Teck Resources Profile
Teck Resources Limited (Teck) engages in exploring for, acquiring, developing, producing and selling natural resources. The company’s activities are organized into business units focused on copper, zinc, steelmaking coal, and energy.
The company’s principal products are copper, zinc, steelmaking coal, and blended bitumen. In addition, the company produces lead, silver, molybdenum, and various specialty and other metals, chemicals and fertilizers. The company is actively explores for copper, zinc and gold.
Copper
The company produces both copper concentrates and copper cathode. The company’s principal market for copper concentrates is Asia, with a lesser amount sold in Europe. Copper concentrates produced at the Highland Valley Copper mine are distributed to customers in Asia by rail to a port in Vancouver, British Columbia, and from there by ship. Copper concentrates produced at Antamina are transported by a slurry pipeline to a port at Huarmey, Peru, and from there go by ship to customers in Asia and Europe. Copper concentrates produced at Carmen de Andacollo are trucked to the port of Coquimbo, Chile, and from there are carried by ship to customers in Asia, Europe and South America. Copper concentrates are sold primarily under long-term contracts, with treatment and refining charges negotiated on an annual basis. Copper cathode from the company’s Quebrada Blanca and Carmen de Andacollo mines is trucked from the mines to a port from where it is shipped and sold primarily under spot contracts to customers in Asia and Europe. Copper concentrates are sold primarily under long-term contracts, with treatment and refining charges negotiated on an annual basis. Copper cathode from the company’s Quebrada Blanca and Carmen de Andacollo mines is trucked from the mines to a port from where it is shipped and sold primarily under spot contracts to customers in Asia and Europe. All of the company’s revenues from the sale of copper concentrates and copper cathode were derived from sales to third parties.
Zinc
The company produces refined zinc through its metallurgical operations at Trail and zinc concentrates through its mining operations. The company’s principal markets for refined zinc are North America and Asia. Refined zinc produced at the company’s metallurgical operations at Trail, British Columbia, is distributed to customers in North America by rail and/or truck and to customers in Asia by ship.
The company produces zinc concentrates at its Red Dog mine in the United States and the Antamina mine in Peru, in which it indirectly owns 22.5%. The majority of concentrate sales are pursuant to long-term contracts at market prices, subject to annually negotiated treatment charges. The company’s principal markets for zinc concentrates are Asia, Australia, Europe and North America. Zinc concentrates from the company’s Red Dog mine in Alaska are moved via truck from the mine to its port where they are stored until the summer shipping season and then loaded onto ships to Asia, Australia and Europe. Zinc concentrates produced at Antamina are transported by a slurry pipeline to a port at Huarmey, Peru, and from there go by ship to customers in Asia, Australia and Europe.
In 2021, the majority of the zinc concentrate produced at Red Dog was shipped to customers in Asia, Australia and Europe, with the balance being shipped to the company’s metallurgical facilities at Trail, British Columbia. Red Dog's lead concentrate production is also shipped to Trail and to customers in Asia, Australia and Europe. The shipping season at Red Dog is restricted to approximately 100 days per year because of sea ice conditions. Red Dog’s sales are seasonal, with the majority of sales occurring in the last five months of each year (year ended December 31, 2021). Concentrate is stockpiled at the port facility and is typically shipped between early July and the end of October. All of the company’s 2021 revenues from the sale of refined zinc and zinc concentrates (other than zinc concentrates produced at Red Dog that are sold to Trail) were derived from sales to third parties.
Steelmaking Coal
The company’s hard coking coal, a type of steelmaking coal, is used primarily for making coke by integrated steel mills in Asia, Europe and the Americas. Approximately 75% of the coal the company produces is high-quality hard coking coal, although the percentages can vary from period to period. The company also produces lesser-quality semi-hard coking coal, semi-soft coking coal and PCI coal products, which in aggregate accounted for almost 25% of its annual sales volume in 2021.
Steelmaking coal is processed at the company’s mine sites and primarily shipped westbound from its mines by rail to terminals on the coast of British Columbia and from there by vessel to overseas customers. In 2021, close to 5% of the company’s processed coal was shipped eastbound directly by rail, or by rail and by ship via Thunder Bay, to customers in North America.
Quarterly contract-priced sales represent approximately 40% of the company’s sales, with the balance of its sales priced at levels reflecting market conditions when sales are concluded. The majority of the company’s lower-grade semi-soft and pulverized coal injection (PCI) sales continue to be negotiated on a quarterly benchmark basis. Substantially all of the company’s revenues from the sale of coal products were derived from sales to third-party end users, most of which are steelmakers.
