PURPOSE
DRIVEN
2021
ANNUAL
REPORT
OUR PURPOSE
To provide the essential resources
the world is counting on to make life
better while caring for the people,
communities and land that we love.
IN THIS REPORT
1
3
4
6
9
12
17
21
26
29
29
30
71
137
138
139
Our Business
2021 Highlights
Letter from the Chair
Letter from the CEO
Management’s Discussion and Analysis
Copper
Zinc
Steelmaking Coal
Energy
RACE21TM
Exploration & Geoscience
Financial Overview
Consolidated Financial Statements
Board of Directors
Off icers
Corporate Information
On the cover: Raúl Fuenzalida Castillo, Control Room Supervisor at Quebrada
Blanca Phase 2 in northern Chile. Photo taken with all necessary COVID-19
protocols in place to ensure health and safety.
Our Business
Teck is a diversified resource company committed to responsible mining and
mineral development with business units focused on copper, zinc, steelmaking
coal, and energy. Headquartered in Vancouver, British Columbia (B.C.), Canada,
we own or have interests in 10 operating mines, a large metallurgical complex,
and several major development projects in the Americas. We have expertise
across a wide range of activities related to exploration, development, mining
and minerals processing, including smelting and refining, health and safety,
environmental protection, materials stewardship, recycling and research.
Our corporate strategy is focused on exploring for, developing, acquiring and
operating world-class, long-life assets in stable jurisdictions that operate through
multiple price cycles. We maximize productivity and efficiency at our existing
operations, maintain a strong balance sheet, and are nimble in recognizing and
acting on opportunities. The pursuit of sustainability guides our approach to
business, and we recognize that our success depends on our ability to ensure safe
workplaces, collaborative community relationships and a healthy environment.
Mineral reserve and resource estimates for our properties are disclosed in our most recent Annual Information Form, which is available on our website at www.teck.com,
under Teck’s profile at www.sedar.com (SEDAR), and on the EDGAR section of the United States Securities and Exchange Commission (SEC) website at www.sec.gov.
Forward-Looking Statements
This annual report contains forward-looking statements. Please refer to the “Cautionary Statement on Forward-Looking Statements” on page 68.
All dollar amounts expressed throughout this report are in Canadian dollars unless otherwise noted.
Our Business
1
1
Operations &
Major Projects:
Copper
1
Highland Valley Copper
Antamina
Quebrada Blanca
Carmen de Andacollo
Quebrada Blanca Phase 2
2
3
4
5
1
1
1
2
Operations &
Major Projects:
Zinc
1
Red Dog
Trail Operations
2
Steelmaking Coal
1
Steelmaking Coal Mines in B.C.
· Fording River
· Greenhills
· Line Creek
· Elkview
Energy
1
Fort Hills
Producing Operation
Development Project
Copper
1
Highland Valley Copper
Antamina
Quebrada Blanca
Carmen de Andacollo
Quebrada Blanca Phase 2
2
3
4
5
Zinc
1
Red Dog
Trail Operations
2
Steelmaking Coal
1
Copper
Steelmaking Coal Mines in B.C.
· Fording River
· Greenhills
· Line Creek
· Elkview
We are a significant copper producer in the Americas, with four operating mines in
Canada, Chile and Peru, and copper development projects in North and South America.
Energy
1
Zinc
Fort Hills
Producing Operation
Development Project
We are one of the world’s largest producers of mined zinc, with production from an
operating mine in Alaska and from the Antamina copper mine in Peru, which has significant
zinc co-product production. We also own one of the world’s largest fully integrated zinc
and lead smelting and refining facilities in British Columbia, Canada.
2
3
5
4
Steelmaking Coal
We are the world’s second-largest seaborne exporter of steelmaking coal, with four
low-carbon intensity1 operations in British Columbia, Canada that have significant
high-quality steelmaking coal reserves.
Energy
We have an interest in a producing oil sands mine in Alberta, Canada, which produces
a low-carbon intensity2 product.
1 Carbon intensity in this context refers to the GHG emissions per tonne of product produced (e.g., GHG per tonne of steelmaking coal).
2 Carbon intensity in this context refers to the GHG emissions per barrel of product produced (e.g., GHG per barrel of partially upgraded bitumen).
2
Teck 2021 Annual Report | Purpose Driven
2021 Highlights
Safety
• All sites continued to implement comprehensive measures to protect employee and community health through
the COVID-19 pandemic, including rapid screening and promoting employee vaccination
• High-Potential Injury Frequency was the lowest ever, down 38% compared to 2020
Financial
• Record revenue of $13.5 billion, an increase of 1.5 times last year
• Record adjusted profit attributable to shareholders1 of $3.1 billion or $5.74 per share for the year; profit attributable
to shareholders of $2.9 billion, or $5.39 per share
• Record adjusted EBITDA1 of $6.6 billion was more than 2.5 times higher than last year; profit before tax of $4.5 billion in 2021
• Cash flows from operations of $4.7 billion were generated in the year, increasing our cash balance to $1.4 billion as at
December 31, 2021; no amounts were drawn on our US$4 billion committed credit facility
• On February 23, 2022, we declared a $0.625 per share dividend, increased our annual base dividend to $0.50 per share
and authorized up to $100 million of share buybacks
• Our copper business unit gross profit of $1.7 billion was more than double 2020, due to a substantially higher average
realized copper price of US$4.27 per pound for the year
• Our zinc business unit gross profit increased by 32% compared to 2020, supported by an average realized zinc price
of US$1.39 per pound for the year
• Realized steelmaking coal prices of US$209 per tonne drove a $2.5 billion increase in the gross profit in our
steelmaking coal business unit
Operating and Development
• Reached collective agreements with unions at our Antamina, Quebrada Blanca, Fording River and Elkview operations,
and subsequent to year end, at our Highland Valley Copper Operations
• Overall progress on our Quebrada Blanca Phase 2 (QB2) project has reached 77% completion, with first production
expected in the second half of 2022
• Completed construction of our Neptune terminal upgrades, with the new outbound system successfully loading three
Newcastlemax Capesize vessels — the largest vessels ever berthed at Neptune
Sustainability
• Converted our US$4 billion committed credit facility into a sustainability-linked facility and extended its maturity to
October 2026
• Ranked first in the S&P Global SAM Corporate Sustainability Assessment Metals and Mining sector, and named to the
Dow Jones Sustainability World Index for the 12th consecutive year
• MSCI upgraded Teck’s environmental, social and governance (ESG) rating to AA from A, placing Teck in the top 10%
of companies in the Metals and Mining Non-Precious Metals sub-industry
• Named to the 2022 Bloomberg Gender-Equality Index for the fifth straight year
Revenue
$13.5 billion
$8.9 billion
$11.9 billion
$12.6 billion
$11.9 billion
2021
2020
2019
2018
2017
Profit Attributable
to Shareholders
Adjusted Profit Attributable
to Shareholders1
Cash Flow from
Operations
$2.9 billion
$(0.9) billion
$(0.6) billion
$3.1 billion
$2.5 billion
$3.1 billion
$0.6 billion
$1.7 billion
$2.4 billion
$2.5 billion
$4.7 billion
$1.6 billion
$3.5 billion
$4.4 billion
$5.0 billion
1 This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section of the attached Management’s Discussion
and Analysis for further information.
2021 Highlights
3
Letter from the Chair
Sheila A. Murray
Chair of the Board
To the Shareholders
Looking back on 2021, I feel a great sense of pride in what the Teck team was able to accomplish in the face of a truly
unprecedented year. They overcame significant challenges while working to ensure the health and safety of our people,
advance the growth of the business, and deliver essential products to the world.
On behalf of the Board of Directors, I want to offer my sincere gratitude to all Teck employees, who once again
demonstrated remarkable compassion, strength and dedication. Together, you met the challenges of COVID-19 without
hesitation, protecting each other and our communities through your unwavering support of health and safety. You were
among the first to offer help during the tragic wildfire and flooding events in British Columbia. And you did all this while
moving our business forward safely and with purpose, clearly demonstrating the values that are embedded in our company:
responsibility, courage, respect, inclusiveness, drive and humility. Thank you also to our Board for the strong leadership and
to our former member, Eiichi Fukuda, who departed in 2021.
Because of the incredible resilience of our people and business, we were able to deliver record results in 2021. This included
record revenues, with the highest-ever quarterly adjusted EBITDA, adjusted profit attributable to shareholders and profit
before tax. We ended the year with $2.9 billion profit attributable to shareholders and $3.1 billion adjusted profit attributable
to shareholders.1
Moving forward, we are committed to responsibly providing the resources needed to improve people’s quality of life and
enable the low-carbon transition. We know that the clean energy technologies needed to meet the world’s climate action
goals will require more of the materials Teck produces. For example, every megawatt of solar power generation requires
5 tonnes of copper and up to 45 tonnes of steel, which in turn requires more than 30 tonnes of steelmaking coal to produce.
And every electric car requires up to four times more copper than a gas car.
Our strategy is focused on positioning Teck to responsibly help meet this growing global demand while delivering value for
shareholders. This includes rebalancing our portfolio towards copper through completion of the Quebrada Blanca Phase 2
(QB2) project in Chile, which is expected to begin production in the second half of 2022. QB2 will double Teck’s consolidated
copper production at a time when the copper demand outlook is very strong. We are also continuing to focus on further
strengthening our low-carbon steelmaking coal business, having completed the Neptune Terminal upgrades in 2021. These
upgrades will secure a lower-cost, more resilient and flexible supply chain for the long term.
At the same time, we are focused on continuing to achieve industry-leading environmental, social and governance (ESG)
performance. As one of the world’s most sustainable mining companies, we are always working to improve, setting ambitious
long-term sustainability goals, including becoming a carbon-neutral operator by 2050.
1 This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section of the attached Management’s Discussion
and Analysis for further information.
4
Teck 2021 Annual Report | Purpose Driven
Teck was recognized for our progress in 2021, including being named to the S&P Dow Jones Sustainability World Index
for the 12th consecutive year and being recognized as the #1 company in the Metals and Mining sector, and being named
as one of the Global 100 Most Sustainable Corporations. This recognition is encouraging, but we know we need to
continue working hard to meet the expectations of our stakeholders.
In closing, I would also like to thank our shareholders, customers, suppliers, governments, Indigenous Peoples and the
communities where we operate. We recognize the importance of these relationships and I want you to know that the
Teck Board remains strongly focused on ensuring we generate long-term value where we operate and beyond, while
supplying the metals and minerals needed to build a better world.
Sheila A. Murray
Chair of the Board
Vancouver, B.C., Canada
February 23, 2022
Letter from the Chair
5
Letter from the CEO
Donald R. Lindsay
President and Chief Executive Officer
To the Shareholders
2021 was a year of unprecedented challenges that tested us, highlighting the strength of our company and our people.
Through heat waves, wildfires, floods, freezing and the ongoing global pandemic, our people demonstrated incredible
resilience, meeting these challenges head-on and ensuring we continue to responsibly provide the essential resources
the world needs to sustain global population growth and the low-carbon transition to a cleaner future. In this regard, we
significantly advanced our strategy to rebalance our portfolio towards copper by progressing Teck’s flagship QB2 project —
a long-life, low-cost operation that will double our consolidated copper production and position Teck as a major
global supplier.
Further, our team worked through all of these challenges to achieve tremendous results — delivering record financial
performance that created value for shareholders while maintaining focus on our long-term business strategy. This included
completing our Neptune port upgrade to strengthen our steelmaking coal supply chain and once again delivering
industry-leading sustainability performance.
Health and Safety Performance
Everything we do begins with our long-standing commitment to health and safety. In 2021, our High-Potential Incident
Frequency was the lowest ever, down 38% compared to 2020. Across our operations we have continued to implement
comprehensive COVID-19 prevention measures to allow us to keep operating responsibly, maintaining jobs and helping
to protect our communities, including pre-work rapid screening and vaccine promotion programs. We were saddened by
a fatality that took place at our Red Dog Operations in January 2021. In response, we carried out an in-depth investigation
to identify the root causes and took steps to prevent a reoccurrence.
Financial Performance
Driven by the very strong commodity price environment, we closed out 2021 by setting numerous financial performance
records, including our highest-ever quarterly adjusted EBITDA and adjusted profit attributable to shareholders.
Overall for 2021, revenues were a record $13.5 billion and profit attributable to shareholders was $2.9 billion, or $5.39 per
share, and adjusted profit attributable to shareholders1 was a record $3.1 billion, or $5.74 per share. We ended the year
with $1.4 billion of cash and $6.5 billion of liquidity, and our balance sheet remains strong. We also returned $106 million
in cash to shareholders through our regular annual base dividend.
Furthermore, to more fully integrate our performance against our sustainability goals with our financial plan, we announced
a US$4.0 billion sustainability-linked revolving credit facility.
1 This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section of the attached Management’s Discussion
and Analysis for further information.
6
Teck 2021 Annual Report | Purpose Driven
Advancing Copper Growth
Copper is critical for the low-carbon transition, as it’s essential for the green energy systems and technologies that will
help decarbonize society. We know the world is going to need significant copper, with demand expected to double by
2050, and Teck is in an excellent position to help meet that demand.
In 2021, we continued to advance our strategy of rebalancing our portfolio towards copper. This includes progressing
construction of our flagship QB2 project in Chile to 77% completion. The QB2 project is one of the world’s largest
undeveloped copper resources and we are on track for completion, with first production expected in the second half
of 2022. We also progressed consultation planning for our proposed HVC 2040 project to extend the life of our
Highland Valley Copper Operations, the advancement of which will be dependent on a number of factors, including
the regulatory environment.
We also continued to advance our robust pipeline of copper growth options, which include the Zafranal, San Nicolás,
Galore Creek, Mesaba and Schaft Creek projects.
Strengthening Steelmaking Coal Logistics and Productivity
Teck is the world’s second-largest seaborne exporter of steelmaking coal, a key resource with a strong demand profile
due to expected increased urbanization and the low-carbon transition. Global projections show 2.5 billion people will
move to urban populations by 2050, sustaining strong demand for our high-quality steelmaking coal. With about 72%
of global steel production relying on steelmaking coal, we expect demand to remain strong.
In 2021, we continued to strengthen our low-carbon steelmaking coal business, allowing us to take advantage of robust
prices. We strengthened our logistics by completing upgrades at Neptune Bulk Terminals, driving resiliency across our
steelmaking coal supply chain, with Neptune exceeding design capacity towards the end of the year. In addition, we
advanced engagement for our Fording River Extension Project, which is needed to extend the lifespan of Fording River
Operations and maintain the jobs and economic benefits it generates.
Implementing the RACE21™ Business Transformation
We continued to implement a broad range of initiatives under RACE21™, Teck’s business transformation program that
focuses on harnessing innovation and technology to strengthen productivity, health and safety, and sustainability.
Our teams implemented new digital planning applications to ensure alignment between our sites and logistics teams for
our steelmaking coal business, supporting cost reduction and increasing throughput to help optimize delivery to our
customers. Overall, the RACE21™ program was very successful, and we will report on our results later in 2022 as well as
our plans for the ongoing digital transformation to drive new value.
Sustainability Performance
In 2021, we marked 20 years of sustainability reporting by continuing to advance our shorter- and longer-term targets
under our strategic sustainability themes, with a focus on decarbonizing our business and reaching our goal of being a
net-zero emissions operator by 2050. This included finalizing an agreement with Oldendorff Carriers to employ energy-
efficient bulk carriers for shipments of steelmaking coal from Vancouver to international destinations, reducing emissions
in the steelmaking coal supply chain. We also announced an agreement with Caterpillar to develop, pilot and deploy
30 zero-emission haul trucks at our mining operations beginning in 2027.
