Zora Toor James Kwok Emily-Jane Bartel Tingming (Rick) Sun

1. Zora Toor James Kwok Emily-Jane Bartel Tingming (Rick) Sun

2. Agenda • Industry Overview • Teck • Freeport-McMoran • BHP Billiton

3. Copper • An Internationally traded commodity • Prices: • Volatile • Cyclical • Determined by the major metals exchanges • New York Mercantile Exchange (COMEX) • London Metals Exchange (LME) • Shanghai Futures Exchange (SHFE0 copper

4. Copper Prices copper

5. Copper prices • Prices: Largest yearly increase on record in 2009 • Increased 153% • US$1.32/lb at the end of 2008 on the LME • US$3.33/lb at the end of 2009 on the LME • Average Price for 2009 = US$2.34 • Down US$0.83 • Average Price for 2008 = US$3.17 • Currently • Prices are trading approximately 42% higher than in 2009 average prices copper

6. Copper Demand • Copper demand exceeded 18 million tonnes in 2009 • Reflects the rate of underlying world economic growth, particularly in industrial production and construction • Global copper consumption fell by 1.3% in 2009 • North America: Demand down 9% • Europe: Demand down 12% • Germany: Demand down 12% • France: Demand down 9% • China: Demand up 42% copper

7. Copper Demand • Factors affecting demand • Global Economic Conditions • Instability Decreases Demand (US. and Europe) • Industrialization • Increases consumption (China and India) • Copper imports by China advanced to a record in 2009, driving global prices up 140 percent. copper

8. Copper Demand copper

9. Copper Demand copper

10. Copper Demand copper

11. Copper’s unique properties • Electrical Conductivity • Exceptional current carrying capacity • Corrosion Resistance • In the presence of moisture, copper retains its functionality for centuries • High thermal conductivity • Can heat up to eight times better than other metals copper

12. Copper’s unique properties • Antimicrobial Effect: • A significant deterrent to the transmission of fungal and bacterial disease • Ease of Fabrication and Formability • Its strength and formability make copper idea for applications where repetitive actions stress the components • Springs, electrical switches, electrical connectors and fasteners copper

13. outlook • Consumption Expected to Increase • To support the development of emerging markets, notably in China, India and Brazil • Driven by the expansion of green technology • Hybrid vehicle requires 13-23 more kilograms of copper than a non-hybrid vehicle • A wind turbine requires over three tones of copper, amounting to 1.6 percent of the overall weight of the structure • Energy-efficient and infinitely recyclable • Increased use of antimicrobial properties • In 2008 the US Environmental Protection Agency registered 275 copper alloys as antimicrobial materials • Suitable for hospitals because of the fast rate at which germs die on copper surfaces copper

14. Risks and Uncertainties copper

15. Potential Hedging strategies • Energy Prices • Copper Prices • Exchange Rates • Interest Rates copper

16. coal • The world’s most abundant and widely distributed fossil fuel • Was the most important source of the the world’s primary energy until it was taken over by oil in the late 1960s • 70% of the total world coal production is consumed for electricity generation • Uses: • Electricity generation • Steel production • Cement manufacturing • As a liquid fuel coal

17. Coal consumption • Consumption • China: 2.7 billion tons • US: 1.02 billion • Worldwide: 6.65 billion tons Coal

18. Coal consumption • Since 2000, global coal consumption has grown faster than any other fuel • Consumption in 2009: • Around 5.8 billion tonnes of hard coal • Around 953 million tonnes of brown coal • The biggest market for coal is in Asia • Currently accounts for 56% of global coal consumption coal

19. Coal production • Production • China: 2.78 billion tons • US: 1.06 billion tons • Worldwide: 6.78 billion tons coal

20. Coal production

21. Coal prices • Prices are trading approximately 42% higher than in 2009 average prices • A result from increased demand and constrained supply, which results in a tight market and upward pressure on prices • Price fluctuations are caused by disruptions of supply and demand • Substantial disruption in China’s economic growth • Increased supply of hard coking coal from domestic Chinese suppliers • Developments of new resources of high quality hard coking coal • Infrastructure improvements in Australia and Mozambique coal

22. outlook • 2010 is expected to be a year of transition as the global economy recovers from the recession • Indicators are showing signs of strength • Demand for metallurgical coal snapped back dramatically compared to 2009 and is continuing to grow • Asian economies are recovering rapidly and are importing metallurgical coal at a fast pace • Demand for thermal coal is also on the rise due to: • A colder winter in the US • Higher natural gas prices • Improved economy • Demand is expected to rebound further copper

23. Risks and Uncertainties coal

24. zinc • Zinc is the fourth most common metal • Iron, aluminum, and copper are the others • More than 50 countries around the world mine zinc ore • Largest Producers: • Australia, Canada, China, Peru and the United States • Mining methods: • Mined underground: • 80% of the world’s zinc • Mined in open pits: • 8% of the world’s zinc • Combination: • 12% of the world’s zinc zinc

