P E R Q U E B R A D A B L A N C A P H A S E I I Large, Low-cost, Expandable Ore-body, in Good Jurisdiction Long life asset in stable jurisdiction Large Resource: 17 million tonnes contained copper resources 200 ktpa copper over 39 year design mine life 20 to 25% higher production rates first 10 years Risks well understood Brownfield site, using proven technology Extensive ore characterization work completed Strong existing community relationships Expansion potential considered in current design Near term possibility to increase production by over 50% 19

20 T E C K R E S O U R C E S Agenda Teck Overview and Markets Steelmaking Coal Copper Energy 20

21 T E C K E N E R G Y A C L O S E R L O O K Growing our Resource Base Energy Business Unit Today: Teck s share: ~3.5 billion barrels of contingent bitumen resource 20% interest in Fort Hills 100% interest in Frontier/ Equinox Lease 421 exploration on-going Contingent Bitumen Resource billion bbls 4,000 3,500 3,000 2,500 2,000 1,500 1,

22 T E C K R E S O U R C E S Building a Leading Diversified Mining Company Coking Coal Growing high quality production Crucial raw material for steelmaking Copper Expanding production Strong assets geared toward future growth Zinc World class operations 1 st quartile cash costs Energy Emerging oil producer Creating value in Oil Sands assets 22

23 China Conference 2012 June 15, 2012