We continued to make significant progress on our Elk Valley Water Quality Plan (EVWQP), doubling capacity of our second
water treatment facility, completing our third facility and advancing construction of our fourth facility. After completion of
this fourth facility later in 2022, Teck will have capacity to treat up to 77.5 million litres of water per day, a fourfold increase
from our treatment capacity in 2020. These facilities are achieving near-complete removal of selenium and nitrate, and
Letter from the CEO
7
Letter from the CEO
with this additional capacity we expect to achieve the primary goal of the EVWQP: stabilizing and reducing the selenium
trend in the Elk Valley. We also continued work to rehabilitate fish habitat in the upper Fording River and saw a positive
trend in the population of Westslope Cutthroat Trout in 2021.
We continued to support those who have been deeply impacted by the ongoing pandemic, through a COVID-19 response
fund, while also providing financial support towards global vaccination efforts. We were proud to provide donations for
wildfire and flood relief in British Columbia and that our team was among the first to offer help to support local communities
through these events. And we made significant progress through our Copper & Health program to help make communities
safer. In 2021, we announced funding for the installation of antimicrobial copper on high-touch surfaces to reduce the
risk of infection in hospitals, in post-secondary institutions and on transit.
We were again recognized for our sustainability efforts, being named to the S&P Dow Jones Sustainability World Index for
the 12th consecutive year and recognized as the #1 company in the Metals and Mining sector. We were also recognized
in January as one of the 2021 Global 100 Most Sustainable Corporations by Corporate Knights and the top-ranked mining
company. We received a ranking upgrade to AA with MSCI, and we were also named again to the Global 100 Most Sustainable
Corporations list by Corporate Knights in early 2022. While it’s very encouraging to be recognized for our efforts, we are
committed to constantly improving our performance. We are on the right track — and there is much more to do.
Our People
Above all, I want to thank the entire Teck team for rising to the challenges of the year and persevering through a volatile
period that saw unprecedented disruptions to our business and ongoing pressure from the COVID-19 pandemic. In 2021,
we gave heartfelt goodbyes to several members of our senior management team including Ron Millos, former Senior Vice
President, Finance and Chief Financial Officer, as well as Vice Presidents Lawrence Watkins, Keith Stein and Scott Wilson.
We were pleased to welcome to our team Sarah Hughes, Vice President, Assurance and Advisory, and Brianne Metzger-Doran,
Vice President, Health and Safety.
Purpose Driven
We live in a purpose-driven era, guided by trust, transparency, balance and innovation. In 2021, we put into words for the
first time the purpose that has always driven Teck: To provide the essential resources the world is counting on to make life
better while caring for the people, communities and land that we love. This purpose will continue to guide us as we work to
responsibly contribute to building a better world.
As we look ahead, we know that 2022 will be a truly transformative year for Teck as we move forward to become a major
global copper supplier with first production from QB2; realize the full benefits of our enhanced steelmaking coal logistics
chain from the Neptune Terminal upgrades; and continue to enhance our sustainability and climate performance, all while
providing essential resources for a better, cleaner world.
Donald R. Lindsay
President and Chief Executive Officer
Vancouver, B.C., Canada
February 23, 2022
8
Teck 2021 Annual Report | Purpose Driven
MANAGEMENT’S
DISCUSSION AND
ANALYSIS
Management’s Discussion and Analysis
9
Management’s Discussion
and Analysis
Our business is exploring for, acquiring, developing and producing natural resources. We are organized into business units
focused on copper, zinc, steelmaking coal, and energy. These are supported by our corporate offices, which manage our
corporate growth initiatives and provide marketing, administrative, technical, health, safety, environment, community,
financial and other services.
Through our interests in mining and processing operations in Canada, the United States (U.S.), Chile and Peru, we are
an important producer of copper, one of the world’s largest producers of mined zinc and the world’s second-largest
seaborne exporter of steelmaking coal, and we have an interest in a producing oil sands mine. We also produce lead, silver,
molybdenum and various specialty and other metals, chemicals and fertilizers. We actively explore for copper, zinc and
gold, and we hold interests in oil sands assets in the Athabasca region of Alberta, Canada.
This Management’s Discussion and Analysis of our results of operations is prepared as at February 23, 2022 and should
be read in conjunction with our audited annual consolidated financial statements for the year ended December 31, 2021.
Unless the context otherwise dictates, a reference to Teck, Teck Resources, the Company, us, we or our refers to Teck
Resources Limited and its subsidiaries, including Teck Metals Ltd. and Teck Coal Partnership. All dollar amounts are in
Canadian dollars, unless otherwise stated, and are based on our 2021 audited annual consolidated financial statements
that are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB). In addition, we use certain financial measures, which are identified throughout the
Management’s Discussion and Analysis in this report, that are not measures recognized under IFRS and do not have a
standardized meaning prescribed by IFRS. See “Use of Non-GAAP Financial Measures and Ratios” on page 57 for an
explanation of these financial measures and reconciliation to the most directly comparable financial measures under IFRS.
This Management’s Discussion and Analysis contains certain forward-looking information and forward-looking statements.
You should review the cautionary statement on forward-looking statements under the heading “Cautionary Statement
on Forward-Looking Statements” on page 68, which forms part of this Management’s Discussion and Analysis, as well as
the risk factors discussed in our most recent Annual Information Form.
Additional information about us, including our most recent Annual Information Form, is available on our website at
www.teck.com, under Teck’s profile at www.sedar.com (SEDAR), and on the EDGAR section of the United States Securities
and Exchange Commission (SEC) website at www.sec.gov.
Business Unit Results
The following table shows a summary of our production of our major commodities for the last five years and estimated
production for 2022.
10 Teck 2021 Annual Report | Purpose Driven
Five-Year Production Record and Our Estimated Production in 2022
Principal Products
2017
2018
2019
2020
2021
estimate3
2022
Copper1
thousand tonnes
287
294
297
276
287
282
Zinc
Contained in concentrate1
Refined
Steelmaking coal
Bitumen1,2
thousand tonnes
thousand tonnes
million tonnes
million barrels
659
310
26.6
–
705
303
26.2
6.8
640
287
25.7
12.3
587
305
21.1
8.4
607
279
24.6
7.3
648
277
25.0
13.2
Notes:
1. We include 100% of production and sales from our Quebrada Blanca and Carmen de Andacollo mines in our production and sales volumes, even
though we do not own 100% of these operations, because we fully consolidate their results in our financial statements. We include 22.5% and
21.3% of production and sales from Antamina and Fort Hills, respectively, representing our proportionate ownership interest in these operations.
Zinc contained in concentrate production includes co-product zinc production from our 22.5% interest in Antamina.
2. Fort Hills bitumen results for the year ended December 31, 2018 are included from June 1, 2018.
3. Production estimates for 2022 represent the midpoint of our production guidance range. The 2022 copper production guidance excludes
Quebrada Blanca concentrate production.
Average commodity prices and exchange rates for the past three years, which are key drivers of our profit, are
summarized in the following table.
Copper (LME cash — $/pound)
Zinc (LME cash — $/pound)
Steelmaking coal (realized — $/tonne)
Blended bitumen (realized — $/barrel)
Exchange rate (Bank of Canada)
US$1 = CAD$
CAD$1 = US$
US$
2021
% chg
2020
% chg
2019
4.23
1.36
209
58.14
1.25
0.8
+51%
+32%
+85%
+108%
-7%
+7%
2.80
1.03
113
27.99
1.34
0.75
+3%
-11%
-31%
-38%
+1%
0%
2.72
1.16
164
45.20
1.33
0.75
Our revenue, gross profit and gross profit before depreciation and amortization, by business unit for the past three
years are summarized in the following table.
Revenue
Gross Profit (Loss)
Gross Profit (Loss) Before
Depreciation and Amortization1
($ in millions)
2021
2020
2019
2021
2020
2019
2021
2020
2019
Copper
Zinc
Steelmaking coal
Energy
Total
$ 3,452 $ 2,419 $ 2,469 $ 1,741 $ 859 $
2,968
2,700
523
617 $ 2,126 $ 1,242 $ 1,080
831
601
815
3,063
6,251
715
3,375
5,522
454
975
688
2,785
(133)
277
2,112
(326)
10
1,009
2,904
(223)
144
918
3,657
(37)
$ 13,481 $ 8,948 $ 11,934 $ 5,081 $ 1,333 $ 3,340 $ 6,664 $ 2,843 $ 4,959
Note:
1. This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
Management’s Discussion and Analysis
11
Copper
In 2021, we produced 287,300 tonnes of copper from our Highland Valley Copper Operations in B.C., our 22.5% interest
in Antamina in Peru, and our Carmen de Andacollo and Quebrada Blanca operations in Chile.
In 2021, our copper business unit accounted for 26% of our revenue and 34% of our gross profit.
Revenue
Gross Profit (Loss)
Gross Profit (Loss) Before
Depreciation and Amortization1
($ in millions)
2021
2020
2019
2021
2020
2019
2021
2020
2019
Highland Valley
Copper
Antamina
Carmen de
Andacollo
Quebrada Blanca
$ 1,440 $
1,383
993 $ 1,005 $
868
900
721 $
828
331 $
414
196 $
457
883 $
992
476 $
566
395
614
493
136
442
116
394
170
153
39
95
19
23
(59)
209
42
170
30
89
(18)
Total
$ 3,452 $ 2,419 $ 2,469 $ 1,741 $
859 $
617 $ 2,126 $
1,242 $ 1,080
Note:
1. This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
Production1
Sales1
(thousand tonnes)
2021
2020
2019
2021
2020
2019
Highland Valley Copper
Antamina
Carmen de Andacollo
Quebrada Blanca
Total
131
100
45
11
287
119
86
58
13
276
121
101
54
21
297
124
99
45
12
280
119
85
59
14
277
124
101
55
21
301
Note:
1. We include 100% of production and sales from our Quebrada Blanca and Carmen de Andacollo mines in our production and sales volumes,
even though we do not own 100% of these operations, because we fully consolidate their results in our financial statements. We include
22.5% of production and sales from Antamina, representing our proportionate ownership interest in the operation.
12 Teck 2021 Annual Report | Purpose Driven
Operations
Highland Valley Copper
Our Highland Valley Copper Operations is located in south-central B.C. Gross profit was $721 million in 2021, compared
with $331 million in 2020 and $196 million in 2019. The increase was primarily the result of substantially higher copper
prices, partially offset by strengthening of the Canadian dollar and higher unit operating costs.
Highland Valley Copper’s 2021 copper production was 130,800 tonnes, compared to 119,300 tonnes in 2020. The increase in
2021 production was primarily a result of higher copper grades, partially offset by an 11% decrease in mill throughput largely
due to processing harder ores, as expected in the mine plan. Mill throughput was also impacted by the four-day temporary
suspension in response to wildfire activity in the area and the subsequent ramp-up. Molybdenum production was 67% lower in
2021 at 1.1 million pounds, compared to 3.3 million pounds in 2020, primarily due to lower grades, as expected in the mine plan.
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.
We continue 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 is undergoing an environmental
assessment under the B.C. Environmental Assessment Act.
Antamina
We have a 22.5% share interest in Antamina, a copper-zinc mine in Peru. The other shareholders are BHP (33.75%),
Glencore (33.75%) and Mitsubishi Corporation (10%). Our share of gross profit in 2021 was $828 million, compared with
$414 million in 2020 and $457 million in 2019. Our share of gross profit in 2021 increased from 2020, primarily due to
higher copper and zinc prices. Production and sales volumes in 2020 were lower due to the temporary suspension of
operations to support COVID-19 response measures.
On a 100% basis, Antamina’s copper production in 2021 was 445,300 tonnes, compared to 380,700 tonnes in 2020.
Zinc production was 462,200 tonnes in 2021, an increase from 427,800 tonnes of production in 2020. Copper and
zinc production rose in 2021 primarily due to decreased production in 2020 relating to the temporary suspension of
operations to support COVID-19 response measures. In 2021, molybdenum production was 4.9 million pounds,
which was 38% lower than in 2020.
Pursuant to a long-term streaming agreement made in 2015, Teck delivers an equivalent to 22.5% of payable silver
sold by Compañía Minera Antamina S.A. to a subsidiary of Franco-Nevada Corporation (FNC). FNC pays a cash price
of 5% of the spot price at the time of each delivery, in addition to an upfront acquisition price previously paid. In 2021,
approximately 3.8 million ounces of silver were delivered under the agreement. After 86 million ounces of silver have
been delivered under the agreement, the stream will be reduced by one-third. A total of 21.8 million ounces of silver
have been delivered under the agreement from the effective date in 2015 to December 31, 2021.
Our 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. Our share of annual copper production
is expected to be between 90,000 and 95,000 tonnes from 2023 to 2025. Our share of 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. Our share of annual molybdenum production
is expected to be between 3.0 and 4.0 million pounds between 2023 and 2025.
Carmen de Andacollo
We have a 90% interest in the Carmen de Andacollo mine, which is located in the Coquimbo Region of central Chile.
The remaining 10% is owned by Empresa Nacional de Minería (ENAMI), a state-owned Chilean mining company.
Gross profit increased to $153 million in 2021 from $95 million in 2020 and $23 million in 2019. Gross profit increased
in 2021 from 2020, primarily due to higher copper prices partially offset by higher unit operating costs, and lower
production and sales volumes as a result of lower copper grades, as expected in the mine plan.
During the year ended December 31, 2021, as a result of higher market expectations for long-term copper prices,
we recorded a non-cash, pre-tax impairment reversal of $215 million (after-tax $150 million) related to our Carmen
de Andacollo Operation. The economic model for determining the amount of impairment reversal for Carmen de
Management’s Discussion and Analysis
13
Andacollo assumes a long-term copper price of US$3.30 per pound from 2026 onward. A 6% real, post-tax discount
rate was used to discount cash flow projections based on a market-participant weighted average cost of capital.
This impairment reversal is outlined in more detail on page 51.
Carmen de Andacollo produced 43,500 tonnes of copper contained in concentrate in 2021, compared to 55,400 tonnes
in 2020 primarily due to lower copper grades, which declined by 21% as expected in the mine plan. 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. In effect, 100% of gold production from the mine has been sold to
Royal Gold, Inc., who pays a cash price of 15% of the monthly average gold price at the time of each delivery, in addition
to an upfront acquisition price previously paid.
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.
Quebrada Blanca
Quebrada Blanca is located in the Tarapacá Region of northern Chile. We have a 60% indirect interest in Compañía
Minera Quebrada Blanca S.A. (QBSA). A 30% interest is owned indirectly by Sumitomo Metal Mining Co., Ltd. and
Sumitomo Corporation (together referred to as SMM/SC), and 10% is owned by ENAMI. ENAMI’s 10% preference share
interest in QBSA does not require ENAMI to fund capital spending.
Quebrada Blanca Operations
Quebrada Blanca’s gross profit in 2021 was $39 million compared with $19 million in 2020 and a gross loss of $59 million
in 2019. The increased gross profit in 2021 compared with 2020 is primarily a result of higher copper prices partially
offset by higher unit operating costs and lower production and sales volumes as expected.
Quebrada Blanca produced 11,500 tonnes of copper cathode in 2021, compared to 13,400 tonnes in 2020, with the
decrease due to the continued decline of cathode production, as the operation had ceased mining in 2018. Copper
cathode production is now expected to continue through 2023 using existing leach piles and ore that is expected to
be mined in the first half of 2022. We expect cathode production of approximately 10,000 to 11,000 tonnes in 2022,
and 5,000 tonnes in 2023.
