Teck Resources Limited Class A · TSX:TECK.A
Teck Resources Limited Class A — Investor Day (September 2021)
170 slides from Teck Resources Limited Class A's investor day presentation, Sep 21, 2021
Slide 1: Investor and Analyst Day
Investor and Analyst Day September 21, 2021
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements Both these slides and the accompanying oral presentations 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 Securit
Slide 3: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements accelerated due to an event of default. Assumptions regarding QB2 include current project assumptions and assumptions regarding the final feasibility study, CLP/USD exchange rate of 775, as well as there being no unexpected material and negative impact to
Slide 4: Welcome Remarks
Welcome Remarks H. Fraser Phillips Senior Vice President Investor Relations and Strategic Analysis
Slide 5: Strategy
Strategy Teck
Slide 6: Overview
Overview Don Lindsay President and Chief Executive Officer
Slide 7: Teck is Poised for Growth
Teck is Poised for Growth Providing essential metals and minerals for a low-carbon world • Right Opportunities ‒ Strong demand for our metals and minerals, led by growth and decarbonization • Right Assets ‒ Industry leading copper growth, strengthening existing high-quality, low carbon assets • Righ
Slide 8: Health & Safety and Sustainability
Health & Safety and Sustainability Health & Safety Inclusion & Climate Communities Water A core value for Teck Diversity Rebalancing to Serving the needs of Protecting water Enhancing low-carbon metals communities and quality and reducing 80% reduction in Indigenous Peoples use representation and HP
Slide 9: Management Update
Management Update Sarah Hughes Brianne Don Sander Nick Uzelac Dr. Joshua Helen Kelly Metzger-Doran Tepper Vice President, Vice President, Vice President, Vice President, Chief Medical Director, Assurance and Health and Planning and Legal Officer Investor Advisory Safety Innovation, Relations Coal 4
Slide 10: Accelerated Need for Essential Metals And Minerals for a Low-Carbon World
Accelerated Need for Essential Metals And Minerals for a Low-Carbon World • Strong demand for Copper Demand1 (kt) metals and minerals driven by decarbonization, population growth and a rising middle class • Unprecedented pandemic monetary and fiscal stimulus Generation and Grid Charging Non-ICE Grid
Slide 11: 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) • The magnitude of 235 222 188 steelmaking coal demand will be 216 ultimately driven by 191 185 147 the pace of decarbonization (38) 60 3 (64) 8 25 (5
Slide 12: Teck and the Low-Carbon Transition
Teck and the Low-Carbon Transition We believe Teck’s strategy will ensure we are well-positioned for changes in demand for mining commodities driven by the transition to a low-carbon world Today 10+ Years 20+ Years 1 Focus on copper growth to 2 Prudently growing our copper 3 Leading copper producer
Slide 13: Prudent Copper Growth Strategy
Prudent Copper Growth Strategy Accelerate capital efficient growth in copper Maximize cash flows from operations Canada to fund copper growth and shareholder returns 156 kt Chile Strengthen Peru 227 kt existing high-quality assets through RACE21TM 86 kt Discipline in capital allocation, maximizing s
Slide 14: Industry Leading Copper Growth
Industry Leading Copper Growth Teck has continued to invest in growth projects; peers have not WoodMac: Consolidated Copper Production Growth1 Teck2 vs. Peers3 2021E-2023E 120% 102% 100% 80% 60% 40% Peru 21% 86 kt 20% 11% 0% Teck Copper Peer Diversified Peer Average Average Teck provides investors e
Slide 15: Portfolio of Copper Growth Options
Portfolio of Copper Growth Options Well understood resource base creates multiple options • High quality resources in very attractive mineral Teck’s Consolidated Copper Asset districts including Canada, the U.S., Mexico, Reserves and Resources (CuEq Mt)2 Chile, and Peru ‒ Including ~22 million ounce
Slide 16: Solid Track Record of Cash Returns to Shareholders
Solid Track Record of Cash Returns to Shareholders >C$3.0 billion of dividends and C$1.7 billion of share buybacks 2011-2020 Teck’s Dividends and Buybacks (C$M) $800 $600 $400 $200 $0 1 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 YTD Total Dividend Paid Share Buybacks >C$4.7 billion of di
Slide 17: Teck is Poised for Growth
Teck is Poised for Growth Right Right Right Right Opportunities Assets Approach Team Strong demand for Industry leading Highest standards Our people deliver our metals and copper growth, of sustainability in the optimal mix of minerals, led by strengthening everything we do, industry leading growth
Slide 18: Appendix
Appendix Teck
Slide 19: Endnotes: Overview
Endnotes: Overview Slide 5: Accelerated Need for Essential Metals and Minerals for a Low-Carbon World 1. Source: CRU Mobility and Energy Futures – Perspectives towards 2035. Approximate figures; total copper demand from CRU’s Copper Market Outlook. 2. Consolidated basis. Slide 6: High-Quality Steelm