Energy
The company’s 21.3% share of Fort Hills bitumen production is transported on the Northern Courier Pipeline to the East Tank Farm (ETF) in Alberta. The ETF, owned by the Thebacha Limited Partnership and operated by an affiliate of Suncor, blends bitumen with diluent to meet pipeline density and viscosity specifications. The diluent is sourced by Teck at Edmonton and delivered to the ETF on the Norlite Pipeline. The company’s proprietary blended bitumen is transported from the ETF on the Wood Buffalo Pipeline to Hardisty, Alberta, where it is marketed as Fort Hills Reduced Carbon Life Cycle Dilbit Blend, or FRB. Teck’s principal markets for the company’s FRB are refinery operators throughout North America.
The company’s contracted tankage at Hardisty is connected to major export pipelines, including the Enbridge common carrier pipeline, the Keystone pipeline and the Express crude oil pipeline; it is also connected to a large unit train loading facility. The company sells approximately 80% of its FRB to a variety of customers at the Hardisty market hub and approximately 20% on the U.S. Gulf Coast. The company has entered into a long-term take-or-pay transportation agreement on the Keystone pipeline to ship 10,000 barrels per day of blended bitumen to customers on the U.S. Gulf Coast. The balance of the company’s production is either sold at Hardisty or shipped to customers via the Enbridge common carrier pipeline, or transported by rail if required. Canadian heavy crude oil of the kind the company produces trades at a differential to West Texas Intermediate (WTI), and is known as Western Canadian Select or WCS.
Individual Operations
Copper
Copper Operations
Highland Valley Copper Mine, Canada (Copper)
The company holds a 100% interest in the Highland Valley Copper mine located near Kamloops, British Columbia through its wholly owned subsidiary Teck Highland Valley Copper Partnership.
Highland Valley’s primary product is copper concentrate; it also produces molybdenum in concentrate. The property comprising the Highland Valley Copper mine covers a surface area of approximately 50,000 hectares and is held pursuant to various mineral leases, mineral claims and Crown grants. The Highland Valley Copper mine is located adjacent to Highway 97C connecting Merritt, Logan Lake and Ashcroft, British Columbia. Access to the mine is from a 1-kilometre access road from Highway 97C. The mine is approximately 50 kilometres southwest of Kamloops, and approximately 200 kilometres northeast of Vancouver. The mine operates throughout the year. Power is supplied by BC Hydro Corporation (BC Hydro) through a 138-kilovolt line that terminates at the Nicola substation east of Merritt. Mine personnel live in nearby areas, primarily Logan Lake, Kamloops, Ashcroft, Cache Creek and Merritt.
The mine is an open pit operation. The processing plant, which uses autogenous and semi-autogenous grinding and flotation to produce metal in concentrate from the ore, has the capacity to process up to 155,000 tonnes of ore per day, depending on ore hardness.
The Highmont deposit is entirely hosted within the Skeena granodiorite and the Gnawed Mountain Composite Dyke (GMCD) that has traditionally been described as a multiphase intrusion. The Bethsaida phase of the batholith occurs 750 metres southwest of the deposit, with historical logged intercepts of Bethsaida within the deposit interpreted to be phases of the GMCD.
In 2021, 10 drillholes totalling 1,220 metres were completed in the Valley pit to further refine geoscience and resource models by providing additional infill data and supplemental geochemistry to more accurately inform geometallurgical models. This data was targeted to support the 2021 to 2023 Valley pit production phases. Four holes totalling 806 metres were drilled in the Highmont Pit.
Highland Valley Copper’s 2021 copper production was 130,800 tonnes. Copper production in 2022 is anticipated to be between 127,000 and 133,000 tonnes, with a relatively even distribution throughout the year. Copper production from 2023 to 2025 is expected to be between 130,000 and 160,000 tonnes per year. Molybdenum production in 2022 is expected to be between 0.8 million and 1.3 million pounds, with production expected to be between 3.0 million and 5.0 million pounds per year from 2023 to 2025.
The company continues to advance the Highland Valley Copper 2040 project (HVC 2040) to extend the life of the operations to at least 2040, through an extension of the existing site infrastructure. HVC 2040 will undergo an environmental assessment under the 2002 B.C. Environmental Assessment Act. The Highland Valley copper mine is subject to the B.C. Mineral Tax.