Quebrada Blanca concentrate production is expected to commence in the second half of 2022 following commissioning
of the Quebrada Blanca Phase 2 project (QB2), in line with previous guidance. We expect copper in concentrate production
to be between 240,000 and 300,000 tonnes per year for 2023 to 2025 with molybdenum production between 4.0 and
13.0 million pounds per year.
Quebrada Blanca Phase 2
The Quebrada Blanca Phase 2 project is one of the world’s largest undeveloped copper resources. QB2 is expected
to have low operating costs, an initial mine life of 28 years and significant potential for further growth. Teck approved
the QB2 project for full construction in December 2018.
The project has continued to effectively advance construction, with good progress in 2021. Overall project progress
has reached 77% completion and first production is expected in the second half of 2022.
Significant focus remains on managing COVID-19 and the extensive protocols in place to protect the health and
safety of our employees, including robust, effective and proactive vaccination and testing programs across the entire
workforce. Pre-screening and on-site testing have been key to our success in managing case rates at site while
effectively advancing construction.
Certain non-COVID-19 cost pressures, related to weather and subsurface conditions, are currently estimated to require
an additional contingency of up to 5% of our capital estimate of US$5.26 billion, unchanged from our previous guidance.
As recently announced, COVID-19 related capital costs have experienced ongoing pressure as a result of continued
absenteeism and labour inefficiencies related to COVID-19 and contractual concessions have been required to manage
these impacts on contractors. Given our experience with the sudden onset of Omicron, we modified our prior assumptions
and now assume that the impacts of COVID-19 will not end prior to the completion of construction. We are continuing to
actively manage these costs and, to counter the adverse effects associated with construction in this environment, have put
in place a variety of mitigation measures and incentives, many of which are aimed at attracting talent, employee retention
and minimizing absenteeism. Based on our current assumptions, including with respect to exchange rates, we recently
updated our COVID-19 capital cost guidance to US$900 million to US$1.1 billion from our previous estimate of US$600 million.
14 Teck 2021 Annual Report | Purpose Driven
Project development expenditures in 2021 were approximately US$2.06 billion. We expect to spend approximately
CAD$2.2 to CAD$2.5 billion of QB2 development capital on a consolidated basis in 2022, inclusive of COVID-19 capital.
We continue to be pleased with the progress we are making and are excited about building on our construction
successes to date with a focus on delivering to the project’s key milestones.
Quebrada Blanca Mill Expansion
The Quebrada Blanca Mill Expansion (QBME) project progressed in 2021, with a focus on trade-off studies in preparation for
the start of the prefeasibility study. A prefeasibility study commenced in the fourth quarter of 2021 with completion targeted in
the fourth quarter of 2022 to evaluate the addition of a third grinding line for a 50% capacity increase to the Quebrada Blanca
concentrator currently under construction. This configuration is expected to make use of excess capacity in the supporting
infrastructure, reducing capital costs and minimizing project footprint. QBME will be a significant contributor to our near-term
copper growth portfolio with first production targeted for 2026. Resource and geotechnical drilling will also be conducted in
2022 to support the evaluation of further opportunities to develop the vast Quebrada Blanca resource.
Copper Growth Projects
Teck continues to actively advance its industry-leading copper growth portfolio. The approach is driven by balancing growth
and return of capital, value-focused de-risking and the optimization of funding sources. As part of Teck’s copper growth
strategy, within the Project Satellite initiative, Teck, together with our partners, continues to advance five significant base
metals assets containing copper, zinc and nickel. We are meeting project, permitting and commercial milestones in order to
position Teck with various high-quality options to maximize value from copper demand well beyond the ramp-up of QB2 and
the continued operation of our core copper-producing assets. The Project Satellite initiative comprises five assets, namely
Zafranal, San Nicolás, Galore Creek, Mesaba and Schaft Creek, all of which are located in the Americas in jurisdictions that
Teck is familiar with and has experience conducting detailed studies, advancing permitting activities, developing strong
community and stakeholder relationships, and operating mines in a productive, sustainable and safe manner.
Work in 2022 on the Zafranal copper-gold project located in Arequipa Region, Peru, will be focused on completing
public hearings and regulator-led technical reviews of the project’s Social and Environmental Impact Assessment
(SEIA) permit application as well as meeting the project’s community commitments and key stakeholder engagement
activities in the areas of health, capacity building, cultural heritage resource management, and water. The San
Nicolás copper-zinc project located in Zacatecas State, Mexico initiated a feasibility study in the first quarter of 2022
with completion targeted in the fourth quarter of 2023. In addition, work will include submitting an Environmental
Impact Assessment (MIA-R), continuing social and environmental baseline studies, and completing additional
socio-economic studies in support of advancing through permitting and the next investment decision milestone.
Partnering negotiations for San Nicolás are ongoing and first production is targeted for 2026. At the Galore Creek
copper-gold-silver project located in Tahltan Territory within the Golden Triangle of northwest British Columbia, we
and our partner have appointed Fluor to prepare a prefeasibility study. Work in 2022 will continue to advance
prefeasibility field study work, baseline social and environmental field programs, and early permitting activities
targeted for completion in the second half of 2023. At Schaft Creek, located in northwest British Columbia, and
Mesaba, located in northeast Minnesota, we are investing additional resources to progress environmental and social
baseline field studies and focused design and engineering work, including resource modelling, geometallurgical and
geotechnical studies, mining and mineral processing studies, siting studies, and capital and operating cost
estimations, in support of advancing each asset into prefeasibility studies.
In addition to the Project Satellite assets, Teck has a 50% interest in Compañía Minera NuevaUnión S.A., which owns
the Relincho and La Fortuna deposits. Newmont Corporation owns the remaining 50%. In 2021, work focused on
advancing the assessment of optimization opportunities, with select technical and strategic work continuing in 2022.
The 2021 capital and investment for the Satellite assets and NuevaUnión were $39 million. Capital and investment in
2022 for the Satellite assets and NuevaUnión are expected to be $100 million.
Markets
Copper prices on the London Metal Exchange (LME) averaged US$4.23 per pound in 2021, up from an average of
US$2.80 per pound in 2020.
Copper stocks on the LME fell by 17.6% to 88,950 tonnes in 2021, and copper stocks on the Shanghai Futures Exchange
(SHFE) fell by 56.0% to 38,180 tonnes, while COMEX warehouse stocks fell 23.2% to 51,525 tonnes. Combined exchange
Management’s Discussion and Analysis
15
stocks decreased by 83,040 tonnes during 2021 and ended the year at 178,655 tonnes. Exchange stocks ended the year
at 13-year lows, reaching levels last seen in 2008. Total reported global stocks, including producer, consumer, merchant
and terminal stocks, stood at an estimated 5.4 days of global consumption versus the 25-year average of 17 days.
In 2021, global copper mine production increased 2.2% according to Wood Mackenzie, a commodity research
consultancy, with total production estimated at 21.5 million tonnes. Global mine production has been relatively flat
since 2018. Wood Mackenzie is forecasting a 3.7% increase in global mine production in 2022 to 22.3 million tonnes.
Chinese imports of copper concentrates increased 8% in 2021 to reach over 6.0 million tonnes of contained copper.
Copper scrap availability increased in 2021 due to stronger prices. Scrap and unrefined copper imports into China,
including blister and anode, were up 30% year over year to December 2021 following China’s revision of import
classification. The increase in scrap imports in 2021 was offset by a decline in refined copper cathode imports, which
were down 26% over 2020. Net contained copper unit imports were down 1.5% from record 2020 levels.
Wood Mackenzie estimates that global refined copper production grew 3.0% in 2021, below the 3.9% increase in global
copper cathode demand. They are projecting that refined production will increase 1.2% in 2022, reaching 25.0 million
tonnes. Fundamentals for copper are expected to continue to improve in the coming years as global stimulus spending
by governments continues, and as governments and corporations continue to build out their exposure to the green
economy through increased electrification and reductions to carbon emissions, requiring additional copper units.
Wood Mackenzie is forecasting global copper metal demand will increase by 2.6% in 2022, reaching 25.1 million tonnes,
suggesting the refined copper market will be in deficit in 2022.
Copper Price and LME Inventory
Source: LME
Global Demand for Copper
Source: Wood Mackenzie
Global Copper Inventories
Source: ICSG, LME, COMEX, SHFE
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
Price
2016
2017
2018
2019
2020
2021
700
600
500
400
300
200
100
0
Tonnes
25
20
15
10
5
35
30
25
20
15
10
5
2001
2005
2009
2013
2017
2021
0
0
Tonnes Days
2016
2017
2018
2019
2020 2021
1,600
1,400
1,200
1,000
800
600
400
200
0
Tonnes
LME inventory (tonnes in thousands)
Copper price (US$ per pound)
Rest of the world (tonnes in millions)
China (tonnes in millions)
Inventories (tonnes in thousands)
Days of global consumption
25-year average days inventory
Outlook
We expect 2022 copper production from existing operations to be in the range of 273,000 to 290,000 tonnes,
with production similar to 2021 production levels. This excludes Quebrada Blanca concentrate, which is expected
to add substantially to our overall copper production following first production in the second half of 2022.
In 2022, we expect our copper total cash unit costs1 to be in the range of US$1.85 to US$1.95 per pound before cash
margins for by-products. We continue to experience inflationary cost pressures, notably in diesel price, mill steel and
replacement parts, driven largely by price increases for underlying commodities such as steel, crude oil and natural
gas. In addition, greater profitability drives an increase in some site costs, including workers’ participation and royalty
expenses at Antamina. Copper net cash unit costs1 in 2022 are expected to be in the range of US$1.40 to US$1.50 per
pound after cash margins for by-products, based on current production plans, by-product prices and exchange rates.
We expect copper production to be in the range of 515,000 to 615,000 tonnes per year from 2023 to 2025, including
Quebrada Blanca concentrate production.
1 This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
16 Teck 2021 Annual Report | Purpose Driven
Zinc
We are one of the world’s largest producers of mined zinc, primarily from our Red Dog Operations in Alaska, and the
Antamina copper mine in northern Peru, which has significant zinc co-product production. Our metallurgical complex
in Trail, B.C. is one of the world’s largest integrated zinc and lead smelting and refining operations. In 2021, we
produced 607,400 tonnes of zinc in concentrate, while our Trail Operations produced 279,000 tonnes of refined zinc.
In 2021, our zinc business unit accounted for 23% of revenue and 14% of our gross profit.
Revenue
Gross Profit (Loss)
Gross Profit (Loss) Before
Depreciation and Amortization1
($ in millions)
2021
2020
2019
2021
2020
2019
2021
2020
2019
Red Dog
Trail Operations
Pend Oreille
Other
Intra-segment
$ 1,567 $ 1,394 $ 1,594 $
1,761
1,829
1,997
–
10
(511)
–
9
56
8
(464)
(519)
678 $
(2)
–
12
–
513 $
(23)
–
33
–
696 $
(86)
(7)
(2)
–
822 $
84
–
12
–
717 $ 837
65
–
33
–
–
(4)
(2)
–
Total
$ 3,063 $ 2,700 $ 2,968 $ 688 $
523 $
601 $
918 $
815 $
831
Note:
1. This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
(thousand tonnes)
2021
2020
2019
2021
2020
2019
Production
Sales
Refined zinc
Trail Operations
Contained
in concentrate
Red Dog
Antamina1
Pend Oreille
Total
279
305
287
281
307
284
503
104
–
607
491
96
–
587
553
68
19
640
446
103
–
549
551
95
–
646
561
68
20
649
Note:
1. Co-product zinc production from our 22.5% interest in Antamina.
Management’s Discussion and Analysis
17
Operations
Red Dog
Our Red Dog Operations, located in northwest Alaska, is one of the world’s largest zinc mines. Gross profit in 2021 was
$678 million compared with $513 million in 2020 and $696 million in 2019. The increase in gross profit in 2021 compared
with 2020 was primarily due to higher zinc prices that were partially offset by lower sales volumes, and by higher royalty
costs, which are tied to increased profitability at Red Dog.
In 2021, zinc production at Red Dog increased to 503,400 tonnes, compared to 490,700 tonnes produced in 2020,
primarily due to higher mill throughput, supported by continuous optimization of mill performance, including RACE21™
advanced process control improvements. In 2020, operations were impacted by maintenance challenges as well as
lower grades due to mine sequencing changes, as a result of site water volumes. Red Dog continues to optimize water
management to minimize potential constraints on future production. Lead production in 2021 of 97,400 tonnes was
similar to 2020 production at 97,500 tonnes.
Red Dog’s location exposes the operation to severe weather and winter ice conditions, which can significantly affect
production, sales volumes and operating costs. In addition, the mine’s bulk supply deliveries and all concentrate
shipments occur during a short ocean shipping season that normally runs from early July to late October. This short
shipping season means that Red Dog’s sales volumes are usually higher in the last six months of the year, resulting in
significant variability in its quarterly profit, depending on metal prices.
The 2021 Red Dog concentrate shipping season commenced on July 19, 2021, one of the latest starts in the last decade
following delays due to weather and ice conditions, and was completed successfully on October 30, 2021. As a result
of the late start to the season and shipping delays associated with record weather disruptions in July and August,
a portion of concentrate sales has been deferred to 2022.
In accordance with the operating agreement governing the Red Dog mine between Teck and NANA Regional
Corporation, Inc. (NANA), we pay a royalty on net proceeds of production to NANA, which increased from 30% to
35% in October 2017. This royalty increases by 5% every fifth year to a maximum of 50%, with the next adjustment to
40% anticipated to occur in October 2022. The NANA royalty expense in 2021 was US$255 million, compared with
US$175 million in 2020. NANA has advised us that it ultimately shares approximately 60% of the royalty, net of allowable
costs, with other Regional Alaska Native Corporations pursuant to section 7(i) of the Alaska Native Claims Settlement Act.
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.
Trail Operations
Our Trail Operations in southern B.C. produces refined zinc and lead, as well as a variety of precious and specialty
metals, chemicals and fertilizer products.
Trail Operations incurred a gross loss of $2 million in 2021, in comparison to a gross loss of $23 million in 2020 and
gross loss of $86 million in 2019. The lower gross loss in 2021 is primarily due to higher zinc and silver prices, partially
offset by higher operating costs and lower treatment charges.
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,
compared with 72,900 tonnes in 2020. Silver production was 11.7 million ounces in 2021, which was similar to 2020
at 11.5 million ounces.
18 Teck 2021 Annual Report | Purpose Driven
Our recycling process treated 39,800 tonnes of material during the year, and we plan to treat about 38,100 tonnes in
2022. Our focus remains on treating lead acid batteries and cathode ray tube glass, plus small quantities of zinc
alkaline batteries and other post-consumer waste.
In 2022, we expect Trail Operations to produce between 270,000 and 285,000 tonnes of refined zinc. Trail has major
maintenance activities planned from September to November 2022 to extend the operating life of key assets, which
are expected to impact 2022 production. The KIVCET furnace will have its hearth replaced and a zinc roaster will have
its dome replaced, both after 25 years of operation. Refined zinc production from 2023 to 2025 is expected to be
between 295,000 and 315,000 tonnes per year. Refined lead and silver production at Trail are expected to be similar
to prior years, but will fluctuate as a result of concentrate feed source optimization.