Slide 20: Markets
Markets Réal Foley Senior Vice President Marketing and Logistics
Slide 21: Steelmaking Coal Prices Resilient Despite Import Ban
Steelmaking Coal Prices Resilient Despite Import Ban Australian banned exports absorbed by strong steel market Steelmaking coal prices diverge on import ban Steelmaking Coal Prices1 (US$/t) 600 • CFR prices into China hit all time high 500 • Chinese steel production continues to grow at 1.1 Gt 400 a
Slide 22: Australian Coal Ban Absorbed
Australian Coal Ban Absorbed Displaced Australian coal taken up by ex-China market Australian HCC finds new homes; market pivots Australian HCC Exports1 (Mt) • Australian coal banned; ROW to fill the Chinese gap 100 43 • Australian exports to China drop to zero from ~34 Mt 33 33 31 • Increased deman
Slide 23: Long Term Steelmaking Coal Demand Well Supported
Long Term Steelmaking Coal Demand Well Supported Planned blast furnace capacity set to grow Asian blast furnace capacity continues to grow Blast Furnace Capacity2 (Mt) • Asia committing to 20+ years of traditional steel making 180 • European steel mills seek alternatives to coal feed 160 • Hydrogen
Slide 24: Copper Supply Needed for Electrification Targets
Copper Supply Needed for Electrification Targets Supply committed pre-pandemic insufficient to meet growing demand Supply response falling short Copper Mine Growth1 (kt) • >80% of the current committed mine projects were 2019-2021 2021-2023 2023-2026 21,000 890 kt 1,730 kt -170 kt sanctioned prior t
Slide 25: Zinc Outperforms Market Expectations
Zinc Outperforms Market Expectations Chinese mine production continues to underperform expectations Concentrate market remains tight through 2021 China Zinc Concentrate Supply1 (Kmt) • Spot TCs relatively unchanged at historically low levels 8,000 40% • Energy shortages impacting Chinese smelters 6,
Slide 26: Appendix
Appendix Teck
Slide 27: Endnotes: Markets
Endnotes: Markets Slide 2: Steelmaking Coal Prices Resilient Despite Import Ban 1. Ten-year steelmaking coal prices are calculated from January 1, 2011. Inflation-adjusted prices are based on Statistics Canada’s Consumer Price Index. Source: Argus, Teck. As at September 15th , 2021. 2. Eight-year St
Slide 28: Near Term Copper Growth – QB2
Near Term Copper Growth – QB2 Red Conger Executive Vice President and Chief Operating Officer Alex Christopher Senior Vice President, Exploration, Projects & Technical Services
Slide 29: QB2 Update
QB2 Update Successfully delivering on key milestones Reached 60% Completion in Early August Coarse Ore Stockpile Area • Vaccinations, COVID-19 protocols and testing key enablers Dome foundation, stacker structure and reclaim tunnels • First production expected in H2 2022 • Unchanged capital estimate
Slide 30: QB2 Update
QB2 Update Positioning for successful start-up Operational Readiness and Commissioning Remote Integrated Operations Centre • Focus to ensure a seamless transition to operations Located in Santiago and opened in Q1 2020 • Integrated Operations and Business Partner Model • Operations leadership team i
Slide 31: QB2 Port
QB2 Port Aerial View July 2021
Slide 32: QB2 Tailings Management Facility
QB2 Tailings Management Facility Starter Dam July 2021
Slide 33: QB2 Concentrator
QB2 Concentrator Grinding Area Steel Erection September 2021
Slide 34: QB2 Update
QB2 Update Focus on delivering critical systems for first copper Desalinated Water & Pipeline Line 1 Grinding and Flotation Minimum Dam Height & Water Management Three key systems required for first copper 7
Slide 35: QB2 Update
QB2 Update Keys to delivering first copper Alignment with Bechtel and Contractors Commissioning of AHS Fleet CAT 794 on AHS calibration pad Executing on the Critical Path at Concentrator • Line 1 grinding and flotation drive first copper • Followed by Line 2 and subsystems (i.e. moly plant, pebble c
Slide 36: Appendix
Appendix Teck
Slide 37: Endnotes: Near Term Copper Growth – QB2
Endnotes: Near Term Copper Growth – QB2 Slide 2: QB2 Update - Successfully delivering on key milestones 1. On a 100% go forward basis from January 1, 2019 including escalation and excluding working capital or interest during construction using actual realized exchange rates until March 30, 2020 and
Slide 38: Copper Growth Strategy
Copper Growth Strategy Nic Hooper Senior Vice President Corporate Development
Slide 39: Right Approach: Portfolio of Copper Growth Options
Right Approach: Portfolio of Copper Growth Options Value realization through production or M&A Teck is positioned to realize value from a robust pipeline of copper projects QB2 Case Study • Investment in exploration and strategic M&A over the last De-risked at project sanction: 20 years has secured
Slide 40: Right Approach: Actively Strengthening our Portfolio