Antamina Mine, Peru (Copper and Zinc)
The company indirectly owns 22.5% of the Antamina copper/zinc mine in Peru, with the balance held indirectly by BHP Billiton plc (33.75%), Glencore plc (33.75%) and Mitsubishi Corporation (10%). The participants’ interests are represented by shares of Compañía Minera Antamina S.A. (CMA), the Peruvian company that owns and operates the project.
The Antamina property consists of numerous mining concessions and mining claims covering an area of approximately 92,300 hectares and an area of approximately 15,000 hectares of surface rights. These rights, concessions and claims can be held indefinitely, contingent upon the payment of annual licence fees and provision of certain production and investment information. CMA also owns a port facility located at Huarmey and an electrical substation located at Huallanca. In addition, CMA holds title to all easements and rights-of-way for the 302-kilometre concentrate pipeline from the mine to CMA’s port at Huarmey.
The deposit is located at an average elevation of 4,200 metres, 385 kilometres by road and 270 kilometres by air north of Lima, Peru. In 2021, the drilling program consisted of 28 directional drillholes totalling 11,478 metres and 50 non-directional drillholes totalling 16,372 metres. The total program consisted of approximately 27,850 metres completed within the Antamina pit. For diamond core, three-metre samples on average of half core (HQ or NQ) are collected and prepared for assay at an external laboratory. The remaining half of the core is retained for future reference.
On a 100% basis, Antamina’s copper production in 2021 was 445,300 tonnes. Zinc production was 462,200 tonnes in 2021. In 2021, molybdenum production was 4.9 million pounds, which was 38% lower than in 2020.
The company’s 22.5% share of 2022 production at Antamina is expected to be in the range of 91,000 to 96,000 tonnes of copper, 90,000 to 95,000 tonnes of zinc and 1.8 to 2.2 million pounds of molybdenum. The company’s share of annual copper production is expected to be between 90,000 and 95,000 tonnes from 2023 to 2025. The company’s share of annual zinc production is expected to average between 80,000 and 100,000 tonnes per year during 2023 to 2025, with annual production fluctuating due to feed grades and the amount of copper-zinc ore available to process. The company’s share of annual molybdenum production is expected to be between 3.0 and 4.0 million pounds between 2023 and 2025.
CMA has entered into long-term off-take agreements with affiliates of the Antamina shareholders on market terms for copper, zinc and molybdenum concentrates. Under a long-term streaming agreement with FN Holdings ULC (FNH), a subsidiary of Franco-Nevada Corporation, Teck has agreed to deliver silver to FNH equivalent to 22.5% of the payable silver sold by CMA. The streaming agreement restricts distributions from Teck Base Metals Ltd., the company’s subsidiary that holds its 22.5% interest in CMA, to the extent of unpaid amounts under the agreement if there is an event of default under the streaming agreement or an insolvency of Teck. CMA, which owns and operates Antamina, is not a party to the agreement and operations are not affected by it.
Quebrada Blanca Mine, Chile (Copper)
The Quebrada Blanca mine is owned by a Chilean private company, Compañía Minera Teck Quebrada Blanca S.A. (QBSA). Teck holds an indirect 60% interest in QBSA (66.67% of the Series A shares); (Sumitomo Metal Mining Co., Ltd.) SMM/SC collectively hold an indirect 30% interest in QBSA (33.33% of the Series A shares) and Empresa Nacional de Minería (ENAMI), a Chilean government entity, holds a 10% carried interest (100% of the Series B shares), which does not require ENAMI to fund capital spending.
QBSA owns the exploitation and/or exploration rights in the immediate area of the Quebrada Blanca deposit pursuant to various mining concessions and other rights. There are approximately 131,500 hectares of mining rights incorporating exploitation and exploration mining concessions held in the name of QBSA. The exploitation mining concessions have no expiry date. In addition, QBSA holds surface rights covering the mine site and other areas aggregating approximately 34,800 hectares, as well as certain other exploration rights in the surrounding area and certain water rights.
The Quebrada Blanca property is located in the Tarapacá Region of northern Chile approximately 240 kilometres southeast of the port city of Iquique and 1,500 kilometres north of the city of Santiago, the capital of Chile. The Quebrada Blanca property is located approximately 4,400 metres above sea level. The Quebrada Blanca orebody occurs within a 5-kilometre by 2-kilometre quartz monzonite intrusive stock. QBSA is also subject to federal income tax in Chile.