Markets
Zinc prices on the London Metal Exchange (LME) averaged US$1.36 per pound during 2021, higher than US$1.03 per
pound in 2020 and the highest annual average since 2007.
Zinc stocks on the LME fell by 2,650 tonnes in 2021, a 1.3% decrease from 2020 levels, finishing the year at 199,575 tonnes.
Stocks held on the Shanghai Futures Exchange (SHFE) rose 29,335 tonnes in 2021, a 103% increase from 2020 levels,
finishing the year at 57,920 tonnes. Total global exchange stocks remained well below historical levels, ending the year
at 6.7 days of global consumption, compared to the 25-year average of 17.5 days. We estimate that total reported
global stocks, which include producer, consumer, merchant and terminal stocks, fell by approximately 10,000 tonnes
in 2021 to 0.26 million tonnes at year-end, representing an estimated 7.0 days of global demand, compared to the
25-year average of 18.5 days.
In 2021, global zinc mine production increased 7.3% according to Wood Mackenzie, a commodity research consultancy,
with total production reaching 13.2 million tonnes, which is the first increase in mine production since 2018. Mine production
in 2021 was only 2.4% higher than it was in 2018. Wood Mackenzie expects global zinc mine production to only grow
0.9% in 2022 to reach 13.3 million tonnes. This increase is largely attributable to the return to pre-COVID-19 production
in Peru and several small increases in Mexico and China.
Wood Mackenzie estimates that the global zinc metal market moved into deficit in 2021, recording a shortfall of
0.31 million tonnes of available material. Global refined zinc demand rose 7.1% in 2021 over 2020, increasing to 14.1 million
tonnes. Demand outside of China rebounded strongly in Europe, North and South America, Russia and Africa because
of stronger demand from construction, infrastructure and renewable energy sectors.
Wood Mackenzie estimates that global refined zinc production increased 1.2% in 2021, with refined production reaching
13.8 million tonnes. They also estimate that refined zinc production will see a 0.9% increase in 2022 over 2021 levels, to
13.9 million tonnes. The estimate for the total increase in supply will be below global metal demand, which is forecast to
grow 2.3% to 14.5 million tonnes, suggesting that the refined metal market will be in a 0.5-million-tonne deficit in 2022.
Management’s Discussion and Analysis
19
Zinc Price and LME Inventory
Source: LME
Global Demand for Zinc
Source: Wood Mackenzie
Global Zinc Inventories
Source: ILZSG, LME, SHFE
$1.80
$1.60
$1.40
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.00
Price
2016
2017
2018
2019
2020
2021
1,200
1,000
800
600
400
200
0
Tonnes
20
16
12
8
4
60
50
40
30
20
10
2001
2005
2009
2013
2017
2021
0
0
Tonnes Days
2016
2017
2018
2019
2020 2021
2,200
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Tonnes
LME inventory (tonnes in thousands)
Zinc price (US$ per pound)
Rest of the world (tonnes in millions)
China (tonnes in millions)
Inventories (tonnes in thousands)
Days of global consumption
25-year average days inventory
Outlook
We expect 2022 production of zinc in concentrate, including co-product zinc production from Antamina (22.5%),
to be in the range of 630,000 to 665,000 tonnes. We expect lead production from Red Dog to be in the range of
80,000 to 90,000 tonnes in 2022.
In 2022, we expect our zinc total cash unit costs1 to be in the range of US$0.48 to US$0.53 per pound before cash
margins for by-products and US$0.32 to US$0.38 per pound after margins from by-products based on current
production plans, by-product prices and exchange rates. Net cash unit costs1 are expected to vary significantly
throughout the year, in line with normal seasonal sales patterns. Sales of Red Dog lead, our main by-product, are
typically completed in the third and fourth quarters, resulting in limited by-product credits and consequently higher
net cash unit costs in the first half of the year.
For the 2023 to 2025 period, we expect total zinc in concentrate production to be in the range of 590,000 to
650,000 tonnes per year.
At Red Dog, we currently expect sales of zinc in concentrate to be in the range of 130,000 to 150,000 tonnes in the
first quarter of 2022. As a result of the late start to the 2021 shipping season and historic weather-related delays,
a portion of sales that were expected to occur in the fourth quarter of 2021 have been deferred to the first and second
quarters of 2022.
1 This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
20 Teck 2021 Annual Report | Purpose Driven
Steelmaking Coal
In 2021, our steelmaking coal operations in Western Canada produced 24.6 million tonnes, with sales of 23.4 million
tonnes. The majority of our steelmaking coal sales are to the Asia-Pacific region, with the remaining amounts sold
primarily to Europe and the Americas. Our long-term annual average production capacity is 26 to 27 million tonnes,
and we have total proven and probable reserves of 867 million tonnes of steelmaking coal.
In 2021, our steelmaking coal business unit accounted for 46% of revenue and 55% of gross profit.
($ in millions)
Revenue
Gross profit
Gross profit before depreciation and amortization1
Production (million tonnes)
Sales (million tonnes)
$
$
$
2021
6,251
2,785
3,657
24.6
23.4
$
$
$
2020
3,375
277
1,009
21.1
21.9
$
$
$
2019
5,522
2,112
2,904
25.7
25.0
Note:
1. This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
Operations
During the year we continued to advance our high-quality development projects. The Harmer Project at Elkview
Operations, which is the next major project in our portfolio, is nearing completion of the feasibility study stage. Early
works commenced in the second half of 2021 and are expected to be completed in the second quarter of 2022, after
which construction can commence. The Harmer Project takes advantage of Elkview’s existing infrastructure and will
support Elkview’s rate of 9 million tonnes per annum with high-quality steelmaking coal at top-quartile operating
margins well into the future.
Gross profit for our steelmaking coal business unit was $2.8 billion in 2021, up from $277 million in 2020 and $2.1 billion
in 2019. Substantially higher steelmaking coal prices, combined with increased sales and production volumes, despite
ongoing COVID-19 impacts, contributed to a strong operating performance in 2021 when compared to 2020.
Our average realized steelmaking coal selling price in 2021 increased to US$209 per tonne, compared with US$113 per
tonne in 2020 and US$164 per tonne in 2019.
Sales volumes were 23.4 million tonnes in 2021, compared with 21.9 million tonnes sold in 2020. Strong logistics chain
performance supported the steady flow of steelmaking coal to markets, despite the impact of wildfires in July. Severe
rain and flooding events in November and extreme cold in December impacted our sales and production volumes late
Management’s Discussion and Analysis
21
in 2021, resulting in lower sales volumes in the fourth quarter compared to other quarters in 2021. Our 2021 production
of 24.6 million tonnes was 3.5 million tonnes higher than 2020 due to the extended Neptune outage and greater
COVID-19 impacts on production in the first half of 2020. Elkview Operations set a new production record in 2021,
with its first full year of operations since its plant expansion to a capacity of 9.0 million tonnes per annum.
Adjusted site cash cost of sales1 in 2021 was $65 per tonne, slightly higher than the $64 per tonne in 2020. The increase
in cost of sales is primarily due to inflationary pressures; however, this was mostly offset with the structural change in
our cost base and considerably higher production from our Elkview processing plant.
Capital spending in 2021 included $475 million for sustaining capital, including water, and $440 million for growth capital,
which includes $350 million for the Neptune upgrade project.
Elk Valley Water Quality Management Update
We continue to implement the water quality management measures required by the Elk Valley Water Quality Plan
(the Plan). The Plan establishes short-, medium- and long-term water quality targets for selenium, nitrate, sulphate and
cadmium to protect the environment and human health.
The majority of our 2021 capital spending for water projects in the steelmaking coal business unit was associated
with the Fording River Operation South Active Water Treatment Facility (FRO-S AWTF), and building additional
Saturated Rock Fill (SRF) capacity across the Elk Valley. Capital spending in 2021 on water projects was $226 million,
below our guidance of $255 million. Our existing SRFs and AWTFs are operating as designed and currently provide up
to 47.5 million litres per day of water treatment capacity in the Elk Valley. This includes the FRO-S AWTF which
advanced commissioning in the fourth quarter of 2021 and is now treating water and ramping up to full capacity.
Sustaining capital investment in water treatment (AWTFs and SRFs), water management (source control, calcite
management and tributary management) and the incremental measures required under the October 2020 Direction
issued by Environment and Climate Change Canada (the Direction) in 2022 is expected to be approximately
$280 million. By the end of 2022, we will have capacity to treat approximately 77.5 million litres of water per day,
a fourfold increase from our treatment capacity in 2020.
With this capacity, we expect to achieve one of the primary objectives of the Plan: stabilizing and reducing the
selenium trend in the Elk Valley.
From 2022 to 2024, we plan to invest between $650 and $750 million of capital on water management and water
treatment, including the capital portion of scope attributable to the previously disclosed Direction. It also includes the
advancement of an SRF project, which will increase treatment capacity in the north Elk Valley earlier than previously
planned. The above expected capital costs in 2022 to 2024 compares to our previous guidance of $400 to $500 million
as well as the capital scope associated with the disclosed $350 to $400 million aggregate cost of incremental
measures required under the Direction. The continued investment in water treatment during this time frame will further
increase our treatment capacity to 90 million litres per day through the development of SRFs.
Operating costs associated with water treatment were approximately $0.75 per tonne in 2021 and, as previously
disclosed, are projected to increase gradually over the long term to approximately $3 per tonne as additional water
treatment becomes operational. Long-term capital costs for construction of additional treatment facilities are
expected to average approximately $2 per tonne annually.
Final costs of implementing the Plan and other water quality initiatives will depend in part on the technologies applied,
on regulatory developments and on the results of ongoing environmental monitoring and modelling. The timing
of expenditures will depend on resolution of technical issues, permitting timelines and other factors. Certain cost
estimates are based on limited engineering and the feasibility of certain measures has not yet been confirmed.
Implementation of the Plan also requires additional operating permits. We expect that, in order to maintain water
quality, some form of water treatment will continue for an indefinite period after mining operations end. The Plan
contemplates ongoing monitoring to ensure that the water quality targets set out in the Plan are in fact protective
of the environment and human health, and provides for adjustments if warranted by monitoring results. Proposed
amendments to the Plan are under discussion with provincial regulators and First Nations. The state of Montana has
1 This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
22 Teck 2021 Annual Report | Purpose Driven
adopted a water quality standard for the Koocanusa Reservoir downstream of our mining operations that establishes
a selenium standard that may not be achievable with existing technology. We are taking steps to challenge this
standard. Ongoing monitoring, as well as our continued research into treatment technologies, could reveal unexpected
environmental impacts, technical issues or advances associated with potential treatment technologies that could
substantially increase or decrease both capital and operating costs associated with water quality management,
or that could materially affect our ability to permit mine life extensions in new mining areas.
Rail
Rail transportation of product westbound from our four steelmaking coal mines in southeast B.C. to Vancouver terminals
is currently provided by Canadian Pacific Railway Company (CPR) and by Canadian National Railway Company (CN Rail).
CPR transports a portion of these westbound shipments to Kamloops, B.C., and interchanges the trains with CN Rail
for further transportation to the west coast. The remainder of westbound shipments are handled by CPR from the
mines to the terminals in Vancouver. Our previous westbound 10-year agreement with CPR expired in March 2021 and
was replaced by a tariff that expires in April 2023. Rail rates have not been materially impacted by the introduction of
this tariff. Negotiations with CPR for a new long-term westbound contract are ongoing.
We have a long-term agreement until December 2026 with CN Rail for shipping steelmaking coal from our four B.C.
operations via Kamloops to Neptune Bulk Terminals (Neptune) and other west coast ports, including Ridley Terminals
Inc. The agreement enables significantly increased shipment volumes through the expanded Neptune Terminal.
CN Rail has completed the capital upgrades required to support Neptune volumes.
Ports
Construction of our Neptune port upgrade was completed in 2021 and the terminal was in a ramp-up phase during the
second half of the year. Ramp-up was impacted by the July wildfires and November flooding, both of which temporarily
disrupted rail service to Neptune. Despite these significant challenges, run rates achieved, and at times exceeded,
design capacity when normal rail service was provided. The new outbound system performed consistently through the
year, including successfully loading three Newcastlemax Capesize vessels, the largest vessels ever berthed at Neptune.
Neptune became our primary terminal in September and handled the majority of our export volumes through year-end.
The terminal is well positioned to deliver strong throughput in 2022 and beyond, with significantly increased terminal-
loading capacity to meet our delivery commitments to our customers while lowering our port costs.
Sales
Our steelmaking coal marketing strategy is focused on maintaining and building relationships with our traditional
customers, while establishing new customers in markets where we anticipate long-term growth in steel production and
demand for seaborne steelmaking coal. In 2021, we continued to focus on areas with the greatest demand growth,
including increased sales volumes to China to capitalize on premium pricing, which reached a peak of US$614 per tonne
in October.
Management’s Discussion and Analysis
23
Markets
Global steel production reached a new record high in 2021. As a result, demand for seaborne steelmaking coal was
healthy throughout 2021, with demand from China remaining high due to the import restrictions on Australian coal,
reduced Mongolian imports as a result of COVID-19, and domestic supply constraints. Seaborne steelmaking coal
imports into China from countries excluding Australia reached a new record high in 2021 that was higher than the
previous record going back to 2013. Further, a new monthly high in December surpassed the previous record set in
September. This new record was achieved despite a concerted effort in China during the second half of 2021 to curtail
steel production to similar levels as 2020.
Demand for steelmaking coal in the rest of the world increased in 2021, with ex-China steelmakers operating at rates
exceeding pre-COVID-19 production levels. Consequently, the average of the FOB Australia price assessments increased
from approximately US$100 per tonne in January to record highs of approximately US$400 per tonne in October and
November before declining slightly to exit the year in the range of US$350 per tonne.
The following graphs show key metrics affecting steelmaking coal sales: spot price assessments and quarterly pricing,
hot metal production (each tonne of hot metal, or pig iron, produced requires approximately 650–700 kilograms of
steelmaking coal), and China’s steelmaking coal imports by source.
Daily Steelmaking Coal Assessments
Source: Argus, Platts, TSI
Hot Metal (Pig Iron) Production
Source: World Steel Association, National
Bureau of Statistics of China
China Steelmaking Coal Imports
Source: China’s Customs
$450
$400
$350
$300
$250
$200
$150
$100
$50
2016
2017
2018
2019
2020
2021
2001
2005
2009
2013
2017
2021
1,400
1,200
1,000
800
600
400
200
0
Tonnes
80
70
60
50
40
30
20
10
2013
2015
2017
2019
2021
0
Tonnes
Rest of the world (tonnes in millions)
China (tonnes in millions)
Landborne (tonnes in millions)
Seaborne (tonnes in millions)
Spot price assessments
(US$ per tonne FOB Australia)
Quarterly benchmark
(US$ per tonne FOB Australia)
Quarterly index-linked price
(US$ per tonne FOB Australia)
Outlook
Despite unprecedented logistics challenges in 2021, our steelmaking coal business unit delivered strong financial
results in 2021 and is well positioned to deliver strong financial performance again in 2022. Sales previously planned
for the fourth quarter of 2021 are expected to be largely recovered in the first half of 2022, which should result in
inventories returning to normal levels. Assuming full recovery of the rail network we expect sales to be between 6.1 and
6.5 million tonnes for the first quarter of 2022.
We expect annual production in 2022 to be between 24.5 and 25.5 million tonnes. The 2022 production estimate is
reflective of some constraints on production due to the weather events and impacts mentioned above, which may
result in production curtailments in the first quarter due to high steelmaking coal inventory levels. In addition, the recent
surge in COVID-19 cases has the potential to have a negative impact on our operations. An increase in cases in
southeastern British Columbia has resulted in rising absenteeism at our steelmaking coal operations in the Elk Valley.