Right Approach: Actively Strengthening our Portfolio Prudent investments in near-term, medium-term, and future growth options 2017 2021 Zafranal Feasibility (Q2 2019) Prefeasibility Near Term Teck’s copper growth portfolio is Cu-Au SEIA submission in H2 2021 supported by recent and extensive studies
Slide 41: Right Assets: Portfolio of Copper Growth Options
Right Assets: Portfolio of Copper Growth Options Value optionality guided by commercial discipline Framing Options Medium-term Options Near-term Options Delivering Value CuEq Production Legend 105.0% San 150 300 Nicolás ktpa ktpa Value Creation Potential QB3 Galore Creek Zafranal QB2 50.0% Mesaba Sc
Slide 42: Zafranal Cu-Au Porphyry (80%)
Zafranal Cu-Au Porphyry (80%) Peru Feasibility complete, SEIA submission in H2 20211 Long Life Asset Feasibility Study Production Profile • 19 year mine life with mine life extension 225 100% 200 opportunities though pit expansion and district 175 75% resource development 150 125 50% 100 Quality Inv
Slide 43: San Nicolás Cu-Zn (Ag-Au) VHMS (100%)
San Nicolás Cu-Zn (Ag-Au) VHMS (100%) Mexico Prefeasibility and Environmental Impact Assessment completed1 Long Life Asset Prefeasibility Study Production Profile • One of the world’s most significant 150 100% undeveloped VHMS deposits 125 75% • Updated Resources Statement 100 75 50% Quality Investm
Slide 44: Medium-Term Development Options
Medium-Term Development Options Chile and Canada Partnerships reduce capital needs | Options allow more flexible capital allocation QB3 Cu-Mo-Ag (60% Interest) Galore Creek Cu-Au-Ag (50% Interest) Long section looking north Long section looking west Surface Cu% 0.8 Surface QB2 Sanction Case Pit 0.5
Slide 45: Appendix
Appendix Teck
Slide 46: Right Assets: Portfolio of Copper Growth Options
Right Assets: Portfolio of Copper Growth Options Multiple high quality copper options Near Term Options 1 Zafranal (Cu-Au), Peru1,2 Teck 80% | MMC 20% Feasibility Study complete; SEIA submission in H2 2021 First five years: 133 ktpa CuEq; C1 Costs US$1.18/lb Cu. US$1.2B capex; NPV8 US$1,026M; IRR 23
Slide 47: Endnotes: Copper Growth Strategy
Endnotes: Copper Growth Strategy Slide 2: Right Approach: Portfolio of Copper Growth Options - Value realization through production or M&A 1. Total debt repayment between Q4 2015 and Q3 2019. 2. Share buybacks and dividends since Q4 2017 (one year prior to project sanction). Slide 4: Right Assets: P
Slide 48: Non-GAAP Financial Measures
Non-GAAP Financial Measures Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. This document refers to a number of Non-GAAP Financial Measures which are not measures recognized under IFRS
Slide 49: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted cash cost of sales – Adjusted cash cost of sales for our copper and zinc operations is defined as the cost of the product delivered to the port of shipment, excluding depreciation and amortization charges, any one-time collective agreement charges or inventory wr
Slide 50: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of EBITDA and Adjusted EBITDA Three months Six months ended June 30, ended June 30, (CAD$ in millions) 2021 2020 2021 2020 Profit (loss) $ 260 $ (185) $ 552 $ (496) Finance expense net of finance income 51 114 102 161 Provision for (recovery of) income taxe
Slide 51: Non-GAAP Financial Measures
Non-GAAP Financial Measures Copper Unit Cost Reconciliation Three months Six months Three months Six months ended June 30, ended June 30, ended June 30, ended June 30, (CAD$ in millions, except where noted) 2021 2020 2021 2020 (CAD$ in millions, except where noted) 2021 2020 2021 2020 Revenue as rep
Slide 52: Financial Strategy
Financial Strategy Jonathan Price Senior Vice President and Chief Financial Officer
Slide 53: Teck's Capital Allocation Framework
Teck’s Capital Allocation Framework Shareholder distributions of 30-100% of Available Cash Flow1 SUSTAINING SUPPLEMENTAL BASE CAPITAL SHAREHOLDER DIVIDEND (including stripping) DISTRIBUTIONS CASH FLOW FROM OPERATIONS after interest and finance Plus at Least 30% charges, lease payments Available Cash
Slide 54: Strong Financial Position
Strong Financial Position Investment grade credit rating, with substantial liquidity Balance Sheet Significant leverage to rising commodity prices • Rated investment grade by all four agencies Production4 Change Estimated Effect on Estimated Effect on Annualized Profit5 Annualized Liquidity EBITDA5
Slide 55: QB2 Funding Model
QB2 Funding Model Minimized Teck execution funding through partnership and project finance QB2 Funding Model - Post January 2019 (US$B) 6.0 Ownership – 0% US$5.2 billion Funding – 48% 5.0 0.3 1.3 1.1 4.0 Ownership – 30% 1.1 Funding – 37% 3.0 1.8 0.3 0.3 2.0 Ownership – 60% 1.3 Funding – 15% 1.0 2.1
Slide 56: QB2 Project Finance Facility
QB2 Project Finance Facility • Senior debt will continue to be drawn pro-rata under a pre-determined Senior Debt-to-Shareholder funding ratio until US$2.5 billion is drawn • Pre-completion, senior debt is guaranteed on a pro-rata basis (after consideration of ENAMI’s 10% carried interest) ‒ Teck 66.