Quebrada Blanca Operations
Quebrada Blanca is an open pit mine. Quebrada Blanca produced 11,500 tonnes of copper cathode in 2021. Copper cathode production is expected to continue through 2023 using existing leach piles and ore that is expected to be mined in the first half of 2022. The company expects cathode production of approximately 10,000 to 11,000 tonnes in 2022 and 5,000 tonnes in 2023.
Quebrada Blanca Phase 2
As previously outlined, Quebrada Blanca Phase 2 (QB2) is expected to extend the life of the existing mine as a large-scale concentrate-producing operation. The project scope includes the construction of a 143,000-tonne-per-day concentrator and related facilities, which will be connected to a new port and desalination plant by approximately 165-kilometre concentrate and desalinated water pipelines.
QBSA has long-term arrangements with AES Gener S.A., to enable QBSA to transition to renewable energy for approximately half of the power required for the operation of Quebrada Blanca Phase 2 (QB2). Quebrada Blanca concentrate production is expected to commence in the second half of 2022 following commissioning of QB2, in line with previous guidance. QB2 has a 28-year mine life and the Sanction Case includes 199 million tonnes of inferred resources within the life of mine plan.
Quebrada Blanca Mill Expansion
The Quebrada Blanca Mill Expansion project progressed in 2021, with a focus on trade-off studies in preparation for the start of the prefeasibility study.
Carmen de Andacollo Mine, Chile (Copper)
The Carmen de Andacollo property is owned by a Chilean private company, Compañía Minera Teck Carmen de Andacollo (CDA). The company owns 100% of the Series A shares of CDA while Empresa Nacional de Minería (ENAMI) owns 100% of the Series B shares of CDA. The company’s Series A shares of CDA equate to 90% of CDA’s total share equity and ENAMI’s Series B shares comprise the remaining 10% of total share equity.
CDA owns the exploitation and/or exploration rights over an area of approximately 30,000 hectares in the area of the Carmen de Andacollo supergene and hypogene deposits pursuant to various mining concessions and other rights. In addition, CDA owns the surface rights covering the mine site and other areas aggregating approximately 2,700 hectares, as well as certain water rights.
The Carmen de Andacollo property is located in the Coquimbo Region in central Chile. The site is adjacent to the town of Carmen de Andacollo, approximately 55 kilometres southeast of the city of La Serena and 350 kilometres north of Santiago. Access to the Carmen de Andacollo mine is by paved roads from La Serena. The mine is located near the southern limit of the Atacama Desert at an elevation of approximately 1,000 metres. The climate around Carmen de Andacollo is transitional between the desert climate of northern Chile and the Mediterranean climate of the Santiago area. The majority of mine personnel live in the town of Andacollo, immediately adjacent to the mine, or in the nearby cities of Coquimbo and La Serena. In August 2020, CDA entered into a long-term power purchase agreement to provide 100% renewable power for Carmen de Andacollo Operations.
The Carmen de Andacollo orebody is a porphyry copper deposit consisting of disseminated and fracture-controlled copper mineralization contained within a gently dipping sequence of andesitic to trachytic volcanic rocks and sub-volcanic intrusions. The Carmen de Andacollo mine is an open pit mine. Copper concentrate is produced by processing hypogene ore through semi-autogenous grinding and a flotation plant with the capacity to process up to 55,000 tonnes of ore per day, depending on ore hardness.
Carmen de Andacollo produced 43,500 tonnes of copper contained in concentrate in 2021, primarily due to lower copper grades. Copper cathode production was 1,300 tonnes in 2021, compared with 2,000 tonnes in 2020. Gold production of 35,800 ounces in 2021 was lower than the 49,200 ounces produced in 2020, with 100% of the gold produced for the account of RGLD Gold AG, a wholly owned subsidiary of Royal Gold, Inc.
Carmen de Andacollo’s production in 2022 is expected to be in the range of 45,000 to 50,000 tonnes of copper. Annual copper in concentrate production is expected to be between 50,000 and 60,000 tonnes for 2023 to 2025. The life of mine for Carmen de Andacollo is expected to continue until 2036; however, additional permitting or amendments will be required to operate through to 2036.