While this has so far not had a major impact on productivity, it poses a risk to first quarter 2022 results.
24 Teck 2021 Annual Report | Purpose Driven
We expect 2022 adjusted site cash cost of sales1 to be between $72 and $77 per tonne. This is an increase relative to
previous years, primarily due to inflationary cost pressures, which have increased the cost of key inputs to our business.
Costs are also higher due to insurance, our investment in RACE21™ and the continued strong price of steelmaking coal,
which has corresponding cost impacts relating to profit-based compensation and business interruption insurance
premiums. In the current high price environment, we expect to utilize contract labour, rental equipment and other
strategies to enable our production plan and to mitigate the risk associated with increased absenteeism due to COVID-19.
Overall, the primary cost increases are not related to key mining drivers such as mine productivity and strip ratio,
which remain relatively stable or are forecasted to improve compared to 2021. The relative stability of our key mining
drivers is supported by the quality of our operating assets in the Elk Valley and our focus on continuous improvement
and best-in-class haul truck productivity. The increased costs expected for 2022 are more than offset by the continued
strong steelmaking coal prices and some of the cost increase is directly related to increased prices.
Transportation unit costs in 2022 are expected to be between $43 and $46 per tonne. Inflationary conditions remain
a factor in the general increase in transportation costs. Rail related diesel surcharges, ocean freight and demurrage,
as well as general cost inflation are the principal drivers of these increases. Inflationary pressures are expected to
persist through 2022 but will be partially offset with the savings associated with use of our expanded Neptune terminal
throughout the year.
In early 2022, transportation unit costs are expected to be impacted by the lagging effects of the late 2021 logistics
interruption. The extreme weather conditions at the end of 2021 resulted in a significant number of vessels at anchor
at the start of 2022. Longer vessel wait times in the first quarter of 2022 will have a pronounced impact to demurrage
charges that will push transportation unit costs above our annual guidance range in the first quarter of 2022. As supply
chain recovery occurs, with expectations that mine inventories will be reduced within the first half of the year, the vessel
queue and associated costs are anticipated to decrease. Combined with the Neptune structurally lower cost base,
transportation unit costs are expected to decrease in the second half of 2022 and be below the $43 to $46 per tonne
annual guidance range.
Going forward, Neptune will drive a structurally lower cost base for the logistics chain. CN Rail and CP Rail infrastructure
improvements between Kamloops and Vancouver are supporting Neptune rail volumes. We have maintained our
commercial agreements with Westshore Terminals and Ridley Terminals, which enhance our optionality and sales
flexibility, particularly during disruptions. Outside of the disruptions, our logistics network performed very well in 2021,
achieving historic low inventories at times during the year. With increased terminal capacity at Neptune, optimization
through integrated pit-to-port operations and significant optionality, we expect the logistics chain to deliver strong
sales volumes in 2022.
We expect capital expenditures for 2022 to be approximately $785 million for sustaining and growth capital. The total
includes $280 million of sustaining capital related to water treatment, which will bring our total water treatment
capacity to approximately 77.5 million litres per day by the end of 2022. In addition, total capital includes $470 million
of sustaining capital for operations, major projects and Neptune, which will be used to sustain our mining operations
and develop key projects such as the Harmer Project at Elkview Operations. Growth capital of $35 million will be used
to continue to advance processing and mining analytics initiatives and support supply chain cost optimization.
We expect capitalized stripping costs to be approximately $480 million in 2022, an increase from 2021 as a number
of development mining areas transition from sustaining pre-production capital to early stages of operations.
1 This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
Management’s Discussion and Analysis
25
Energy
Our energy business unit primarily includes a 21.3% interest in the Fort Hills oil sands mine. Our share of production at
the Fort Hills oil sands mine was 7.3 million barrels of bitumen in 2021.
In 2021, our energy business unit accounted for 5% of revenue and incurred a $133 million gross loss.
Fort Hills1
($ in millions)
Western Canadian Select (US$/bbl)
Blended bitumen price (realized US$/bbl)
Bitumen price (realized CAD$/bbl)
Operating netback (CAD$/bbl)2
Production (million bitumen barrels)
Production (average barrels per day)
Sales (million blended bitumen barrels)
Gross profit (loss)
Gross profit (loss) before depreciation and amortization2
2021
2020
2019
$
$
$
$
54.87
58.14
61.78
(3.25)
7.3
19,935
9.3
(133)
(37)
$
$
$
$
$
$
26.82
27.99
25.27
(19.02)
8.4
$
$
$
$
41.13
45.20
52.21
11.85
12.3
22,875
33,593
11.6
(326)
(223)
$
$
$
$
16.0
10
144
Notes:
1. Fort Hills figures presented at our ownership interest of 21.3%.
2. This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
Fort Hills
The Fort Hills oil sands mine is located in northern Alberta. We hold a 21.3% interest in the Fort Hills Energy Limited
Partnership (Fort Hills Partnership), which owns the Fort Hills oil sands mine, with Suncor Energy Inc. (Suncor) and
Total E&P Canada Ltd. (Total) holding the remaining interest. An affiliate of Suncor is the operator of Fort Hills.
Our gross loss from Fort Hills was $133 million in 2021, compared with a gross loss of $326 million in 2020 and a
$10 million gross profit in 2019. The gross loss in 2021 decreased by $193 million compared with a year ago, primarily
due to an increase in global benchmark crude oil prices, including Western Canadian Select (WCS), partially offset
by higher operating costs. We recorded bitumen and diluent inventory write-downs of $11 million during the year
compared to $54 million in 2020.
Our 21.3% share of bitumen production from Fort Hills was 19,935 barrels per day in 2021. This compares to 22,875 barrels
per day produced in 2020. The change is primarily attributable to a slower than initially planned ramp-up to a two-train
operation. In 2021, mining challenges associated with the mobilization and ramp-up of contractor overburden stripping,
26 Teck 2021 Annual Report | Purpose Driven
groundwater inflow from subsurface aquifers, and issues related to slope instability on the south side of the mine,
which contained most of the exposed ore, delayed production ramp-up to two trains. In December 2021, Fort Hills
production ramp-up was safely and successfully completed. Since that time, Fort Hills has continued operating as
a two train operation.
Cost of sales was $848 million in 2021 compared with $780 million in 2020 due to higher mining costs associated with
production ramp-up. Higher mining costs related to increased spend on contractor overburden stripping to support
production ramp-up, managing mine slope instability and capping the major groundwater inflows. Adjusted operating
costs1 of $47.89 per barrel in 2021 were higher than the $31.96 per barrel in 2020 due to higher mining costs and lower
production volumes during the year.
Our share of Fort Hills’ capital expenditures in 2021 was $80 million, which related to tailings infrastructure and work
to transition to the next mining area at Fort Hills.
During the fourth quarter of 2021, as a result of updated mine plans for Fort Hills, we performed an impairment test on
our Fort Hills CGU. Using a long-term WCS heavy oil price of US$48 per barrel, a long-term Canadian to U.S. dollar
foreign exchange rate of CAD$1.28 to US$1.00 and an 8% real, post-tax discount rate resulted in a recoverable amount
of $2.1 billion, which approximated our carrying value as at December 31, 2021.
The key inputs used in our determination of recoverable amounts interrelate significantly with each other and with
our operating plans. For example, a decrease in long-term commodity prices could result in amendments to the mine
plans that would partially offset the effect of lower prices through lower operating and capital costs. It is difficult to
determine how all of these factors would interrelate, but in estimating the effect of changes in these assumptions on
fair values, we believe that all of these factors need to be considered together. A linear extrapolation of these effects
becomes less meaningful as the change in assumption increases.
The valuation of our interest in Fort Hills is most sensitive to changes in WCS oil prices, Canadian/U.S. dollar exchange
rates and discount rates. Based on the discounted cash flow model used to determine the recoverable amount as at
December 31, 2021, ignoring the above-described interrelationships, a US$1 change in the real long-term WCS oil
price would result in a change in the recoverable amount of $100 million. A $0.01 change in the Canadian dollar against
the U.S. dollar would result in a change in the recoverable amount of approximately $30 million. A 25 basis point
change in the discount rate would result in a change in the recoverable amount of approximately $50 million. Using a
long-term WCS price of US$53 per barrel would increase the estimated value by $500 million to $2.6 billion and using
a long-term WCS price of US$58 per barrel would increase the estimated value by $1.0 billion to $3.1 billion. As of the
date of this Management’s Discussion and Analysis, the WCS price is US$79 per barrel.
Markets
Fort Hills’ bitumen production is delivered to a blend facility located near Fort McMurray, Alberta and ultimately sold
as a blended bitumen product known as Fort Hills Reduced Carbon Life Cycle Dilbit Blend (FRB). We sell our share of
FRB to a variety of customers at the Hardisty, Alberta market hub and the U.S. Gulf Coast. In 2021, approximately
70% of our FRB sales were at Hardisty, with the remainder at the U.S. Gulf Coast.
Our blended bitumen price realizations are influenced by NYMEX light sweet crude oil (WTI) and Canadian heavy crude
oil differentials at Hardisty, and the U.S. Gulf Coast for WCS. Price realizations are also marginally affected by the
specific quality of our blended bitumen.
In 2021, WTI averaged US$67.92 per barrel. The WCS price for our Hardisty deliveries of blended bitumen was indexed
at an average of WTI less US$13.05 per barrel, for a WCS blend value of US$54.87 per barrel. U.S. Gulf Coast deliveries
were priced at an average of WTI minus US$3.73 per barrel, for a WCS blend value of US$64.19 per barrel.
The global crude oil market recovered in 2021 amid the ongoing challenges of the COVID-19 pandemic as it transitioned
from a global crude oil surplus in 2020 to a deficit in 2021. The demand recovery was aided by the increase in global
vaccination rates, improved mobility, and government stimulus programs. Crude oil supply was largely impacted by the
voluntary production curtailment arrangements of the OPEC+ consortium in both 2020 and 2021. Their large reduction
1 This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information
Management’s Discussion and Analysis
27
of supply starting in May 2020 reduced the magnitude of the oil surplus that year and the measured, rateable return of
only a portion of their curtailed production during 2021 contributed to the deficit that supported prices.
During 2021, global crude oil prices significantly and steadily improved, with the WTI benchmark closing at just over
US$75 per barrel at the end of December. Crude oil prices have continued to rise into the first quarter of 2022, with
WTI averaging approximately US$83 per barrel in January 2022.
Canadian production continued to increase in 2021 due to improved economics and the elimination of the Government
of Alberta production restrictions. The increase in production resulted in pipelines filling up, prompting high levels of
apportionment on the Enbridge Mainline and the return of excess volumes being shipped to market by rail. The additional
pipeline capacity connecting Western Canada to the U.S. Midwest, with the start-up of the Enbridge Line 3 replacement
project, and to the U.S. Gulf Coast, via the reversal of the Capline pipeline that came online later in 2021, has been
supportive to local prices by allowing for export pipeline capacity to be more in line with Canadian supply.
Operating Netback
The following table summarizes our Fort Hills operating netback for the year.
(Amounts reported in CAD$ per barrel of bitumen sold)
2021
2020
2019
Bitumen price realized2
Crown royalties3
Transportation costs for FRB4
Adjusted operating costs1,5
Operating netback1
$
61.78
(2.18)
(14.96)
(47.89)
$
25.27
$
52.21
(0.49)
(11.84)
(31.96)
(1.50)
(9.62)
(29.24)
$
(3.25)
$
(19.02)
$
11.85
Notes:
1. This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
2. Bitumen price realized represents the realized petroleum revenue (blended bitumen sales revenue) net of diluent expense, expressed on a per
barrel basis. Blended bitumen sales revenue represents revenue from our share of the heavy crude oil blend known as Fort Hills Reduced Carbon
Life Cycle Dilbit Blend (FRB), sold at the Hardisty and U.S. Gulf Coast market hubs. FRB is comprised of bitumen produced from the Fort Hills oil
sands mining and processing operations blended with purchased diluent. The cost of blending is affected by the amount of diluent required and
the cost of purchasing, transporting and blending the diluent. A portion of diluent expense is effectively recovered in the sales price of the blended
product. Diluent expense is also affected by Canadian and U.S. benchmark pricing and changes in the value of the Canadian dollar relative to the
U.S. dollar.
3. The royalty rate applicable to pre-payout oil sands operations starts at 1% of gross revenue and increases for every dollar by which the WTI crude
oil price in Canadian dollars exceeds $55 per barrel, to a maximum of 9% when the WTI crude oil price is $120 per barrel or higher. Fort Hills is
currently in the pre-payout phase.
4. Transportation costs represent pipeline and storage costs downstream of the East Tank Farm blending facility. We use various pipeline and
storage facilities to transport and sell our blend to customers throughout North America. Sales to the U.S. markets require additional
transportation costs, but realize higher selling prices.
5. Adjusted operating costs represent the costs to produce a barrel of bitumen from the Fort Hills mine and processing operation.
Outlook
With Fort Hills resuming a two-train operation in the fourth quarter, the facility is expected to operate at an average
utilization rate of 90% throughout 2022. As such, we expect our share of annual production from Fort Hills to be
approximately 33,000 to 39,400 barrels per day in 2022. The midpoint of our guidance represents an increase of
approximately 85% compared to 2021 production. Annual adjusted operating costs1 are expected to be $26 to $30 per
barrel in 2022, a decrease of close to 40% compared to 2021.
Capital spending in our energy business unit in 2022, which is expected to be approximately $140 million, primarily for
tailings infrastructure and work to transition to the next mining area at Fort Hills.
1 This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
28 Teck 2021 Annual Report | Purpose Driven
RACE21™
In May 2019, we began implementing RACE21™, our innovation-driven business transformation program. RACE21™ is a
company-wide approach to Renewing our technology infrastructure, Accelerating and scaling automation and robotics,
Connecting data systems to enable broad application of advanced analytics and artificial intelligence, and Empowering
our employees, all with a focus on improving our operating results through 2021 and beyond.
We are in the process of completing the RACE21™ program, with the implementation of a handful of initiatives
remaining, and are compiling program results, which will be communicated in due course. Our digital transformation
continues and the team is focused on our longer-term digital transformation with a continued emphasis on increased
efficiencies and value creation.
Exploration & Geoscience
Throughout 2021, we conducted exploration around our existing operations and globally in seven countries through
our six regional offices. Our exploration activities continued to be impacted by the COVID-19 pandemic as we took
actions to protect our teams and host communities. Expenditures for the year of $65 million were focused on copper,
zinc and gold and were higher than expenditures in 2020 of $45 million, primarily due to the recommencement of
drilling programs across our portfolio.
Exploration & Geoscience plays three critical roles at Teck: discovery of new orebodies through early-stage exploration
and acquisition; pursuit, evaluation and acquisition of development opportunities; and delivery of geoscience solutions
and services to create value at our existing mines and development projects.
Work continues on resource expansion at Quebrada Blanca where we are commencing another large-scale drill program
in 2022 to continue to investigate and confirm the extensions of the orebody, which remains open in multiple directions.
Early-stage copper exploration in 2021 focused primarily on advancing projects targeting porphyry-style mineralization
in Canada, Chile, Peru and the United States. In 2022, we plan to drill a number of early-stage copper projects in Chile,
Peru and the United States.