Slide 57: Teck Illustrative Cash Flows - QB2 Full Production
Teck Illustrative Cash Flows - QB2 Full Production Scenarios indicate potential Available Cash Flow of C$4–6/share Illustrative Available Cash Flow (C$B) US$4.50/lb US$4.00/lb US$3.50/lb Copper C$/share9 Copper C$/share9 Copper C$/share9 Adjusted EBITDA1 $6.0 $5.6 $5.3 QB2 EBITDA (100%)2 2.6 2.2 1.8
Slide 58: Teck Illustrative Cash Flows - QB2 Full Production
Teck Illustrative Cash Flows - QB2 Full Production Scenarios indicate potential Available Cash Flow of C$4–6/share US$4.50/lb Copper Scenario US$4.00/lb Copper Scenario US$3.50/lb Copper Scenario $5.73/share $4.93/share $4.13/share 7
Slide 59: Appendix
Appendix Teck
Slide 60: ENAMI Interest in Quebrada Blanca
ENAMI Interest in Quebrada Blanca Organizational Chart • The government of Chile owns a 10% non-funding interest in Compañía Minera Teck Quebrada Blanca Teck SMM SC S.A. (CMTQB) through its state-run minerals company, Empresa Nacional de Minería (ENAMI) 100% 83.33% 16.67% • ENAMI has been a partner
Slide 61: Quebrada Blanca Accounting Treatment
Quebrada Blanca Accounting Treatment Balance Sheet Cash Flow • 100% of project spending included in property, plant and • 100% of project spending included in capital equipment expenditures • Debt includes 100% of project financing • Sumitomo1 contribution recorded within financing • Total sharehold
Slide 62: Capital Expenditures Guidance
Capital Expenditures Guidance Sustaining and Growth Capital QB2 2020 2021 2020 2021 (Teck’s share in CAD$ millions) Guidance1 (Teck’s share in CAD$ millions) Guidance1 Sustaining QB2 capital expenditures $ 1,643 $ 2,500 Copper $ 161 $ 160 Total before SMM/SC contributions 3,129 3,945 Zinc 188 155 Es
Slide 63: Endnotes: Financial Strategy
Endnotes: Financial Strategy Slide 3: Strong Financial Position 1. As at July 26, 2021. 2. Based on Teck’s US$3.5 billion of public notes outstanding as at June 30, 2021, excluding project finance debt, draws on the revolving credit facility, leases and debt at Antamina and Neptune Terminals. 3. As
Slide 64: Non-GAAP Financial Measures
Non-GAAP Financial Measures Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. This document refers to a number of Non-GAAP Financial Measures which are not measures recognized under IFRS
Slide 65: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted cash cost of sales – Adjusted cash cost of sales for our copper and zinc operations is defined as the cost of the product delivered to the port of shipment, excluding depreciation and amortization charges, any one-time collective agreement charges or inventory wr
Slide 66: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Net Debt to Adjusted EBITDA Ratio (A) (B) (C) (A-B+C) Twelve months ended Three months ended Three months ended Twelve months ended (C$ in millions) December 31, 2020 March 31, 2020 March 31, 2021 March 31, 2021 Profit (loss) $ (944) $ (311) $ 292 $ (341
Slide 67: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Net Debt to Adjusted EBITDA Ratio - Continued (A) (B) (C) (A-B+C) Twelve months ended Three months ended Three months ended Twelve months ended (C$ in millions) December 31, 2020 March 31, 2020 March 31, 2021 March 31, 2021 Total debt at period end (F) $
Slide 68: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of EBITDA and Adjusted EBITDA Three months ended Three months ended (C$ in millions) March 31, 2021 March 31, 2020 Profit (loss) $ 292 $ (311) Finance expense net of finance income 51 47 Provision for (recovery of) income taxes 209 (69) Depreciation and amo
Slide 69: Operations
Operations Teck
Slide 70: Introduction
Introduction Red Conger Executive Vice President and Chief Operating Officer
Slide 71: Andrew Milner, Greg Brouwer, Andrea Leroux
Andrew Milner Senior Vice President and Chief Transformation Officer Greg Brouwer Vice President, Transformation Andrea Leroux Director, Value Delivery
Slide 72: RACE - Teck's Path to Transformation
RACE - Teck’s Path to Transformation A journey kickstarted in 2019 to unlock the potential of technology and our people Renew the technology and data infrastructure Automate operations Connect systems across the value chain Empower Teck’s workforce through digital … to reduce operating cost and sign
Slide 73: 2019 Demonstrate the opportunity
2019 Demonstrate the opportunity
Slide 74: 2019 PTV target $150M
2019 PTV target $150M
Slide 75: We Stood up Domains Across our operations
We Stood up Domains Across our operations to achieve this target Mining Analytics Automation Processing Analytics Ore Body Knowledge Maintenance Analytics Integrated Operations
Slide 76: Advanced Analytics
Advanced Analytics • Data in the cloud • Computing power analyzes data • Patterns and insights identified
Slide 77: 2019 Demonstrate the opportunity
2019 Demonstrate the opportunity
Slide 78: Haul Cycle Analytics
Haul Cycle Analytics Data rich enabling rapid application of advanced analytics Established first in-house digital and implementation team Partnered with Fording River Operations team Efforts initiated in 2019 targeting critical area of business Empowered our people to make better and faster
Slide 79: Haul Cycle Analytics
Haul Cycle Analytics “These new insights have allowed our frontline leaders to make better and faster decisions to improve operational results.” - Richard Whittington, GM, Fording River
Slide 80: 2019 Demonstrate the opportunity
2019 Demonstrate the opportunity
Slide 81: Processing Analytics
Processing Analytics First solution deployed at Highland Valley Copper • Significant flotation recovery improvement • Early engagement generated excitement
Slide 82: Demonstrate the opportunity PTV $150M Value Realized
2019 Demonstrate the opportunity PTV $150M Value Realized
Slide 83: 2020 Driving impact
2020 Driving impact —— Infrastructure to support mining and processing analytics Our data and systems through the creation of new data pipelines
Slide 84: Renewing / Connecting
Renewing Infrastructure to support mining and processing analytics Connecting Our data and systems through the creation of new data pipelines
Slide 85: 2020 Driving impact
2020 Driving impact I Fe expat mhing ad processing analytics -_--— 1 I creation of new data pipelines Our culture is changing
Slide 86: How can we use data from haul trucks to address vehicle interactions?