Project Satellite
As part of Teck’s copper growth strategy, Teck and the company’s partners continue to advance social, environmental, technical and permitting studies to advance five substantial base metals assets. The five assets, which comprise the Project Satellite initiative - Zafranal, San Nicolás, Galore Creek, Mesaba and Schaft Creek - are all located in the Americas in jurisdictions where Teck has experience carrying out advanced exploration activities, project work and permitting activities, developing strong community and stakeholder relationships, and, except for Mexico, operating mines.
Zafranal, Peru (Copper-Gold)
The Zafranal property, located in southern Peru, 85 kilometres northwest of Arequipa within the Provinces of Castilla and Caylloma, is a mid-sized copper-gold porphyry deposit discovered by Teck in 2004. The project is held by Compañia Minera Zafranal S.A.C. (CMZ), in which Teck holds an 80% interest, with Mitsubishi Materials Corporation holding the remaining 20%.
In 2021, the company focuses on advancing its social and environmental impact assessment (SEIA). The company also continued to maintain an active engagement with key stakeholders and to invest in the local communities, including by responding to needs specific to the impacts of COVID-19.
San Nicolás, Mexico (Copper-Zinc)
The San Nicolás property, located in Zacatecas State, is a copper-zinc massive sulphide deposit with minor gold and silver content. The property is held by Minas de San Nicolás, S.A. de C.V. which is a wholly owned subsidiary of Teck.
In 2021, the company completed a prefeasibility study and a draft environmental impact assessment and continued to advance value-added engineering and planning work to support the start of a feasibility study in the first quarter of 2022. The company also reached a 30-year lease agreement with the Ejido Bajío San Nicolás for land use, reached an agreement with the Community Water Association of Bajío de San Nicolás that re-established delivery of water to the residents of the town, finalized the purchase of several key land parcels in the project area, and secured additional water source rights in the district.
Galore Creek, Canada (Copper-Gold-Silver)
The Galore Creek property, located in Tahltan territory in northwestern British Columbia approximately 150 kilometres northwest of the port of Stewart, B.C. and 370 kilometres northwest of Smithers, B.C., is a significant copper-gold-silver porphyry deposit. The project is owned by the Galore Creek Partnership, a 50/50 partnership between Teck and Newmont Corporation (Newmont), and is managed by Galore Creek Mining Corporation (GCMC), a wholly owned subsidiary of the Galore Creek Partnership.
Mesaba, United States (Copper-Nickel-PGM)
The Mesaba property, located in northeastern Minnesota 100 kilometres north of Duluth, is part of a potentially significant copper, nickel and platinum-palladium-cobalt mining district in the United States. Known ore deposits in the district, including Mesaba, consist of metallurgically complex disseminated copper-nickel sulphides that require a range of mineral processing steps to make saleable concentrate or metal products while meeting state and federal requirements to protect the environment. Mineral rights over the Mesaba deposit are held 100% by Teck through lease agreements with private interests and the state of Minnesota.
Schaft Creek, Canada (Copper-Molybdenum-Gold-Silver)
The Schaft Creek property, located in Tahltan territory in northwestern British Columbia, approximately 61 kilometres south of Telegraph Creek and 37 kilometres northeast of the Galore Creek property, is a joint venture between Teck and Copper Fox Metals Inc., with Teck holding a 75% interest and acting as the operator.
Other Copper Projects
NuevaUnión, Chile
NuevaUnión is a 50/50 partnership between Teck and Newmont, consisting of the copper-gold La Fortuna deposit and the copper-molybdenum Relincho deposit and located approximately 40 kilometres apart in the Huasco Province in the Atacama region of Chile.
ZINC
Mining Operations
Red Dog Mine, the United States (Zinc, Lead)
The Red Dog zinc-lead mine, concentrator and shipping facility in the Northwest Arctic Borough, approximately 144 kilometres north of Kotzebue, Alaska. The Red Dog mine is operated by Teck Alaska Incorporated (Teck Alaska) on lands owned by, and leased from, the NANA Regional Corporation (NANA), a Regional Alaska Native corporation. The Red Dog mine covers approximately 1,000 hectares.
Red Dog mine is located on a ridge between the middle and south forks of Red Dog Creek, in the DeLong Mountains of the Western Brooks Range. The topography is moderately sloping, with elevations ranging from 260 metres to 1,200 metres above sea level. Vegetation is classified as woody tundra. The mine is accessible from a paved airstrip, five kilometres from the Red Dog mine, which allows jet access from Anchorage and Kotzebue. Mine personnel are generally drawn from surrounding communities, as well as from other locations within the State and in North America. Power for the mine is produced on-site by diesel generators with a maximum capacity of 30 megawatts, sufficient for present and expected future power requirements. Potable water is sourced from Bons Creek.
