Teck Resources Limited Class A · TSX:TECK.A
Teck Resources Limited Class A — Global Metals and Mining Conference 2022
48 slides from Teck Resources Limited Class A's conference presentation, Apr 7, 2022
Slide 1: Steelmaking Coal Resilience
Steelmaking Coal Resilience April 7, 2022 Global Metals and Mining Conference 1
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements Both these slides and the accompanying oral presentation contain certain forward-looking information and forward-looking statements as defined in applicable securities laws (collectively referred to as forward-looking statements). These statements relate
Slide 3: Executive Summary
Executive Summary Steel demand is forecast to Demand for high-quality Global steel industry emits Blast furnace CCUS is the remain strong through to 2050 seaborne hard coking coal 7-10% of total GHG emissions only technology capable of used in blast furnace decarbonizing steelmaking steelmaking is f
Slide 4: Long-Term Steelmaking Coal Demand
Long-Term Steelmaking Coal Demand Global Metals and Mining Conference
Slide 5: Steel is Essential for Economic Growth In a Low-Carbon World
Steel is Essential for Economic Growth In a Low-Carbon World World’s largest metal Enables low-carbon Suited for a circular Essential to lifting market today energy system economy global living standards Steel is widely used and hard Fundamental to renewable Easily recyclable (e.g., without Middle c
Slide 6: Steel Demand Is Robust Through 2050 In all IEA Scenarios
Steel Demand Is Robust Through 2050 In all IEA Scenarios Finished steel demand, billion tonnes Billion tonnes 2.5 2.1 2.1 2.0 Standard Growth scenario – IEA SDS1 2.0 1.8 ▪ Industrialized growth in India and Developing South East Asia 1.5 India ▪ China plateaus until 2030 before converging to Japan/G
Slide 7: High-Quality Steelmaking Coal is Required For the Low-Carbon Transition
High-Quality Steelmaking Coal is Required For the Low-Carbon Transition Seaborne Steelmaking Coal Supply Changes With All Projects Through 20501 (Mt) Long-term demand 235 222 188 for seaborne 216 steelmaking coal will 191 185 remain robust 147 (38) 60 3 (64) 8 25 (53) 15 At the same time, 213 supply
Slide 8: Despite Robust Steel Demand, Long-Term Steelmaking Coal Demand Expected to Decline…
Despite Robust Steel Demand, Long-Term Demand for Steelmaking Coal Is Expected to Decline… Global demand for non-seaborne hard Steelmaking Coal Demand1 (Mtpa) coking coal is expected to decline by 2050 due to 3 factors: 1. Increased steel scrap availability The magnitude and recycling in mature regi
Slide 9: …But Long-Term Demand for Seaborne Hard Coking Coal Will Remain Robust
…But Long-Term Demand for Seaborne Hard Coking Coal Will Remain Robust Seaborne Steelmaking Coal Demand1 (Mtpa) 235 • Seaborne HCC demand is expected to Seaborne hard 191 188 remain resilient due to steel demand growth in coking coal demand regions that rely on lower-cost seaborne hard will benefit
Slide 10: Planned Blast Furnace Capacity Development Is Well Underway in India and South-East Asia
Planned Blast Furnace Capacity Development Is Well Underway in India and South-East Asia • Asia committing to 20+ years of traditional steelmaking Blast Furnace Capacity2 (Mt) • European steel mills seek alternatives to coal feed 180 • Hydrogen pilot plants only, commercial technology still decades
Slide 11: Steel Decarbonization
Steel Decarbonization Global Metals and Mining Conference
Slide 12: The Steel Industry Has a Major Role in Decarbonization
The Steel Industry Has a Major Role in Decarbonization With a 7-9% share of global GHG emissions, the success of the steel industry to decarbonize will play a crucial role in the challenge to stabilize the climate in accordance with the 1.5oC target in the Paris Accord Achieving 1.5oC Will Require R
Slide 13: Steelmaking Decarbonization Technologies Are Driven By Regional Factors…
Steelmaking Decarbonization Technologies Are Driven By Regional Factors… Blast Furnace + CCUS Proven technology with favorable economics, and the best combination of speed and scale for decarbonization Scrap Currently accounts for ~30% of global crude steel production, and while expected to grow, av