“How can we use data from haul trucks and leverage haul cycle analytics to address our #1 safety risk: vehicle interactions?” - Robin Sheremeta, Senior Vice President, Coal
Slide 87: Reducing Risk of Vehicle Interactions
Reducing Risk of Vehicle Interactions • Partnered with safety teams across Teck • Reduced the risk associated with roads and people behaviour Light Vehicle Supervisor App Operator Safety Safety Notification Scoreboard • Optimizing Safe Production • On-going development and implementation in Steelmak
Slide 88: 2020 Driving impact
2020 Driving impact I tate eereee meter = = processing analytics Our data and systems through the creation of new data pipelines, Infrastructure to support mining and Processing analytics Our data and systems trough te creaton of new deta ppetines I Haul Cycle Analytics contributing to record truck
Slide 89: Haul Cycle Analytics
Haul Cycle Analytics Access to insights that empower our frontline people to make better and RACE21TM Period faster decisions Standard Haulage Model (SHM) 105 Advanced analytics tools Percentage of Target (%) 102 combined with performance 101 management enabling new 102 ways of working in our 100 op
Slide 90: 2020 Driving impact
2020 Driving impact I tate eereee meter = = processing analytics Our data and systems through the creation of new data pipelines, Infrastructure to support mining and processing analytics Our data and systems through the creation of new data pipelines Haul Cycle Analytics contributing to record truc
Slide 91: Processing Analytics
Processing Analytics Processing Analytics scaled to deliver significant impact CDA • Optimizing plant performance • Six operations RDO • Critical tool for operators Coal (GHO)
Slide 92: Processing Analytics
Processing Analytics “Analytics has helped us become more consistent operators” - John Morrison, Operator "It is really as simple as that" - Kim Heyland, Operator
Slide 93: Processing Analytics
Processing Analytics “RACE culture has empowered site teams to challenge the status quo - driving mill performance and throughput beyond what has historically been achievable.” - Shehzad Bharmal, Senior Vice President, Base Metals, North America & Peru
Slide 94: 2020 Driving impact
2020 Driving impact l este eee nnerees —— = processing analytics I creer eet cS) creation of new data pipelines, Infrastructure to support mining and processing analytics A Srsston of ne Sas pk sans I ' Haul Cycle Analytics _—_—— contributing to record I truck productivity Processing I Analytics sca
Slide 95: Water
Water Areas we’re exploring Enable identification and mitigation of 1 water issues in near-real-time Significantly accelerate speed of 2 drawing insight from data Improve water quality performance 3 and reduces/eliminates permit non-compliance Improve compliance and increase 4 water usage efficiency
Slide 96: Building Digital Capability & Capacity
Building Digital Capability & Capacity • Digital product development squads • New product framework (Agile) • New capacity and skills Organizational digital literacy
Slide 97: 2021 Integration
2021 Integration Optimizing the full value chain
Slide 98: Integrated Operations
Integrated Operations Supporting the Steelmaking Coal supply chain transformation with a new pit-to-port tool • Historical state is data rich • Complex and frequently changing input parameters • Mine release • Clean coal and inventory on rail • Vessel arrivals and order • Specific vessel blends • Ma
Slide 99: 2021 Integration
2021 Integration Optimizing the full value chain
Slide 100: Our transformation journey
Our transformation journey 450 + 100+ Initiatives Products 6 40 Digital Domains Squads
Slide 101: Copper and Zinc
Copper and Zinc Shehzad Bharmal Senior Vice President Base Metals, North America & Peru
Slide 102: Significant Base Metals Growth
Significant Base Metals Growth Expanding our high-quality Base Metals business • High-quality operating assets with strong ~100% >850kt margins Near-term copper Per year copper • Substantial near-term growth from QB2 production growth1 equivalent production by 20232 • Operational excellence underpin
Slide 103: Significant Base Metals Growth
Significant Base Metals Growth Teck’s Base Metals business rivals leading copper peers Consolidated Copper Equivalent Production 1 (kt CuEq) Copper Zinc (CuEq) Other (CuEq) Teck First Quantum Antofagasta 11% 988 855 887 0% 832 828 62% 528 Teck Teck First Quantum First Quantum Antofagasta Antofagasta
Slide 104: Significant Base Metals Growth
Significant Base Metals Growth Teck’s Base Metals business rivals leading copper peers Consolidated Copper Equivalent Production 1 (kt CuEq) Copper Zinc (CuEq) Other (CuEq) Attributable (CuEq) Teck First Quantum Antofagasta 11% 988 855 887 0% 832 828 62% 528 Teck Teck First Quantum First Quantum Ant
Slide 105: Industry Leading Copper Growth
Industry Leading Copper Growth Building on our foundation of quality assets and operating discipline Gross Profit Margin Before Depreciation & Amortization Quality assets with strong margins from Operations Consistently ~45-55%1 • Antamina, Highland Valley and Carmen de Andacollo 70% provide a stabl
Slide 106: World Class Zinc Business
World Class Zinc Business Large scale, low-cost integrated business Gross Profit Margin before Depreciation & Amortization Quality assets with strong margins from Mining Operations Consistently >50%1 70% • Red Dog is a first quartile cash cost operation • Trail produces refined zinc, lead, and other
Slide 107: RACE21 – Processing Analytics Journey