Zinc exploration in 2021 was concentrated on early-stage programs in Australia, Canada, Ireland and Turkey and an
advanced-stage project in the Red Dog mine district in Alaska. In Alaska, Australia and Canada, the targets are large
sediment-hosted deposits and in Ireland, we are targeting large carbonate-hosted deposits. In 2022, we plan to drill
test early-stage targets on our properties in Australia, Ireland and Turkey and to continue drilling advanced-stage
projects in the Red Dog mine district in Alaska.
We have ongoing exploration for gold, both on 100% Teck-owned properties and through partnerships. Our current
exploration efforts and drill testing for gold are focused in Peru and Turkey.
In 2021, we also drilled 87 kilometres across four steelmaking coal operations in the Elk Valley to support our existing
operations and extension projects.
Management’s Discussion and Analysis
29
Financial Overview
Financial Summary
($ in millions, except per share data)
Revenue and profit
Revenue
Gross profit
Gross profit before depreciation and amortization1
Profit (loss) attributable to shareholders
Profit (loss) before taxes
Adjusted EBITDA1
Cash flow
Cash flow from operations
Property, plant and equipment expenditures
Capitalized stripping costs
Investments
Balance sheet
Cash and cash equivalents
Total assets
Debt and lease liabilities, including current portion
Per share amounts
Basic earnings (loss) per share
Diluted earnings (loss) per share
Dividends declared per share
2021
2020
2019
$ 13,481
5,081
$
$ 6,664
$ 2,868
4,532
6,573
$
$
4,738
$
$ 4,046
667
160
$
$
$
$
$
$
$
$
$
$
$
$
8,948
1,333
2,843
(864)
(1,136)
2,570
1,563
3,129
499
190
$
$
$
$
$
$
$
$
$
$
11,934
3,340
4,959
(605)
(468)
4,473
3,484
2,788
680
178
1,427
$
$ 47,368
$ 8,068
$
450
$
1,026
$ 41,278
$ 39,350
$
6,947
$
4,834
$
$
$
5.39
5.31
0.20
$
$
$
(1.62)
(1.62)
0.20
$
$
$
(1.08)
(1.08)
0.20
Note:
1. This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
Our revenue and profit depend on the prices for the commodities we produce, sell and use in our production processes.
Commodity prices are determined by the supply of and demand for those commodities, which are influenced by global
economic conditions. We normally sell the products that we produce at prevailing market prices or, in the case of
steelmaking coal, through an index-linked pricing mechanism or on a spot basis. Prices for our products can fluctuate
significantly, and that volatility can have a material effect on our financial results.
30 Teck 2021 Annual Report | Purpose Driven
Foreign exchange rate movements can also have a significant effect on our results and cash flows, as substantial
portions of our operating costs are incurred in Canadian dollars and other currencies, and most of our revenue and
debt is denominated in U.S. dollars. We determine our financial results in local currency and report those results in
Canadian dollars; accordingly, our reported operating results and cash flows are affected by changes in the Canadian
dollar exchange rate relative to the U.S. dollar, as well as the Peruvian sol and Chilean peso.
In 2021, we had a profit attributable to shareholders of $2.9 billion, or $5.39 per share. This compares with a loss
attributable to shareholders of $864 million or $1.62 per share in 2020, and a loss attributable to shareholders of
$605 million or $1.08 per share in 2019. In 2021, we had profit before taxes of $4.5 billion, which compares with a loss
before taxes of $1.1 billion in 2020 and $468 million in 2019. The significant improvement in our profit attributable to
shareholders in 2021 was due to higher prices for all of our principal products, as well as an increase in sales volumes
of steelmaking coal, which also drove record annual adjusted EBITDA. In 2020, COVID-19 had a significant negative
effect on the price and demand for our products, reducing our profit attributable to shareholders compared to 2019.
We recorded an asset impairment reversal in 2021, which increased our profit attributable to shareholders in 2021.
Asset impairments were recorded in 2020 and 2019 and reduced profit attributable to shareholders in each respective
year, as outlined below. Other significant items affecting our profit and loss attributable to shareholders in 2021, 2020
and 2019 are also outlined below.
Our profit and loss over the past three years has included items that we segregate for presentation to investors so
that the underlying profit of the company may be more clearly understood. Our adjusted EBITDA1, which takes these
items into account, was $6.6 billion in 2021, $2.6 billion in 2020 and $4.5 billion in 2019. Our adjusted profit attributable
to shareholders1, which takes these items into account, was $3.1 billion in 2021, $561 million in 2020 and $1.7 billion
in 2019, or $5.74, $1.05 and $3.03 per share, respectively. These items are described below and summarized in the
table that follows.
In 2021, we recorded a non-cash pre-tax asset impairment reversal on our Carmen de Andacollo Operation of
$215 million as a result of an increase in market expectations for long-term copper prices. We also recorded $141 million
in expenses associated with QB2 variable consideration owing to a former owner and to a holder of a carried interest,
as outlined in the “Other Expenses” section.
In 2020, as outlined below, COVID-19 had a significant effect on our financial results, with decreases in commodity
prices, most significantly for steelmaking coal and blended bitumen, the temporary suspension of construction on our
QB2 project and temporary reductions in production at our operations in the second quarter. As a result, we expensed
$434 million of costs associated with COVID-19, primarily relating to the suspension of our QB2 project, including
$103 million of interest that would otherwise have been capitalized if construction on QB2 had not been suspended.
We also recorded inventory write-downs of $134 million, primarily in our steelmaking coal and energy business units,
as a result of lower prices.
During 2020, we recorded non-cash pre-tax asset impairments on our interest in Fort Hills of $1.2 billion. We also recorded
environmental costs of $270 million, primarily relating to a decrease in the rates used to discount our decommissioning
and restoration provisions, and increased expected remediation costs.
In 2019, we recorded non-cash pre-tax impairments of $1.2 billion on our interest in Fort Hills as a result of lower
market expectations for future WCS heavy oil prices; $1.1 billion on our Frontier oil sands project as a result of our
decision to withdraw the project from the regulatory review process; and $289 million on our Cardinal River Operations
and $31 million on our Quebrada Blanca cathode operations, each of which had short remaining mine lives. We also
redeemed US$600 million of outstanding 8.5% notes due in 2024 and recorded a $224 million pre-tax expense on the
transaction, of which $174 million was non-cash. This charge was partially offset by a $105 million pre-tax gain on the
debt prepayment option in the 8.5% 2024 notes up to the date of redemption.
1 This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
Management’s Discussion and Analysis
31
The following table shows the effect of these items on our profit (loss).
($ in millions, except per share data)
2021
2020
2019
Profit (loss) attributable to shareholders
$ 2,868
$
(864)
$
(605)
Add (deduct) on an after-tax basis:
Asset impairments (impairment reversal)
COVID-19 costs
QB2 variable consideration to IMSA and ENAMI
Environmental costs
Inventory write-downs
Share-based compensation
Commodity derivatives
Debt prepayment option gain
Loss on debt redemption
Other
Adjusted profit attributable to shareholders1
Basic earnings (loss) per share
Diluted earnings (loss) per share
Adjusted basic earnings per share1
Adjusted diluted earnings per share1
(150)
–
124
79
2
94
15
–
–
25
$
$
$
$
$
3,057
5.39
5.31
5.74
5.66
$
$
$
$
$
912
233
(34)
210
91
34
(46)
–
8
25
561
(1.62)
(1.62)
1.05
1.04
2,052
–
(22)
142
41
3
(13)
(77)
166
10
1,697
(1.08)
(1.08)
3.03
3.00
$
$
$
$
$
Note:
1.
This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
Cash flow from operations in 2021 was $4.7 billion, compared with $1.6 billion in 2020 and $3.5 billion in 2019. The
changes in cash flow from operations are mainly due to varying commodity prices and sales volumes, offset to some
extent by changes in foreign exchange rates.
At December 31, 2021, our cash balance was $1.4 billion. Total debt was $8.1 billion and our net-debt to net-debt-plus-
equity ratio1 was 22% at December 31, 2021, compared with 24% at December 31, 2020 and 15% at the end of 2019.
COVID-19 Financial Impact
COVID-19 operating protocols remain in place across our business, with a continued focus on preventive measures,
controls and compliance processes, and the integration of these actions into our operations and business planning.
Operating our mines at full production in a COVID-19 environment increases certain costs, such as medical testing,
safety equipment, safety supplies, additional transportation costs, accommodation costs for social distancing, and
increased absenteeism, among other things. These costs and certain costs related to inefficiencies would not have
occurred absent COVID-19 and are incremental costs. However, they are considered a cost of operating in this
environment and are not adjusted for in our adjusted profit calculation. To the extent these costs or inefficiencies have
significantly impacted business unit costs or performance in 2021, they are discussed in the respective business unit
sections of this Management’s Discussion and Analysis.
During 2020, the COVID-19 pandemic had a significant negative effect on prices and demand for our products and
on our financial results. As a result of the pandemic, during the second quarter of 2020, we had to temporarily reduce
production at a number of our operations, and we suspended active construction on our QB2 project. We incurred idle
labour and other non-productive costs while production was temporarily reduced and these costs were adjusted for
in our adjusted profit calculation, noted above.
During 2020, we expensed $272 million in costs associated with the temporary suspension of our QB2 project and the
remobilization of the project. We also expensed $103 million of interest that would otherwise have been capitalized if
1 This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
32 Teck 2021 Annual Report | Purpose Driven
construction on our QB2 project had not been suspended. Consistent with the return to active construction on the
QB2 project in the third quarter of 2020, we recommenced capitalization of borrowing costs and we did not expense
further costs associated with the remobilization of the project in the fourth quarter of 2020. For the year ended
December 31, 2020, we expensed pre-tax COVID-19 costs of $434 million (after-tax $233 million).
Gross Profit
Our gross profit is made up of our revenue less the operating expenses at our producing operations, including
depreciation and amortization. Income and expenses from our business activities that do not produce commodities
for sale are included in our other operating income and expenses or in our non-operating income and expenses.
Our principal commodities are copper, zinc, steelmaking coal and blended bitumen, which accounted for 23%, 16%,
46% and 5% of revenue, respectively, in 2021. Silver and lead are significant by-products of our zinc operations,
accounting for 7% of our 2021 revenue. We also produce a number of other by-products, including molybdenum,
various specialty metals, and chemicals and fertilizers, which in total accounted for 3% of our revenue in 2021.
Our revenue is affected by sales volumes, which are determined by our production levels and by demand for the
commodities we produce, commodity prices and currency exchange rates.
Our revenue was a record $13.5 billion in 2021, compared with $8.9 billion in 2020 and $11.9 billion in 2019. The increase
in 2021 revenue from 2020 was primarily due to substantially higher prices for our principal products and increased
sales volumes of steelmaking coal. These increases were partially offset by a decrease in sales volumes of refined zinc
and zinc in concentrate and by the strengthening of the Canadian dollar. The decrease in 2020 revenue from 2019
revenue was primarily due to the impact of COVID-19 on prices for our products, most significantly steelmaking coal,
zinc and blended bitumen. Revenue was also negatively impacted in 2020 by significantly lower sales volumes for
steelmaking coal due to the impact of COVID-19 on demand, logistics chain issues early in the year and the planned
shutdown at Neptune. These decreases were partially offset by an increase in copper prices.
Average prices for copper, zinc, steelmaking coal and blended bitumen were 51%, 32%, 85% and 108% higher in 2021
than in 2020.
Our cost of sales includes all of the expenses required to produce our products, such as labour, energy, operating
supplies, concentrates purchased for our Trail Operations’ refining and smelting activities, diluent purchased for our
Fort Hills oil sands mine to transport our bitumen by pipeline, royalties, and marketing and distribution costs required
to sell and transport our products to various delivery points. Our cost of sales also includes depreciation and
amortization expense. Due to the geographic locations of many of our operations, we are highly dependent on third
parties for the provision of rail, port, pipeline and other distribution services. In certain circumstances, we negotiate
prices and other terms for the provision of these services where we may not have viable alternatives to using specific
providers or may not have access to regulated rate-setting mechanisms or appropriate remedies for service failures.
Contractual disputes, demurrage charges, availability of vessels and railcars, weather problems and other factors,
as well as rail, port and pipeline capacity issues can have a material effect on our ability to transport materials from
our suppliers and to our customers in accordance with schedules and contractual commitments.
2021 Revenue by Business Unit
2021 Gross Profit by Business Unit
2021 Revenue by Commodity
23%
Zinc
14%
Zinc
16%
Zinc
26%
Copper
5%
Energy
34%
Copper
23%
Copper
46%
Steelmaking
Coal
46%
Steelmaking
Coal
–3%
Energy
55%
Steelmaking
Coal
10%
Other
5%
Blended
Bitumen
Management’s Discussion and Analysis
33
Our costs are dictated mainly by our production volumes, by the costs for labour, operating supplies, concentrate
purchases and diluent purchases, and by strip ratios, haul distances, ore grades, distribution costs, commodity prices,
foreign exchange rates and costs related to non-routine maintenance projects, and by our ability to manage these
costs. Production volumes mainly affect our variable operating and distribution costs. In addition, production affects
our sales volumes; when combined with commodity prices, this affects profitability and our royalty expenses.
Our cost of sales was $8.4 billion in 2021, compared with $7.6 billion in 2020 and $8.6 billion in 2019. The increase in
cost of sales in 2021 compared to 2020 was primarily due to an increase in production volumes during the year.
Depreciation and amortization increased by $73 million compared to 2020 as a result of higher production volumes.
Other Expenses
($ in millions)
General and administration
Exploration
Research and innovation
Asset impairment (impairment reversal)
Other operating (income) expense
Finance income
Finance expense
Non-operating (income) expense
Share of losses of associates and joint ventures
$
2021
2020
2019
174
65
129
(215)
78
(5)
215
105
3
$
$
132
45
97
161
67
67
1,244
2,690
725
(10)
278
(43)
1
505
(48)
266
97
3
$
549
$
2,469
$
3,808
In 2021, general and administration expenses of $174 million increased by $42 million compared to 2020 as travel,
project and other corporate activity levels returned to pre-COVID-19 levels.
Our exploration expenses in 2021 of $65 million were focused on copper, zinc and gold and were higher than
expenditures in 2020 of $45 million, primarily due to the recommencement of drilling programs across our portfolio.
We must continually replace our reserves as they are depleted in order to maintain production levels over the long
term. We try to do this through our exploration and development programs and through acquisition of interests in new
properties or in companies that own them. Exploration for minerals, steelmaking coal and oil is highly speculative, and
the projects involve many risks. The vast majority of exploration projects are unsuccessful and there are no assurances
that current or future exploration programs will find deposits that are ultimately brought into production.
Our research and innovation expenditures of $129 million in 2021 were primarily focused on advancing our proprietary
CESL hydrometallurgical technology, the development of internal and external growth opportunities, RACE21™,
and the development and implementation of process and environmental technology improvements at operations.
Research and innovation expenditures increased by $32 million compared to 2020 due to the continuation of our
RACE21™ program during the year.
We recorded an asset impairment reversal of $215 million in 2021, and asset impairments of $1.2 billion in 2020 and
$2.7 billion in 2019, as outlined in the following table:
($ in millions)
Carmen de Andacollo
Fort Hills
Frontier project
Cardinal River Operations
Other
34 Teck 2021 Annual Report | Purpose Driven
2021
2020
$
(215)
–
–
–
–
$
–
$
1,244
–
–
–
2019
–
1,241
1,129
289
31
$
(215)
$
1,244
$
2,690
During the year ended December 31, 2021, we recorded a non-cash, pre-tax asset impairment reversal of $215 million
(after-tax $150 million) at our Carmen de Andacollo Operation relating to an increase in market expectations for
long-term copper prices.