Red Dog consists of a number of sedimentary hosted exhalative lead-zinc sulphide deposits hosted in Mississippian-age to Pennsylvanian-age sedimentary rocks.
In 2021, the majority of the zinc concentrate produced at Red Dog was shipped to customers in Asia, Australia and Europe, with the balance being shipped to the company’s metallurgical facilities at Trail, British Columbia. The lead concentrate production is also shipped to Trail and to customers in Asia.
In 2021, zinc production at Red Dog increased to 503,400 tonnes, primarily due to higher mill throughput, supported by continuous optimization of mill performance, including RACE21 advanced process control improvements in the mill. Red Dog’s production of contained metal in 2022 is anticipated to be in the range of 540,000 to 570,000 tonnes of zinc and 80,000 to 90,000 tonnes of lead. From 2023 to 2025, zinc production is expected to be in the range of 510,000 to 550,000 tonnes of contained zinc per year, while lead production is expected to be between 85,000 and 95,000 tonnes of contained lead per year.
The mine life, based on existing developed deposits, is expected to extend through to 2031. In 2021, the company continued an exploration drilling program and various studies focused on extending the life of Red Dog past 2031, including possible development of the Paalaaq, Anarraaq and Aktigiruq deposits.
Other Zinc Projects
The company has a 100% interest in the Teena/Reward project, which is located eight kilometres west of the McArthur River Mine in the Northern Territory of Australia.
Refining and Smelting
Trail Operations
Teck Metals owns and operates the integrated smelting and refining complex at Trail, British Columbia. The complex’s major products are refined zinc, lead and silver. It also produces a variety of precious and specialty metals, chemicals and fertilizer products.
The zinc refinery consists of six major metallurgical plants, one fertilizer plant and two specialty metal plants. Depending on the mix of feeds, the facility has an annual capacity of approximately 300,000 to 315,000 tonnes of refined zinc. Zinc concentrates are initially treated in either roasters or pressure leach plants, where sulphur is separated from the metal-bearing solids. The zinc is put into solution where it is first purified to remove other metal impurities and then electroplated onto cathodes in an electrolytic refining plant.
Refined zinc production in 2021 was 279,000 tonnes, lower than 305,100 tonnes in 2020. Refined zinc production in 2021 was impacted by a temporary air-quality-related shutdown of the oxygen plant due to wildfires in the region, as well as unplanned maintenance and operational challenges. Refined lead production in 2021 was 81,400 tonnes. Silver production was 11.7 million ounces in 2021, which was similar to 2020 at 11.5 million ounces.
The company’s recycling process treated 39,800 tonnes of material during the year, and it plans to treat about 38,100 tonnes in 2022. The company’s arrangement with BC Hydro retains its prior obligation to provide for the firm delivery of energy and capacity from Waneta to BC Hydro until 2036. If Teck Metals fails to deliver power as provided for in the agreement, it could be liable to pay liquidated damages to BC Hydro based on the market rate for power at the time of the shortfall. The company also owns the related 15-kilometre transmission and distribution system from Waneta to the United States, which BC Hydro has agreed to purchase on a deferred schedule.
Steelmaking Coal
The company’s steelmaking coal mineral holdings consist of a mix of fee simple lands owned by it and Crown leases and licences, which are subject to leasing and licensing fees. All of Teck’s operating steelmaking coal mines are in British Columbia and are subject to the B.C. Mineral Tax. In 2021, the company’s steelmaking coal operations produced 24.6 million tonnes of coal.
Elk Valley Water Quality Management
The company continues to implement the water quality management measures required by the Elk Valley Water Quality Plan (the Plan). The company’s existing Saturated Rock Fills (SRFs) and AWTFs are operating as designed and provide up to 47.5 million litres per day of water treatment capacity in the Elk Valley. This includes the Fording River Operations South Active Water Treatment Facility (FRO-S AWTF), which advanced commissioning in the fourth quarter of 2021 and is treating water and ramping up to full capacity.