RACE21TM – Processing Analytics Journey Significant improvements realized within our processing plants Highland Valley Copper IPM Flotation Recommendations Red Dog Operations • Advanced grinding control has realized a ~9% increase in production rates1 Highland Valley Copper • Deployed real-time opti
Slide 108: Significant Base Metals Cash Flow
Significant Base Metals Cash Flow Expanding our high-quality Base Metals business • High quality, growing copper business • World class zinc business • Focus on operating discipline • Significant improvements driven by RACE21TM Building on our foundation of quality assets and operating discipline Ph
Slide 109: Steelmaking Coal
Steelmaking Coal Robin Sheremeta Senior Vice President, Coal
Slide 110: Tier-One Steelmaking Coal Portfolio
Tier-One Steelmaking Coal Portfolio • Diversified, long term customer base 49% $2.2B • Stable long term strip ratio Steelmaking Coal Steelmaking Coal 12-year Historical Average 12-year Historical Average • Long term production run rate of Annual Impairment Annual Impairment 26-27 million tonnes per
Slide 111: Steelmaking Coal Operating Strategy
Steelmaking Coal Operating Strategy Optimized Supply Chain Map and Production Capacity1 • Improved market access and reliability for customers 20km • Pit to port integration maximizes short and long term Elk Valley synergies Fording River Increase Margins Not Volumes ~9.0 Mtpa • Strategically replac
Slide 112: Executing on the Elk Valley Water Quality Plan
Executing on the Elk Valley Water Quality Plan Saturated Rock Fill (SRF) Active Water Treatment Facilities (AWTF) • Tank based biological treatment process removes nitrate and transforms selenium into a solid form Saturated Rock Fill (SRF) • Uses naturally-occurring biological process in old mining
Slide 113: Optimally Positioned For a Decarbonizing Future
Optimally Positioned For a Decarbonizing Future • Teck’s premium hard coking coal improves blast Steelmaking Coal CO2 Intensity Curve1 furnace efficiency and decreases CO2 emissions (t CO2e/t saleable coal) per tonne of steel Will be even more cost competitive with rising CO2 prices globally • Withi
Slide 114: Proven Operator, Managing for Margin And Costs Through Cycles
Proven Operator, Managing for Margin And Costs Through Cycles Low Price Environment Steelmaking Coal Impairment Adjusted EBITDA1 Cost focus to protect margins and maximize Free Cash Flow1 & Impairment Adjusted EBITDA Margin1 (%) Annual Impairment Annual Impairment Annual ★ 2013: Cost Reduction Progr
Slide 115: Top Quartile Margins in Steelmaking Coal
Top Quartile Margins in Steelmaking Coal Managing our Core Business Drivers to Strong Cash Flow Generation Potential2 Optimize Margins Clean Coal Production per Estimated Effect on Estimated Effect on Annum Change Annualized Profit3 Annualized EBITDA3 • Neptune capacity increase and third-party logi
Slide 116: Logistics
Logistics Réal Foley Senior Vice President Marketing and Logistics
Slide 117: Steelmaking Coal Supply Chain
Steelmaking Coal Supply Chain Logistics – Improved Reliability • Port and rail optionality - leveraged capacity at Ridley Terminal to mitigate interruptions due to BC wildfires • Mine inventory at healthy levels • RACE21TM technology and tools being utilized to optimize coal supply chain performance
Slide 118: Neptune Terminal Upgrade
Neptune Terminal Upgrade Control Room September 2021
Slide 119: Neptune Terminal Upgrade
Neptune Terminal Upgrade Tandem Dumper August 2021
Slide 120: Neptune Terminal Upgrade
Neptune Terminal Upgrade Shiploader Conveyor August 2021
Slide 121: Neptune Terminal Upgrade
Neptune Terminal Upgrade West Shiploader September 2021
Slide 122: Neptune Terminal Upgrade
Neptune Terminal Upgrade East & West Shiploaders May 2021
Slide 123: Energy
Energy Kieron McFadyen Senior Vice President, Energy
Slide 124: Fort Hills Oil Sands Mine
Fort Hills Oil Sands Mine State of the art oil sands mining facility Capacity High Ore Quality1 200+kbpd (11.4% bitumen grade) (Dec 2018) Low GHG Long Life Intensity2 Resource1 (550Mbbls Teck share) 2
Slide 125: Fort Hills Operations Update
Fort Hills Operations Update Operational problems being addressed, with continued focus on production ramp-up • Mining contractors now on site to support ramp-up • Major water inflows are capped • Process underway to stabilize and maintain pit wall slope • Recent operational performance show clear s
Slide 126: Fort Hills Financial Outlook
Fort Hills Financial Outlook Financial performance improves once production is stabilized Assumptions EBITDA3 – Teck’s Share (C$ million) Fort Hills $600 2021 Potential $500 NYMEX WTI US$67.93 US$75.00 Nameplate Nameplate $400 Capacity Capacity 194,000 bpd1 WTI-WCS differential US$13.01 US$12.00 194
Slide 127: Significant EBITDA Upside Potential
Significant EBITDA Upside Potential Providing the basis for strong and steady cash flow for decades Assumptions EBITDA1 Potential – Teck’s Share (C$ million) WTI @ WTI @ $900 US$75/BBL US$60/BBL $800 WTI-WCS differential US$10.75 US$10.75 $700 +$150M $600 C$/US$ exchange rate 1.25 1.25 $500 Adjusted
Slide 128: Appendix - Energy
Appendix - Energy Teck
Slide 129: Crude Oil Prices Supported by Supply Restraints
Crude Oil Prices Supported by Supply Restraints Demand-supply imbalance leading to price recovery Demand returning to pre-COVID-19 levels Global Crude/Liquids Demand/Supply (Mbpd) • Q4 2021 and 2022 annual forecast >100 Mbpd 110 • Prior to Hurricane Ida, US refinery capacity at 92% 100 Supply restra
Slide 130: Appendix – Guidance
Appendix — Guidance Teck
Slide 131: Guidance - Production
Guidance - Production 2020 2021 Guidance1 3-Year Guidance1 Units in 000’s tonnes (excluding steelmaking coal, molybdenum, and bitumen) (2022-2024) Copper2,3,4 Highland Valley 119.3 128-133 135-165 Antamina 85.6 91-95 90 Carmen de Andecollo 57.4 46-51 50-60 Quebrada Blanca6 13.4 10-11 - Total copper