Slide 14: …Characterized by Different Levels of Carbon Abatement And Maturity
…Characterized by Different Levels of Carbon Abatement And Maturity Proven Blast Furnace Blast Furnace NG-DRI+EAF NG- H2-DRI+EAF Scrap - EAF Unproven + CCUS DRI+EAF+CCUS Key Coke Coke Natural gas Hydrogen Electricity reductants CO2 1.4-1.71 0.3 0.6 0.1 0.1 0.1-0.5 t CO2/thm Up to 80% reduction Curre
Slide 15: Hard Coking Coal Yields the Highest Decarbonization Efficiency
Hard Coking Coal Yields the Highest Decarbonization Efficiency The higher the percentage of HCC to HCC is expected to become more HCC has higher quality parameters coking coal, the lower the CO2 favorable for steel producers as CO2 that enhance steel production emissions costs rise Steel players are
Slide 16: Teck's Hard Coking Coal Is Optimally Positioned For a Decarbonizing Future
Teck’s Hard Coking Coal Is Optimally Positioned For a Decarbonizing Future Teck’s HCC has amongst lowest Highest quality HCC leading to Teck’s Premium HCC Has Industry Scope 1 and Scope 2 emissions lowest CO2 emissions in Leading Carbon Efficiency relative to peers steelmaking • Teck’s emissions int
Slide 17: Carbon Capture, Utilization, and Storage (CCUS)
Carbon Capture, Utilization, and Global Metals and Mining Conference Storage (CCUS)
Slide 18: The Blast Furnace + CCUS Process
The Blast Furnace + CCUS Process Plant Setup Capture & Transportation Utilization / Storage Compression ▪ Capture of CO2 from ▪ Transportation of the ▪ Utilization options include conventional blast furnace compressed CO2, via enhanced oil recovery, (BF) / basic oxygen pipelines, trucks or ship buil
Slide 19: CCUS Decarbonizes up to 80% of Blast Furnace Steelmaking Emissions
CCUS Decarbonizes up to 80% of Blast Furnace Steelmaking Emissions Typical CO2 Industry wide, BF + CCUS accounts for the majority of the Integrated route CO2 concentration, ~80% of steelmaking CO2 emissions reduction by 20501 point sources Percent Percent of 2019 emissions 2019 to 2030 2019 to 2050
Slide 20: Blast Furnace + CCUS will Lead Large-Scale Decarbonization Adoption
Blast Furnace + CCUS will Lead Large-Scale Decarbonization Adoption Blast Furnace + CCUS is adoption ready Blast Furnace + CCUS adoption will lead through 20502 Proven technology in hard-to-abate industries 100% • CCUS operates in power generation, refining, petrochemicals, agrichemicals, and steel/
Slide 21: Blast Furnace + CCUS is the Only Technology That can be Adopted with Speed and Scale
Blast Furnace + CCUS is the Only Technology That can be Adopted with Speed and Scale Total Cost of Ownership1 (US$/t liquid steel) To make hydrogen steelmaking cost competitive, China (SDS – 1.7o scenario) ample access to low-cost hydrogen (US$1-2/kg) is 800 required. This implies: 750 Stable supply
Slide 22: Slow Transition to Green Hydrogen-Based Steel Given the Enormity of Required Inputs
Slow Transition to Green Hydrogen-Based Steel Given the Enormity of Required Inputs Input needed for one tonne Input needed for all 2030 non-scrap …Exceeds current capacity liquid steel in H2-DRI-EAF based liquid steel (1,800m tonnes)... 50 kg Hydrogen 720 GW Electrolyzer capacity 21 times more than
Slide 23: A Significant Supply Shortage of Hydrogen Steelmaking DR Grade Pellets is Forecast by 2030
A Significant Supply Shortage of Hydrogen Steelmaking DR Grade Pellets is Forecast by 2030 Supply & demand balance of direct reduction grade pellets1 Projected market balance of DR-grade pellets Million tonnes Available capacity Demand forecast (SDS) All 2030 OBM via DRI route 2,250 Based on the cur
Slide 24: Blast Furnace + CCUS is the Most Cost Competitive Decarbonization Technology
Blast Furnace + CCUS is the Most Cost Competitive Decarbonization Technology Net present cost of steelmaking technologies1 China 2030 cost basis, Billion US$ Key economics, 2020 5mtpa Blast Furnace Capex Opex CO2 cost Capex in US$ per annual ton liquid steel 34.4 33.6 Greenfield coke plant, sinter p
Slide 25: Blast Furnace + CCUS – Unit Cost by Process