In the fourth quarter of 2020, updated mine plans for Fort Hills became available, reflecting an earlier-than-planned
restart of the two-train operations and including operating and capital cost reductions over the life of mine. These
updates to the mine plans indicated a change in the valuation of the asset. This, combined with macroeconomic
conditions, including the cost of capital for oil assets and lower market expectations for long-term WCS heavy oil
prices, required us to perform an impairment test for our interest in Fort Hills. As a result, we recorded a non-cash,
pre-tax asset impairment for our interest in Fort Hills of $597 million (after-tax $438 million) in the fourth quarter.
The estimated post-tax recoverable amount of our Fort Hills cash-generating unit (CGU) of $2.1 billion was lower than
our carrying value.
Combined with a pre-tax impairment of $647 million (after-tax $474 million) recorded in the first quarter of 2020,
we recorded total pre-tax impairments related to our interest in Fort Hills of $1.2 billion in 2020.
In 2019, we recorded asset impairments of $2.7 billion, of which $1.2 billion related to our interest in Fort Hills due to
lower market expectations for future WCS oil prices, and $1.1 billion related to our Frontier oil sands project due to our
decision to withdraw the project from the regulatory review process. In addition, we recorded impairments of $289 million
related to our Cardinal River Operations as a result of our decision not to proceed with the MacKenzie Redcap extension,
the short remaining mine life, a reduction in short-term steelmaking coal prices and $31 million related to remaining
Quebrada Blanca assets as we near the end of operations.
The key inputs used in determining the magnitude of the asset impairment reversal and asset impairments are outlined
on pages 50 to 51 in this Management’s Discussion and Analysis.
Other operating income and expenses include items we consider to be related to the operation of our business,
such as final pricing adjustments (which are further described below), share-based compensation, gains or losses on
commodity derivatives, gains or losses on the sale of operating or exploration assets, and provisions for various costs
at our closed properties. Significant items in 2021 included $442 million of positive pricing adjustments, partially
offset by $125 million of share-based compensation relating to improved share prices. We also recorded $108 million
of environmental costs, primarily relating to a decrease in the rates used to discount our decommissioning and
restoration provisions for closed operations, and $97 million of take-or-pay contract costs. Significant items in 2020
included $282 million of costs associated with COVID-19, primarily relating to the suspension of our QB2 project, and
$270 million of environmental costs, primarily relating to a decrease in the rates used to discount our decommissioning
and restoration provisions for closed operations and increased expected reclamation costs. In addition, we recorded
commodity derivative gains of $62 million and $104 million of take-or-pay contract costs. Significant items in 2019
included $49 million of negative pricing adjustments, $197 million of environmental costs primarily relating to additional
decommissioning and restoration provisions at certain closed operations, and $123 million of take-or-pay contract costs.
Sales of our products, including by-products, are recognized in revenue at the point in time when the customer obtains
control of the product. Control is achieved when a product is delivered to the customer, we have the present right
to payment for the product, significant risks and rewards of ownership have transferred to the customer according
to contract terms, and there is no unfulfilled obligation that could affect the customer’s acceptance of the product.
For sales of steelmaking coal and copper, zinc and lead concentrates, control of the product generally transfers to the
customer when an individual shipment parcel is loaded onto a carrier accepted or directly contracted by the customer.
For sales of refined metals, control of the product transfers to the customer when the product is loaded onto a carrier
specified by the customer. For blended bitumen, control of the product generally transfers to the customer when the
product passes the delivery point specified in the sales contract.
The majority of our base metal concentrates and refined metals are sold under pricing arrangements where final
prices are determined by quoted market prices in a period subsequent to sale. For these sales, revenue is recognized
based on the estimated consideration to be received at the date of sale with reference to relevant commodity market
prices. Our refined metals are sold under spot or average pricing contracts. For all steelmaking coal sales under
average pricing contracts where pricing is not finalized when revenue is recognized, revenue is recorded based on
the estimated consideration to be received at the date of sale with reference to steelmaking coal price assessments.
Management’s Discussion and Analysis
35
The majority of our blended bitumen is sold under pricing arrangements where final prices are determined based on
commodity price indices that are finalized at or near the date of sale. Our revenue for blended bitumen is net of royalty
payments to governments.
Adjustments are made to settlement receivables in subsequent periods based on movements in quoted market prices
or published price assessments (for steelmaking coal) up to the date of final pricing. These pricing adjustments result
in gains in a rising price environment and losses in a declining price environment and are recorded as other operating
income or expense. It should be noted that these effects arise on the sale of concentrates, as well as on the purchase
of concentrates at our Trail Operations.
The following table outlines our outstanding receivable positions, which were subject to provisional pricing terms at
December 31, 2021 and 2020, respectively.
(payable pounds in millions)
Pounds
US$/lb.
Pounds
US$/lb.
Copper
Zinc
156
175
$
$
4.42
1.62
132
142
$
$
3.52
1.24
Outstanding at
December 31, 2021
Outstanding at
December 31, 2020
Our finance expense includes the interest expense on our debt, on advances to QBSA from SMM/SC and on lease
liabilities, letters of credit and standby fees, interest on our pension obligations, and accretion on our decommissioning
and restoration provisions, less any interest that we capitalize against the cost of our development projects. Our finance
expense of $215 million decreased compared to 2020 as a result of an increase in borrowing costs capitalized on our
QB2 project. In 2020, we ceased capitalization of borrowing costs on QB2 while the project was temporarily suspended
and began capitalizing borrowing costs when the project remobilized. In 2021, we capitalized borrowing costs on QB2
for the full year. Debt interest expense decreased in 2019 compared to 2018, mainly due to lower outstanding debt
balances. This was partially offset by an increase in interest on lease liabilities relating to the adoption of IFRS 16, Leases
(IFRS 16) on January 1, 2019 and interest on advances to QBSA from SMM/SC relating to the QB2 partnering transaction.
Non-operating income (expense) includes items that arise from financial and other matters, and includes such items
as foreign exchange gains or losses, debt refinancing costs, gains or losses on the revaluation of debt prepayment
options, and gains or losses on the sale of investments.
In 2021, non-operating expenses included $141 million of expenses associated with QB2 variable consideration owing
to a former owner and to a holder of a carried interest. Of the $141 million, $44 million was due to the revaluation of the
financial liability for the preferential dividend stream related to ENAMI's interest in QBSA, which is most significantly
affected by copper prices and the interest rate on the subordinated loans provided by us and SMM/SC to QBSA,
which affects the timing of when QBSA repays the loans. The remaining $97 million of expense relates to a derivative
financial liability that arose from our 2018 acquisition of an additional 13.5% interest in QBSA through the purchase of
IMSA, a private Chilean company and former QBSA shareholder. The purchase price at the date of acquisition included
additional amounts that may become payable to the extent that average copper prices exceed US$3.15 per pound
in each of the first three years following commencement of commercial production, as defined in the acquisition
agreement, up to a cumulative maximum of US$100 million if commencement of commercial production occurs prior
to January 21, 2024, or up to a lesser maximum in certain circumstances thereafter. At the date of the acquisition, a
nominal value was attributed to the additional payments. At December 31, 2021, the fair value of this financial liability
increased to $98 million (US$77 million), with estimated future average copper prices expected to exceed the
US$3.15 per pound threshold and based on the expected commencement of commercial production.
In 2020, non-operating income (expense) included a gain of $56 million on the revaluation of the financial liability for
the preferential dividend stream relating to ENAMI’s interest in QBSA. This was partially offset by an $11 million loss on
the purchase of US$268 million aggregate principal amount of our outstanding notes. In 2019, non-operating expenses
included a $224 million loss on the redemption of our 8.5% notes due in 2024 and foreign exchange losses of $4 million.
36 Teck 2021 Annual Report | Purpose Driven
These losses were partially offset by a $105 million gain on the debt prepayment option in the 8.5% 2024 notes up to
the date of redemption and a gain of $37 million on the revaluation of the financial liability for the preferential dividend
stream relating to ENAMI’s interest in QBSA.
Profit (loss) attributable to non-controlling interests relates to the ownership interests that are held by third parties in
our Quebrada Blanca, Carmen de Andacollo and Elkview operations, and Compañía Minera Zafranal S.A.C.
Income Taxes
Provision for income and resource taxes was $1.6 billion, or 36% of pre-tax profit. This rate is higher than the Canadian
statutory income tax rate of 27% due generally as a result of resource taxes and higher taxes in some foreign jurisdictions.
Due to available tax pools, we are currently shielded from cash income taxes in Canada. We remain subject to cash
resource taxes in Canada and both cash income and resource taxes in foreign jurisdictions. At current commodity
prices, we expect to be accruing for current Canadian corporate income taxes starting in the first quarter of 2022.
Antamina has received income tax assessments and determinations from the Peruvian tax authority, Superintendencia
Nacional de Aduanas y de Administración Tributaria (SUNAT) for its 2013, 2014 and 2015 taxation years, denying
accelerated depreciation claimed by Antamina in respect of a mill expansion and certain other assets on the basis that
the expansion was not covered by Antamina’s tax stability agreement. Antamina is pursuing the issue in the Peruvian
courts. Based on opinions of counsel, we have provided for the tax on this issue for all years possibly affected, but not
for associated penalties and interest. The denial of accelerated depreciation claimed is a timing issue in our tax provision.
If the interest and penalties were upheld, the charge to our earnings could reach $67 million (US$53 million). Antamina
has paid all amounts of taxes, interest and penalties at issue for its 2013, 2014 and 2015 taxation years. Teck’s share
of additional amounts of taxes, interest and penalties that might be payable for assessments, which we expect will be
raised for the balance of the years in issue (2016 to 2017), is currently estimated to be $21 million (US$16 million).
Financial Position and Liquidity
Our liquidity remained strong at $6.5 billion as at December 31, 2021, including $1.4 billion of cash, of which $88 million
is in Chile for the development of the QB2 project and $38 million is held in Antamina. At December 31, 2021, the principal
balance of our term notes was US$3.5 billion and we maintained a US$4 billion undrawn revolving credit facility. As at
December 31, 2021, US$2.3 billion was outstanding under our US$2.5 billion QB2 project financing facility. In July 2021,
Antamina entered into a new US$1.0 billion loan agreement. Our 22.5% share of the loan, if fully drawn, will be
US$225 million. Proceeds from the loan have been used to repay the existing credit facilities and will be used to fund
capital expenditures going forward. The loan is non-recourse to us and the other Antamina owners and matures
in July 2026. Based on our strong financial position, we expect to be able to maintain our operations and fund our
development activities as planned.
On October 15, 2021, we converted our US$4.0 billion revolving credit facility into a sustainability-linked facility, which
involves pricing adjustments that are aligned with our sustainability performance and strategy, and extended the
maturity to October 2026. Our sustainability performance over the term of the facility is measured by greenhouse gas
intensity, the percentage of women in Teck’s workforce, and safety. In addition, on October 15, 2021, we cancelled our
US$1 billion facility that was scheduled to mature in June 2022. The US$1 billion facility was established in June 2020
during the initial months of COVID-19; market conditions and commodity prices have improved significantly since then.
At December 31, 2021, our US$4 billion facility was undrawn.
Our outstanding debt was $8.1 billion at December 31, 2021, compared with $6.9 billion at the end of 2020 and
$4.8 billion at the end of 2019. The increase in 2021 is due to a draw of US$1.1 billion on the QB2 project financing
facility and an increase in our share of Antamina loans, partially offset by the repayment of amounts drawn on our
revolving credit facility.
We maintain investment grade ratings of Baa3, BBB-, BBB- and BBB from Moody’s, S&P, Fitch and DBRS, respectively
— all with stable outlooks.
Management’s Discussion and Analysis
37
Our debt positions and credit ratios are summarized in the following table:
December 31, December 31, December 31,
2019
2020
2021
$
3,478
$
3,209
Term notes
US$4 billion of revolving credit facilities
QB2 US$2.5 billion limited recourse project finance facility
Lease liabilities
Antamina credit facilities
Other
Less unamortized fees and discounts
$
3,478
–
2,252
547
176
–
(89)
262
1,147
544
90
1
(66)
Debt (US$ in millions)
$
6,364
$
5,456
Debt (Canadian $ equivalent)1 (A)
Less cash balances
Net debt2 (B)
Equity (C)
Net-debt to net-debt-plus-equity ratio2 (B/(B+C))
Net debt to adjusted EBITDA ratio2
Weighted average coupon rate on the term notes
$
8,068
(1,427)
$
6,641
$
23,773
22%
1.0x
5.5%
$
6,947
$
$
(450)
6,497
20,708
24%
2.5x
5.5%
–
–
518
23
3
(31)
3,722
4,834
(1,026)
3,808
22,074
15%
0.9x
5.6%
$
$
$
$
Notes:
1. Translated at period end exchange rates.
2. This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
At December 31, 2021, the weighted average maturity of our term notes is approximately 15.5 years and the weighted
average coupon rate is approximately 5.47%.
Our primary sources of liquidity and capital resources are our cash and temporary investments, cash flow provided from
operations, and funds available under our committed and uncommitted bank credit facilities, of which approximately
US$4.0 billion is available. Further information about our liquidity and associated risks is outlined in Notes 29 and 31 to
our 2021 audited annual consolidated financial statements.
Cash flow from operations was $4.7 billion in 2021. Our cash position increased from $450 million at the end of 2020
to $1.4 billion at December 31, 2021. Significant outflows included $4.0 billion of capital expenditures, $667 million of
capitalized stripping costs, $160 million on investments and other asset expenditures, $335 million net repayment on
our revolving credit facilities, $106 million on returns to shareholders through dividends and $400 million of interest
and finance charges, primarily on our outstanding debt. Significant inflows during 2021 included $1.4 billion of net
proceeds from debt drawn on the QB2 project financing facility and $326 million of QB2 advances from SMM/SC.
We maintain various committed and uncommitted credit facilities for liquidity and for the issuance of letters of credit,
including a US$4.0 billion sustainability-linked facility, which was undrawn as at December 31, 2021.
Borrowing under our primary committed revolving credit facility is subject to our compliance with the covenants in the
agreement and our ability to make certain representations and warranties at the time of the borrowing request. Our
US$4.0 billion sustainability-linked facility does not contain an earnings or cash flow-based financial covenant, a credit
rating trigger or a general material adverse borrowing condition. The only financial covenant under our credit agreements
is a requirement for our net debt to capitalization ratio not to exceed 60%. That ratio was 22% at December 31, 2021.
In addition to our US$4.0 billion sustainability-linked facility, we maintain uncommitted bilateral credit facilities primarily
for the issuance of letters of credit to support our future reclamation obligations. At December 31, 2021, we had
$2.1 billion of letters of credit outstanding. We also had $840 million in surety bonds outstanding at December 31, 2021
to support current and future reclamation obligations.
38 Teck 2021 Annual Report | Purpose Driven
Under the terms of the silver streaming agreement relating to Antamina, if there is an event of default under the
agreement or Teck insolvency, Teck Base Metals Ltd., our subsidiary that holds our interest in Antamina, is restricted
from paying dividends or making other distributions to Teck to the extent that there are unpaid amounts under
the agreement. In addition, the QB2 project finance arrangements include customary restrictions on the payment
of dividends and other distributions from the project company until project completion has been achieved; such
distributions are also subject to compliance with certain other conditions.