Slide 132: Guidance - Sales and Unit Costs
Guidance - Sales and Unit Costs Sales Q2 2021 Q3 2021 Guidance1 Zinc2 Red Dog (kt) 39 180-200 Steelmaking coal (Mt) 6.2 6.0-6.4 Unit Costs 2020 2021 Guidance1 Copper3 Total cash unit costs7 (US$/lb) $1.57 $1.65-1.75 Net cash unit costs4,7 (US$/lb) 1.28 1.30-1.40 Zinc5 Total cash unit costs7 (US$/lb)
Slide 133: Guidance - Water Treatment
Guidance - Water Treatment Excerpt from Teck’s Q2 2021 Press Release There is no change to our 2021 guidance on water-related spending. We expect capital spending of approximately $255 million in 2021 on water treatment (AWTFs and SRFs) and water management (source control, calcite management and tr
Slide 134: Appendix – Endnotes
Appendix — Endnotes Teck
Slide 135: Endnotes: Copper and Zinc
Endnotes: Copper and Zinc Slide 2: Significant Base Metals Growth - Expanding our high-quality Base Metals business 1. Source: Wood Mackenzie base case copper production dataset. Consolidated production estimate was derived based on accounting standards for consolidation. Copper production growth es
Slide 136: Endnotes: Copper and Zinc
Endnotes: Copper and Zinc Slide 6: World Class Zinc Business 1. Mining operations only, and therefore excludes Trail. Calculated as Gross Profit before D&A divided by reported Revenue, sourced from Teck’s public disclosures. Margin data from 2017-2020 are for the full year, while margin data for 202
Slide 137: Endnotes: Steelmaking Coal
Endnotes: Steelmaking Coal Slide 2: Tier-One Steelmaking Coal Portfolio 1. The 12-year historical average annual Impairment Adjusted EBITDA and Impairment Adjusted EBITDA Margin are for the 2009 to 2020 period, inclusive. Impairment Adjusted EBITDA and Impairment Adjusted EBITDA Margin are non-GAAP
Slide 138: Endnotes: Energy
Endnotes: Energy Slide 2: Fort Hills Oil Sands Mine 1. Source: Oil Sands Magazine. https://www.oilsandsmagazine.com/projects/suncor-fort-hills-mine 2. Source: Oil Sands Magazine. https://www.canadianenergycentre.ca/this-oil-sands-crude-has-lower-ghg-emissions-than-the-u-s-average/ Slide 3: Fort Hill
Slide 139: Endnotes: Guidance
Endnotes: Guidance Slide 63: Production Guidance 1. As at July 26, 2021. See Teck’s Q2 2021 press release for further details. 2. Metal contained in concentrate. 3. We include 100% of production and sales from our Quebrada Blanca and Carmen de Andacollo mines in our production and sales volumes, eve
Slide 140: Appendix – Non-GAAP Financial Measures
Appendix – Non-GAAP Financial Measures
Slide 141: Non-GAAP Financial Measures
Non-GAAP Financial Measures Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. This document refers to a number of Non-GAAP Financial Measures which are not measures recognized under IFRS
Slide 142: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted cash cost of sales – Adjusted cash cost of sales for our copper and zinc operations is defined as the cost of the product delivered to the port of shipment, excluding depreciation and amortization charges, any one-time collective agreement charges or inventory wr
Slide 143: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of EBITDA and Adjusted EBITDA Three months Six months ended June 30, ended June 30, (CAD$ in millions) 2021 2020 2021 2020 Profit (loss) $ 260 $ (185) $ 552 $ (496) Finance expense net of finance income 51 114 102 161 Provision for (recovery of) income taxe
Slide 144: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Impairment Adjusted EBITDA and Impairment Adjusted EBITDA Margin For the 12 Years Ending (C$ in millions) December 31, 2020 Steelmaking Coal Profit (loss) before taxes $ 15,847 Finance expense net of finance income 398 Depreciation and amortization 7,808
Slide 145: Non-GAAP Financial Measures
Non-GAAP Financial Measures Copper Unit Cost Reconciliation Three months ended Three months ended Year ended Year ended (C$ in millions, except where noted) December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Revenue as reported $ 820 $ 592 $ 2,419 $ 2,469 By-product revenue (A)
Slide 146: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Gross Profit Before Depreciation & Amortization Margin from Mining Operations Year ended Year ended Year ended Year ended Six months ended (C$ in millions, except where noted) December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 June 3
Slide 147: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Gross Profit Before Depreciation & Amortization Margin from Mining Operations (cont.) Year ended Year ended Year ended Year ended Six months ended (C$ in millions, except where noted) December 31, 2017 December 31, 2018 December 31, 2019 December 31, 202
Slide 148: Non-GAAP Financial Measures
Non-GAAP Financial Measures Energy Operating Netback, Bitumen & Blended Bitumen Price Realized Reconciliations and Adjusted Operating Costs and Adjusted Operating Costs1 Three months Six months Three months Six months ended June 30, ended June 30, ended June 30, ended June 30, (CAD$ in millions, exc
Slide 149: Non-GAAP Financial Measures
Non-GAAP Financial Measures Energy Operating Netback, Bitumen & Blended Bitumen Price Realized Reconciliations and Adjusted Operating Costs and Adjusted Operating Costs1 Three months Six months ended June 30, ended June 30, (CAD$ in millions, except where noted) 2021 2020 2021 2020 Revenue as report
Slide 150: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Free Cash Flow (C$ in millions) 2003 to Q2 2021 Cash Flow from Operations $49,310 Debt interest paid (6,010) Capital expenditures, including capitalized stripping costs (30,828) Payments to non-controlling interests (NCI) (620) Free Cash Flow $11,852 Div