25. Zinc Prices Prices are mainly affected by global supply and demand zinc

26. Zinc prices • Market prices are affected by many variables including: • Regional supply and demand • Political and economic conditions • Inflation expectations • Speculative activities • Production costs in major producing regions • Since March 2009 to the end of the year, the price of zinc more than doubled • LME stocks increased on 42% zinc

27. Zinc Demand • Nearly 11 million tons of zinc were consumed worldwide in 2009 • In 2009, China imported 61% more zinc concentrates than in 2008 • China imported 640,000 tonnes in 2009, while in 2008 it imported 112,000 • Global consumption is estimated to have declined by 5% in 2009 • Although by the end of 2009 global demand started to pick up as economic conditions began to improve zinc

28. Zinc Demand zinc

29. Zinc Demand Zinc production and consumption is on the rise Zinc

30. Zinc’s unique properties • High Strength • Formability • Light weight • Corrosion Resistance • Aesthetics • Recyclability • Low Cost zinc

31. Zinc Demand Zinc is mainly used for: • Protective coating on steel to prevent corrosion (galvanizing) • Die casting for precision components • Construction Material • An alloying metal with copper to make brass • Chemical compounds in pharmaceuticals, cosmetics, rubber, primer and paint • Micronutrients for humans, animals and plants zinc

32. Zinc production • Worldwide production of zinc in 2008 is estimated at over 11.6 million tons • According to International Lead and Zinc Study Group (ILSG), global mine production fell by over 300,000 tonnes of zinc in 2009 ove Zinc

33. outlook • In 2010, it is estimated that zinc metal demand will increase above trend growth, particularly in industries such as construction, automotive and transport • Restocking of inventories will occur • Mine production and ultimately refined production is expected to increase at a greater rate than demand for 2010 Zinc

34. Potential risks Zinc

35. Ticker: TCK

36. About teck • Canada’s largest diversified mining, mineral processing and metallurgical company • Headquartered in Vancouver, Canada • Produce copper, metallurgical coal and zinc, molybdenum and specialty metals, with several oil sands development • 13 mines in Canada, the USA, Chile and Peru

37. About teck

38. About teck Profits and Revenues • Copper: produced 313,000 tonnes, 40% of profits and 31% of revenue. • Coal: production reached 23 million tonnes, share of production was 14 million tonnes. 35% of revenue and 42% of profits • Zinc: 663,000 tonnes of zinc in concentrate and 270,000 tonnes of refined zinc. 30% of revenue and 15% of profits

39. About teck Profits and Revenues

40. Market Profile

41. Risk Exposures • Liquidity • Foreign exchange • Interest rates • Commodity price • Credit risk • Capital market • Do not have practice of trading derivatives

42. Financial Instruments • Cash and cash equivalents are designated as held for trading. • Temporary investments are designated as available-for-sale • Investments in Marketable Securities • Short-Term Debt and Long-Term Debt • Derivative Instruments: embedded • Certain derivative investments may qualify for hedge accounting.

43. Financial Instruments Foreign Exchange • Primarily: USD Lesser Extent: Chilean peso • Majority operating expense: CAD • hedged a portion FCF from USD sales until 2013 with US dollar forward sales contracts

44. Financial Instruments Interest Rate • Arises from cash and cash equivalents, floating rate debt and interest rate swaps. • Borrow at fixed rates to match the duration of long lived assets • Floating rate funding may be used • As at December 31, 2009, with other variables unchanged, 1% change in LIBOR rate would have $36 million effect on net earnings.

45. Financial Instruments Commodity Price • Changes in fair value caused by settlement adjustments to receivables and payables and forward contracts for zinc and lead • Zinc and lead forward contracts outstanding

46. Financial Instruments Liquidity • Planning, budgeting and forecasting processes to help determine funding requirements to meet various contractual and other obligations.

47. Financial Instruments Credit Risk • Arises from the non-performance by counterparties of contractual financial obligations • Manage credit risk for trade and other receivables through established credit monitoring activities • Maximum exposure: carrying value of our cash and cash equivalents, receivables and derivative assets

48. Financial Instruments Derivatives and Hedges • Cash Flow Hedges • At December 31, 2009, US dollar forward sales contracts with a notional amount of $284 million remained outstanding. Matures varying 2010-2013 • Economic Hedge Contracts • As at December 31, 2009, the 114 million pounds of zinc forward purchase contracts were offsetting positions to the 114 million pounds of zinc forward sales contracts • Do not apply hedge accounting to the commodity forward sales contracts

49. Sensitivity Analysis

50. Derivatives