Blast Furnace + CCUS – Unit Cost by Process 2020, US$/tonne liquid steel1 5mtpa Blast Furnace Facility CCUS Cost Drivers 160 ▪ Carbon capture is typically the highest cost element, varying by CO2 concentration of the source gas Annualized Capex 140 Opex ▪ Transport and storage costs are driven by: 1
Slide 26: Geological Distances to Sequestration Vary
Geological Distances to Sequestration Vary Assumed Distances for Steel Plants to Storage and Fraction of BF Production Assumed Suitable for CCUS 1 Assumed Distance 2019 Pig Iron BF Capacity Suitable Steel to Storage (km) Production (M tonnes) For CCUS (%) China 1000 810 100 NE steel regions close to
Slide 27: Large-Scale Blast Furnace + CCUS Adoption Has Increasing Technical and Economic Tailwinds
Large-Scale Blast Furnace + CCUS Adoption Has Increasing Technical and Economic Tailwinds Requirements for large-scale CCUS adoption Cost of CCUS will decline Cost per tonne Rapid demonstration of BF+CCUS feasibility Continuous CCUS cost reductions Credible and sustained cost of • Standardization CC
Slide 28: China Will Lead Global CCUS Adoption
China Will Lead Global CCUS Adoption Key Factors Driving China’s Leadership in CCUS Adoption China accounts for ~60% of global blast furnace steelmaking 1 and >60% of global steelmaking CO2 emissions2 - ~93% of steelmaking in China to utilize the blast furnace process2 CCUS leverages China’s >US
Slide 29: Chinese Blast Furnace + CCUS Will Be Driven By Infrastructure Development
Chinese Blast Furnace + CCUS Will Be Driven By Infrastructure Development China’s BF capacity by location, 2019, Mt1 Areas with high CO2 storage potential2 Tier 1 scale（>50Mt） Tier 3 scale （10-20Mt） x Capacity per region, Mt Tier 2 scale（20-50Mt） Tier 4 scale （<10Mt） Saline aquifer as main storage s
Slide 30: Canada: Early Adopter of CCUS
Canada: Early Adopter of CCUS The Alberta Canada Trunk Line System Successful and early adoption of CCUS in Canada include: • Boundary Dam CCUS Facility the world’s first commercial scale post- combustion CCS facility • Shell Quest CCS Facility • Whitecap Resource’s Weyburn oil CCS CO2-EOR • CNRL’s
Slide 31: Europe is Focused on Large Scale CCUS Hub And Cluster Infrastructure Development
Europe is Focused on Large Scale CCUS Hub And Cluster Infrastructure Development • Zero Carbon Humber and Net Zero Teesside are two of the UK’s largest industrial CCUS clusters, • The Northern Endurance Partnership will transport and store CO2 from both clusters in the North Sea • The combined proje
Slide 32: CCUS Policy
CCUS Policy Global Metals and Mining Conference
Slide 33: Active Global CCUS Policy Activity Is Underway
Active Global CCUS Policy Activity Is Underway CCUS Activity And Government Support By Region1 CCUS Activity High Low Government N/A or no position Norway Support Significant government support for UK major CCUS project (government Major government support and funding for 2/3 of Northern Lights) fir
Slide 34: Higher Carbon Prices Will Support CCUS Adoption
Higher Carbon Prices Will Support CCUS Adoption Steelmaking CCUS abatement cost / carbon tax economic trade-off matrix China, based on 2030 prices CCUS abatement cost 1 ▪ BF+CCUS becomes economic US$/t CO2 once the CO2 price exceeds the 2050 Today CO2 abatement cost 50 70 90 110 130 150 170 190 210
Slide 35: Global Carbon Abatement Policies Take Different Forms
Global Carbon Abatement Policies Take Different Forms Global carbon emission price applied by country1 Prices in US$/tCO2e *May 2020) :$ Established Emissions Trading scheme Established Carbon tax Proposed legislation Northwest Territories 26 • Globally, 44 countries and 31 British 15 Ontario Quebec
Slide 36: Appendix
Appendix Global Metals and Mining Conference
Slide 37: SDS (+1.7oC) is the Primary Scenario used to Evaluate Steelmaking Technology Economics
SDS (+1.7oC) is the Primary Scenario used to Evaluate Steelmaking Technology Economics +1.5oC scenario1 SDS +1.7oC scenario1 STEPS +2.7oC scenario1 Sustainable Development Scenario Stated Policies Scenario Comparable McKinsey – 1.5oC scenario IEA – SDS IEA – STEPS scenarios CO2 price2 10 104 130 224