Slide 151: ESG Leadership
ESG Leadership Marcia Smith Senior Vice President Sustainability and External Affairs
Slide 152: Agenda
Agenda HSEC Performance Sustainability Strategy Climate Performance and Strategy ESG Resources for Investors 2
Slide 153: Health, Safety, Environment and Communities Performance
Health, Safety, Environment and Communities Performance Responding to COVID-19―Five Pillar Approach Prevention Employee Communities & Business Communication Support Public Health Continuity Prioritizing the health and safety of our people and communities 3
Slide 154: Health, Safety, Environment and Communities Performance
Health, Safety, Environment and Communities Performance • Safety performance in H1 2021 vs. FY 2020 Teck Operated Incident Frequency - 38% reduction in High-Potential Incidents (per 200,000 hours worked) - 26% decrease in Lost-Time Injury Frequency 0.70 0.60 • Continued implementation of High 0.50 P
Slide 155: Health, Safety, Environment and Communities Performance
Health, Safety, Environment and Communities Performance Indigenous Communities Peoples Engaging throughout the mining Respect for culture and heritage; early life-cycle to create lasting benefits engagement and focus on working to achieve Free, Prior and Informed Consent (FPIC) • $10.8 billion in ec
Slide 156: Health, Safety, Environment and Communities Performance
Health, Safety, Environment and Communities Performance Water Tailings Working to protect water quality and Meeting global best practices for safety at our reducing use in water-scarce regions. tailings facilities throughout their life-cycle • Tripling Elk Valley treatment capacity • Fully applying
Slide 157: Health, Safety, Environment and Communities Performance
Health, Safety, Environment and Communities Performance Biodiversity & Responsible Reclamation Production Working towards a net-positive impact Reducing waste and pollution and keeping on biodiversity materials in use • 5,930 hectares of cumulative land • 27,583 tonnes of waste recycled in 2020 recl
Slide 158: Health, Safety, Environment and Communities Performance
Health, Safety, Environment and Communities Performance Inclusion, Equity & Diversity Governance Fostering a workplace where everyone is Transparency and accountability to drive results included, valued and equipped for today for all our stakeholders and the future • 25% of Teck’s board of directors
Slide 159: Focus on Sustainability Leadership
Focus on Sustainability Leadership Ambitious sustainability goals in eight strategic themes Health and Safety Climate Change Responsible Production Our People Water Tailings Management Communities and Biodiversity and Indigenous Peoples Reclamation 9
Slide 160: Climate Change
Climate Change Starting from a strong position Well-positioned Among lowest Carbon pricing for a Low-Carbon carbon intensity already built into Economy miners globally majority of business CO2 Copper Intensity Curve (2020), t CO2e/t Copper equivalent CO2 Zinc Intensity Curve (2020), t CO2e/t Zinc eq
Slide 161: Climate Change
Climate Change Our climate strategy Positioning Teck for Support for appropriate Reducing our Adapting to the a low-carbon economy carbon pricing policies carbon footprint physical impacts • Producing metals and • We support broad-based Long-term targets: of climate change minerals required for effe
Slide 162: Climate Change
Climate Change Our pathway to net zero 2020‒2030: Target readily available; cost-competitive technologies in these areas Electrification & Abatement alternative material Electrification & Methane recovery Options Renewable energy handling low-carbon fuels & abatement Offsets Emissions Power supply M
Slide 163: Teck's High Quality Seaborne Steelmaking Coal Will Continue to Be a Key Resource
Teck’s High Quality Seaborne Steelmaking Coal Will Continue to Be a Key Resource in the Low-Carbon Transition Global steel industry emits Blast Furnace + Carbon Blast Furnace + CCUS is the Demand for Teck’s seaborne 7-10% of total greenhouse Capture, Utilization and only abatement technology high-qu
Slide 164: Sustainability Reporting and Rankings
Sustainability Reporting and Rankings Our Reporting Frameworks ESG Rankings Top-ranked mining company GRI Standards World & North American Indices Gold Class Award 2021 SASB Standards Top ranked North American company Task Force on Climate Related Financial Disclosures (TCFD) Top percentile, mining
Slide 165: ESG Resources for Investors
ESG Resources for Investors Holistic reporting suite • Sustainability reporting for 20 years in Core accordance with the Global Reporting Initiative (GRI) Standards and G4 Mining and Metals Sector Disclosures • Sustainability Report is aligned with Sustainability Accounting Standards Board (SASB) •
Slide 166: Summary
Summary Focused on ESG Leadership Positioned for Strong HSEC Long-term sustainability Third-party ESG a low-carbon economy performance strategy recognition Efficient, low-carbon Comprehensive management Strategy focused on eight Top ranked mining production of metals and approaches for all material
Slide 167: Appendix
Appendix Teck
Slide 168: Endnotes: ESG Leadership
Endnotes: ESG Leadership Slide 10: Climate Change, Starting from a strong position 1. Source: Skarn Associates, Q2 2021 update to 2020 dataset for global carbon intensity performance of steelmaking coal assets. Includes Scope 1 and 2 emissions. 18
Slide 169: Summary
Summary Teck
Slide 170: Investor and Analyst Day
Investor and Analyst Day September 21, 2021