Coal Transportation
The company has a long-term agreement until December 2026 with Canadian National Railway Company (CN Rail) for shipping steelmaking coal from its four B.C. operations via Kamloops to Neptune Bulk Terminals (Neptune) and other west coast ports, including Ridley Terminals Inc. (Ridley). The company has a long-term agreement with Ridley for shipments of steelmaking coal from Teck’s B.C. operations that provides for shipments of up to 6 million tonnes per annum through to December 2027. In 2021, the company entered into an agreement with Westshore Terminals (Westshore) for the shipment of steelmaking coal beyond the expiry of its previous contract in March 2021. The new agreement provides for the shipment of between 5 and 7 million tonnes per annum at fixed loading charges, for a total of 33 million tonnes over a period of approximately five years.
Coal Operations
Fording River Mine, B.C., Canada
The Fording River mine is located 29 kilometres northeast of the community of Elkford, in southeastern British Columbia. The mine site consists of approximately 23,000 hectares of coal lands, including four operating surface coal pits along with several areas planned for surface mine development held under multiple contiguous coal leases and licences. The leases and licences relating to Fording River are held by Teck Coal Limited (Teck Coal). Teck Coal also controls the surface and subsurface rights to the properties that are in operation and those that are planned for development.
Coal mined at Fording River is primarily steelmaking coal, although lesser quantities of lower-grade hard coking coal are also produced. The annual production capacities of the mine and preparation plant are approximately 9.0 million and 9.5 million tonnes of clean coal, respectively.
Fording River’s reserve areas include Eagle Mountain, Swift, Turnbull and Castle Mountain. Approximately half of the production is derived from the Eagle Mountain pit area, with the other half produced from the Swift pit area. Proven and probable reserves at Fording River are projected to support mining for a further 38 years. Fording River Extension Project (FRX), adjacent and south of existing operations, is expected to provide a new source of mineable steelmaking coal. In 2021, 77 reverse circulation drillholes, totalling 16.7 kilometres, were drilled in the Lake, Swift and Eagle active pit areas.
Elkview Mine, B.C., Canada
Teck Coal has a 95% partnership interest in the Elkview Mine. The remaining 5% is indirectly held equally by Nippon Steel & Sumitomo Metal Corporation, a Japanese steel producer, and POSCO, a Korean steel producer, each of which acquired a 2.5% interest in 2005. The Elkview mine is an open pit coal mine located approximately 3 kilometres east of Sparwood in southeastern British Columbia. The mine site consists of approximately 27,100 hectares of coal lands.
Greenhills Mine, B.C., Canada
Greenhills is operated under a joint venture agreement among Teck Coal, POSCO Canada Limited (POSCAN) and POSCAN’s parent, POSCO. Pursuant to the joint venture agreement, Teck Coal has an 80% interest in the joint venture while POSCAN has a 20% interest. Teck Coal and POSCAN own the mine equipment and preparation plant in proportion to their respective joint venture interests. Under the joint venture agreement, Teck Coal is the manager and operator of Greenhills and takes 80% of all coal produced at Greenhills. POSCAN takes the remaining 20% and pays a quarterly royalty based on the price achieved for Greenhills coal sales.
The Greenhills mine is located 8 kilometres northeast of the community of Elkford, in southeastern British Columbia. The mine site consists of approximately 11,800 hectares of coal lands. In 2021, 86 reverse circulation drillholes, totalling 24.3 kilometres, including five geotechnical reverse circulation holes, were drilled in the Phase 4 and 7 active pit areas and Swift Phase 4 area.
Line Creek Mine, B.C., Canada
The Line Creek mine is located approximately 25 kilometres north of Sparwood in southeastern British Columbia. Line Creek supplies steelmaking and PCI coal to a variety of international and domestic customers. The Line Creek property consists of approximately 8,200 hectares of coal lands. The annual production capacity of the mine and preparation plant is approximately 4.0 million tonnes of clean coal. Proven and probable reserves at Line Creek are projected to support mining for a further 12 years.
Cardinal River Mine, Alberta, Canada
The company’s Cardinal River mine in Alberta has been closed since 2020 and remains on care and maintenance.
Coal Mountain Mine, B.C., Canada
The company’s Coal Mountain mine in southeastern British Columbia has been closed since 2019 and remains on care and maintenance.
Quintette Coal Project, B.C., Canada
The company’s Quintette mine in northeastern British Columbia has been closed since 2000 and remains on care and maintenance.