Slide 38: HCC Lower Volatile Matter Content Improves Coke Strength and Reduces CO2 Emissions
HCC Lower Volatile Matter Content Improves Coke Strength and Reduces CO2 Emissions Quality benchmark of HCC vs SSCC% Correlation between quality parameters CO2 emissions (Coke Strength (CSR) and volatile matter (kg/ton Coke) Peak Downs HCC (%) CO2 Semi-soft CC China A lower volatile ~50 kg/ton Cokin
Slide 39: There is Adequate Global CO2 Storage Capacity
There is Adequate Global CO2 Storage Capacity ▪ Global CCS Institute estimates global CCS storage capacity3 is ~5 trillion tonnes CO21 N/A ▪ A typical 10 mtpy2 N/A1 integrated steel plant 3,600 200 1 CO 400 produces 20 mtpy 2 25 140 ▪ Historical Oil and0 Gas 2020 25 production expected to 1,400 add
Slide 40: Depleting Oil and Gas Fields Will Add Significant Global CCUS Storage
Depleting Oil and Gas Fields Will Add Significant Global CCUS Storage Million bbl cumulative 1900-2020 for countries >20,000 million bbl1 Norway 48,893 Russia 348,564 Canada 94,496 UK 45,888 Kazakhstan Netherlands 21,036 26,088 United States Iraq 546,367 China 49,489 71,446 Algeria Mexico 44,225 64,
Slide 41: CCUS is a Commercialized Technology in Multiple Hard-to-Abate Sectors
CCUS is a Commercialized Technology in Multiple Hard-to-Abate Sectors Power and industrial applications of commercial large scale CCUS facilities with actual and expected operation dates up to 20241 Waste Incineration Cement Illinois Industrial Chemicals Lake Charles Abu Dhabi Yanchang Iron and Stee
Slide 42: Most Major Steelmaking Regions Are Active in CCUS
Most Major Steelmaking Regions Are Active in CCUS CCUS facilities – commercial or demonstration (includes completed demos or facilities currently shut down) Major steelmaking regions active in CCUS: • Northeast Chinese steelmaking concentration is well suited for current CCUS sites • Many CCUS optio
Slide 43: Carbon Policy and CCUS Infrastructure Funding Underpin Commercial CCUS Adoption
Carbon Policy and CCUS Infrastructure Funding Underpin Commercial CCUS Adoption CCUS Policy, Funding, and Advocacy Leadership1 Successful Government Policy Examples Carbon Policy (carbon pricing and carbon offset Canada: Clean Fuel Standard Act, Greenhouse Gas Pollution Act incentives) Norway: Carbo
Slide 44: Hydrogen Steelmaking will Account for Less than ~2% of Ore Based Metallics by 2030
Hydrogen Steelmaking will Account for Less than ~2% of Ore Based Metallics by 2030 Announced Hydrogen decarbonization steel projects in Europe, supply capacity, till 2030 Mt Announced to-date 5~8 15~23 ~203 ~3.5 ~0.25 1.0~2.0 2.0-2.5 1~1.5 2.5~5.0 Other2 2030-Total 2030-Refresh announced modelled H2
Slide 45: Iron Ore Pellet Quality is a Key Factor Slowing the Advance of Hydrogen DRI
Iron Ore Pellet Quality is a Key Factor Slowing the Advance of Hydrogen DRI Analysis of iron ore product chemistry1 Silica, % Categorization of iron ore products 2020 volume 5.0 Iron ore fines product2 1,702 Mt 4.5 Ideal DR-grade product 14 Mt 4.0 Acceptable DR-grade product 30 Mt 3.5 Potential to u
Slide 46: Teck Trail Smelter CCUS Pilot Plant Concept
Teck Trail Smelter CCUS Pilot Plant Concept • Scoping study underway for Trail CCUS pilot implementation by mid-2023 • A full-scale Trail CCUS facility would contribute to Teck’s Scope 1 2030 and 2050 targets (reduction of up to 150 ktpy CO2) • Contributes to Scope 3 2050 ambition of supporting part
Slide 47: Endnotes
Endnotes Slide 5: Steel is Essential for Economic Growth In a Low-Carbon World Slide 21: Blast Furnace + CCUS is the Only Technology that can be Adopted with Speed and Scale 1. Source: WSA, IEA. 1. Includes operating costs and annualized capital expenditures. 2. India (from ~100 Mt in 2019 to 300 Mt
Slide 48: Endnotes
Endnotes Slide 38: HCC Lower Volatile Matter Content Improves Coke Strength (CSR) and Reduces CO2 Emissions 1. Source: SBB Platts coal specification guide, expert interview, VDEH coke database, internal analysis; Coking by different share mix of HCC vs. SSCC. Slide 39: There is Adequate Global CO2 S
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