Energy
Fort Hills Mine
Fort Hills mines, extracts and sells the recoverable bitumen found in certain oil sands deposits underlying six Alberta Oil Sands Leases No.’s 7404080933, 7404080932, 7400120008, 7406020438, 7405090634 and 7406020437. The Fort Hills (Fort Hills Energy Limited Partnership) leases are located approximately 90 kilometres north of Fort McMurray, Alberta, and covers a contiguous area of approximately 23,675 hectares on the east bank of the Athabasca River.
The company holds a 21.3% limited partnership interest in Fort Hills Energy L.P. (the Fort Hills Partnership), which owns the Fort Hills mine. The other limited partners are Suncor Energy Inc. (Suncor) with a 54.1% interest and Total E&P Canada Ltd. (Total) with a 24.6% interest. Relations among the partners are governed by a limited partnership agreement and a unanimous shareholder agreement pertaining to the governance of Fort Hills Energy Corporation, the general partner of the Fort Hills Partnership, in which the limited partners hold pro rata share interests.
Suncor Energy Operating Inc., an affiliate of Suncor, acts as contract operator of Fort Hills pursuant to an operating services contract. The contract operator has exclusive authority to operate Fort Hills, subject to the oversight of a management committee on which each of the shareholders of the general partner are represented. Certain fundamental decisions concerning Fort Hills require super-majority, and in certain cases, unanimous, approval of the management committee. Subject to certain exceptions, limited partners have a right of first refusal in the event of a transfer of another’s limited partnership interest.
The Fort Hills partners purchase all bitumen produced at Fort Hills from the Fort Hills Partnership in proportion to their ownership interest. To meet pipeline density and viscosity requirements Teck, along with the other Fort Hills partners, is required to purchase diluent to blend with the bitumen. The East Tank Farm blends bitumen with diluent to meet pipeline density and viscosity specifications. To facilitate this, and the transportation of blended bitumen to the market hub at Hardisty, the Fort Hills partners have jointly entered into long-term take-or-pay agreements with regional pipelines, terminals and blend facilities. These agreements relate to:
Hot bitumen transportation from Fort Hills to the East Tank Farm on the Northern Courier Pipeline, operated by Suncor Energy Inc. (Suncor);
Diluent transportation from Edmonton to the East Tank Farm on the Norlite Pipeline, operated by Enbridge Inc. (Enbridge);
Use of diluent and bitumen blending facility at the East Tank Farm, operated by the Thebacha Limited Partnership (Thebacha) partnership, a joint venture between Suncor and regional First Nations (Fort McKay First Nation and Mikisew Cree First Nation); and
Blended bitumen transportation from the East Tank Farm to the market hub at Hardisty, Alberta, on the Wood Buffalo Pipeline, operated by Enbridge.
The company has separately contracted a 425,000-barrel working-capacity storage tank for its share of blended bitumen at Hardisty, Alberta, and 100,000 barrels of diluent storage capacity at Fort Saskatchewan, Alberta.
The company sells its blended bitumen to customers at Hardisty and on the U.S. Gulf Coast. The company’s tankage at Hardisty is connected to major export pipelines, including the Enbridge common carrier pipeline, the Keystone pipeline and the Express crude oil pipeline. The company’s tankage is also connected to a large unit train loading facility. The company has entered into a long-term take-or-pay agreement on the Keystone pipeline to ship 10,000 barrels per day of blended bitumen to its customers on the U.S. Gulf Coast. The company has also entered into an agreement to ship an additional 12,000 barrels per day on the proposed Trans Mountain pipeline expansion to customers in Burnaby, B.C.
The company’s 21.3% share of bitumen production from Fort Hills was 19,935 barrels per day in 2021.
Other Energy Projects
Frontier Project
The company wholly owns the Frontier oil sands project, which consists of approximately 56,000 hectares of oil sands leases and is located on the west side of the Athabasca River. In February 2020, the company withdrew the Frontier project from the regulatory review process. Since withdrawing from the regulatory review process, spending on the Frontier project has been limited to that required to maintain leases and regulatory approvals, as well as fulfilling its commitments under agreements, including those with local Indigenous communities.
Lease 421 Area
The company owns a 50% interest in the Lease 421 Area — oil sands leases 7406120421, 7408070022, 7408070023 and 7407010899 — east of the Athabasca River (approximately 17,900 hectares on a 100% basis). As of December 31, 2021, a total of 89 core holes have been completed in the Lease 421 Area.
History
The company was founded in 1913. It was formerly known as Teck Cominco Limited and changed its name to Teck Resources Limited in 2009.