Early repayment of borrowings under our US$4.0 billion credit facility, outstanding public debt and the QB2 project
finance arrangements may be required if an event of default under the relevant agreement occurs. In addition, we are
required to offer to repay indebtedness outstanding under our revolving credit facility and certain of our public debt
in the event of a change of control, as determined under the relevant agreements.
Capital Allocation Framework
Our capital allocation framework describes how we allocate funds to sustaining and growth capital, maintaining
solid investment grade credit metrics and returning excess cash to shareholders. This framework reflects our intention
to make additional returns to shareholders by supplementing our base dividend with at least an additional 30% of
available cash flow after certain other repayments and expenditures have been made. For this purpose, we define
available cash flow (ACF) as cash flow from operating activities after interest and finance charges, lease payments
and distributions to non-controlling interests less: (i) sustaining capital and capitalized stripping; (ii) committed growth
capital; (iii) any cash required to adjust the capital structure to maintain solid investment grade credit metrics; (iv) our
base $0.50 per share annual dividend; and (v) any share repurchases executed under our annual buyback authorization.
Proceeds from any asset sales may also be used to supplement available cash flow. Any additional cash returns will be
made through share repurchases and/or supplemental dividends depending on market conditions at the relevant time.
Our results can be highly variable, as they are dependent on commodity prices and various other factors. Investors
should not assume that there will be available cash or any supplemental returns in any given year. On February 23, 2022,
Teck’s Board declared an eligible dividend of $0.625 per share and announced an increase in our annual base dividend
to $0.50 per share. The $0.625 per share dividend consists of the increased $0.125 per share quarterly base dividend
and a supplemental dividend of $0.50 per share on our Class A common and Class B subordinate voting shares, to be
paid on March 31, 2022 to shareholders of record at the close of business on March 15, 2022. We also announced that
our Board of Directors has granted management the authority to purchase up to $100 million of Class B subordinate
voting shares annually, subject to compliance with applicable corporate and securities laws and stock exchange rules.
Additional buybacks will be considered regularly. Taking into account the new annual base dividend in 2022, the
supplemental dividend and assuming the $100 million in share repurchases, these initiatives represent approximately
$635 million in aggregate of dividends and potential share repurchases.
Operating Cash Flow
Cash flow from operations was $4.7 billion in 2021, compared with $1.6 billion in 2020 and $3.5 billion in 2019. The
increase in 2021 was primarily due to a substantial increase in our profit for the period resulting from increased prices
for our principal products, most significantly steelmaking coal. The decrease in 2020 as compared to 2019 was
primarily due to lower commodity prices, most significantly steelmaking coal, and a reduction in sales volumes as
a result of COVID-19.
Investing Activities
Expenditures on property, plant and equipment were $4.0 billion in 2021, including $2.6 billion on the QB2 project,
$563 million on growth capital and $903 million on sustaining capital. The largest component of growth capital was
$350 million spent on Neptune. The largest components of sustaining capital expenditures were $475 million at our
coal operations.
Capitalized production stripping costs were $667 million compared with $499 million in 2020. The majority of these
costs in 2021 and 2020 represent the advancement of pits for future production at our steelmaking coal operations.
Capitalized production stripping costs were higher than a year ago due mainly to a decrease in capitalized stripping in
2020 as a result of COVID-19 restrictions.
Management’s Discussion and Analysis
39
Capital expenditures for 2021 are summarized in the table on pages 46 to 47.
Expenditures on investments in 2021 were $160 million and included $125 million for intangible and other assets,
and $24 million for marketable securities.
Cash proceeds from the sale of assets and investments were $54 million in 2021, $146 million in 2020 and $80 million
in 2019.
Financing Activities
In 2021, debt proceeds totalled $1.6 billion, while debt repayments totalled $155 million. We also repaid $335 million, net, on
our revolving credit facility during the year. Debt proceeds included a drawdown of $1.4 billion on the US$2.5 billion limited
recourse project financing facility to fund the development of the QB2 project. Antamina entered into a US$1.0 billion loan
agreement during 2021 and once fully drawn, our 22.5% share of the loan will be US$225 million. As at December 31, 2021,
our share of the amount drawn was US$158 million, which is included in our debt proceeds for the year.
In 2020, debt proceeds totalled $2.4 billion, while debt repayments totalled $457 million. Debt proceeds included a
drawdown of $1.5 billion on the US$2.5 billion limited recourse project financing facility to fund the development of the
QB2 project. During the year, we drew $363 million, net, on our US$4.0 billion revolving credit facility.
In 2020, we issued US$550 million of notes due July 2030. These notes bear interest at 3.90% per annum. We used
the US$542 million of net proceeds to purchase the US$268 million aggregate principal amount of our outstanding
notes pursuant to cash tender offers and a private purchase, the latter of which had a US$13 million principal amount.
The purchased notes comprised US$104 million of 4.5% notes due 2021, US$52 million of 4.75% notes due 2022 and
US$112 million of 3.75% notes due 2023. The remainder of the proceeds were used to repay amounts drawn on our
US$4.0 billion revolving credit facility. We recorded a pre-tax loss through non-operating income (expense) of $11 million
in connection with these purchases.
In November 2019, we closed our US$2.5 billion limited recourse project financing facility to fund the development of
the QB2 project. Amounts drawn under the facility will bear interest at LIBOR plus applicable margins that vary over
time and will be repaid in 17 semi-annual installments starting the earlier of six months after project completion or
June 2023. These project finance loans are guaranteed pre-completion on a several basis by Teck, SMM and SC pro rata
to their respective interests in the Series A shares of QBSA. We have provided security in the form of QBSA’s assets,
which consist primarily of QB2 project assets. At December 31, 2019, the facility was undrawn.
On March 29, 2019, the transaction through which SMM/SC subscribed for a 30% indirect interest in QBSA closed. On
closing, SMM/SC contributed $1.3 billion (US$966 million) to the QB2 project and a further $444 million (US$336 million)
was contributed over the remainder of 2019. These contributions are made in the form of shareholder loans and share
subscriptions for equity in Quebrada Blanca Holdings SPA, which holds a 90% interest in QBSA. We retain control of
QBSA and consequently continue to consolidate its results.
In 2019, we redeemed US$600 million of our 8.5% notes that were due in 2024 for US$638 million of cash, which
included the premium paid on redemption. We recorded a pre-tax expense of $224 million on the redemption, of which
$174 million was non-cash.
Debt interest and finance charges paid during 2021 were $400 million, compared with $355 million in 2020, due to draws
on our revolving credit facility and the QB2 project financing facility during 2021.
During 2021, we paid $106 million in respect of our regular annual base dividend of $0.20 per share.
In 2021, we did not purchase any Class B subordinate voting shares under our normal course issuer bid.
40 Teck 2021 Annual Report | Purpose Driven
Quarterly Profit and Cash Flow
($ in millions except per share data)
2021
2020
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Revenue
Gross profit
Profit (loss) attributable
to shareholders
Basic earnings (loss)
per share
Diluted earnings (loss)
per share
Cash flow from operations
$ 4,406 $ 3,970 $ 2,558 $ 2,547
654
2,076
1,662
689
$ 2,560 $ 2,291 $ 1,720 $ 2,377
398
505
139
291
1,487
816
260
305
(464)
61
(149)
(312)
$ 2.79 $ 1.53 $ 0.49 $ 0.57
$
(0.87) $ 0.11 $ (0.28) $
(0.57)
1.51 $ 0.48 $ 0.57
$ 2.74 $
$ 2,098 $ 1,480 $ 575 $ 585
(0.87) $ 0.11 $ (0.28) $
$
$ 594 $ 390 $ 300 $
(0.57)
279
Gross profit from our copper business unit was $442 million in the fourth quarter compared with $368 million a year
ago. Gross profit increased by $74 million compared with a year ago primarily due to substantially higher copper
prices, partially offset by lower sales volumes, higher unit operating costs and one-time labour settlements at
Antamina and Quebrada Blanca.
Copper production in the fourth quarter was 7%, or 5,500 tonnes, lower than a year ago, primarily due to decreased
production from Carmen de Andacollo as a result of lower ore grades, as expected, and lower mill throughput.
Production at Highland Valley Copper was also slightly lower than a year ago, while Antamina remained similar and
production declined at Quebrada Blanca, as planned.
Gross profit from our zinc business unit was $217 million in the fourth quarter compared with $147 million a year ago.
Gross profit increased by $70 million compared with a year ago primarily due to higher zinc prices, partially offset by
higher royalty costs, which are tied to profitability at Red Dog.
At our Red Dog Operations, zinc and lead production in the fourth quarter decreased by 14% and 29%, respectively,
compared to a year ago. The decrease in production levels was primarily due to lower mill throughput and lower
mill recoveries as a result of unplanned maintenance. At our Trail Operations, refined zinc production was 15% lower
than a year ago, primarily due to operational issues with commissioning of equipment and unplanned maintenance.
Gross profit in the fourth quarter from our steelmaking coal business unit increased to $1.5 billion compared with a
gross profit of $36 million a year ago. Substantially higher steelmaking coal prices drove record quarterly gross profit
in our steelmaking coal business unit.
Fourth quarter sales volumes were impacted by severe weather conditions in British Columbia. Heavy rains and
flooding caused rail infrastructure damage that disrupted westbound rail service in the second half of November.
Service was partially restored in the first half of December, but did not return to full capacity prior to the end of 2021.
Extreme cold and freezing conditions in southern B.C. disrupted rail and port operations again during the last week
of December and into early 2022. These conditions improved by the second week of January. CN Rail and CPR are
making progress toward fully restoring rail service to our coal terminals, and we expect to be able to largely recover
delayed fourth quarter sales in the first half of 2022 when rail volumes return to normal.
In the fourth quarter, we had a gross loss in our energy business unit of $38 million compared with a gross loss of
$46 million a year ago. The gross loss decreased compared with a year ago primarily due to an increase in global
benchmark crude oil prices, including Western Canadian Select (WCS), partially offset by higher operating costs.
Our 21.3% share of bitumen production from Fort Hills of 21,872 barrels per day was 11% lower in the fourth quarter
compared to the same period last year. In the fourth quarter, the focus was on ramping up to full rates, with production
ramp-up safely and successfully completed in December. Fort Hills has now resumed operating as a two-train
operation and is operating at ramped-up rates. Our annual 2021 production of 19,935 barrels per day was within our
annual guidance of 18,000 to 22,300 barrels per day.
In the fourth quarter, profit attributable to shareholders was $1.5 billion, or $2.79 per share, compared with a loss to
shareholders of $464 million, or $0.87 per share, in the same period a year ago.
Management’s Discussion and Analysis
41
Cash flow from operations in the fourth quarter was $2.1 billion compared with $594 million a year ago, reflecting
the impact of substantially higher commodity prices, most significantly steelmaking coal. During the fourth quarter,
changes in working capital items resulted in a use of cash of $53 million compared with $104 million a year ago.
Outlook
The sales of our products are denominated in U.S. dollars, while a significant portion of our expenses is incurred in
local currencies, particularly the Canadian dollar and the Chilean peso. Foreign exchange fluctuations can have a
significant effect on our capital costs and operating margins, unless such fluctuations are offset by related changes
to commodity prices.
Our U.S. dollar denominated debt is subject to revaluation based on changes in the Canadian/U.S. dollar exchange rate.
As at December 31, 2021, US$2.7 billion of our U.S. dollar denominated debt is designated as a hedge against our
foreign operations that have a U.S. dollar functional currency. As a result, any foreign exchange gains or losses
arising on that amount of our U.S. dollar debt are recorded in other comprehensive income, with the remainder being
charged to profit.
Commodity markets are volatile. Prices can change rapidly and customers can alter shipment plans. This can have
a substantial effect on our business and financial results. Continued uncertainty in global markets arising from the
macroeconomic outlook and government policy changes, including tariffs and the potential for trade disputes, as well as
pandemic concerns, may have a significant positive or negative effect on the prices of the various products we produce.
We remain confident in the longer-term outlook for our major commodities; however, the extent, duration and impacts
that COVID-19 may have on demand and prices for our commodities, on our suppliers and employees and on global
financial markets in the future are uncertain and could be material.
Commodity Prices and Sensitivities
Commodity prices are a key driver of our profit and cash flows. On the supply side, the depleting nature of ore reserves,
difficulties in finding new orebodies, the permitting processes and the availability of skilled resources to develop
projects, as well as infrastructure constraints, political risk and significant cost inflation, may continue to have a
moderating effect on the growth in future production for the industry as a whole, although current high commodity
prices can be expected to generate a supply response over time.
The sensitivity of our annual profit attributable to shareholders and EBITDA to changes in the Canadian/U.S. dollar
exchange rates and commodity prices, before pricing adjustments, based on our current balance sheet, our expected 2022
mid-range production estimates, current commodity prices and a Canadian/U.S. dollar exchange rate of $1.25, is as follows:
US$ exchange
Copper (000’s tonnes)
Zinc (000’s tonnes)3
Steelmaking coal (million tonnes)
WCS (million bbl)4
WTI5
2022 Mid-Range
Production
Estimates1
Estimated Effect
of Change
on Profit2
($ in millions)
Change
Estimated
Effect on
EBITDA2,6
($ in millions)
281.5
925.0
25.0
13.2
CAD$0.01
US$0.01/lb.
US$0.01/lb.
US$1/tonne
US$1/bbl
US$1/bbl
$
$
$
$
$
4
9
18
12
8
$
$
$
$
$
7
12
28
16
11
Notes:
1. All production estimates are subject to change based on market and operating conditions.
2. The effect on our profit attributable to shareholders and on EBITDA of commodity price and exchange rate movements will vary from quarter to
quarter depending on sales volumes. Our estimate of the sensitivity of profit and EBITDA to changes in the U.S. dollar exchange rate is sensitive to
commodity price assumptions.
3. Zinc includes 277,500 tonnes of refined zinc and 647,500 tonnes of zinc contained in concentrate.
4. Bitumen volumes from our energy business unit.
5. Our WTI oil price sensitivity takes into account our interest in Fort Hills for the change in revenue, partially offset by the effect of the change in
diluent purchase costs as well as the effect on the change in operating costs across our business units, as our operations use a significant amount
of diesel fuel and our transportation contracts may contain fuel price adjustments.
6. This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
42 Teck 2021 Annual Report | Purpose Driven
Guidance
Our 2022 annual guidance is outlined in detail below.
Like others in the industry, we are seeing inflationary cost pressures, notably in diesel prices, mill steel, supplies, and
replacement parts and labour costs. The increases in the cost of certain key supplies, including mining equipment,
fuel, tires and explosives, are being driven largely by price increases for underlying commodities such as steel, crude
oil and natural gas. These price increases impacted our fourth quarter operating costs across our business units and
we expect continued upward pressure on our cash unit costs into 2022.
The recent surge in COVID-19 cases has the potential to have a negative impact on our operations. An increase in
cases in southeastern British Columbia has resulted in rising absenteeism at our steelmaking coal operations in the
Elk Valley. While the absenteeism has so far not had a major impact on productivity, the situation poses a risk to
first quarter 2022 results.
Production Guidance
We expect 2022 copper production from existing operations to be in the range of 273,000 to 290,000 tonnes with
similar production to 2021 expected across the sites. This excludes Quebrada Blanca concentrate, which is expected
to add substantially to our overall copper production following first production in the second half of 2022.
We expect 2022 production of zinc in concentrate, including co-product zinc production from our copper business
unit, to be in the range of 630,000 to 665,000 tonnes. We expect lead production from Red Dog to be in the range of
80,000 to 90,000 tonnes in 2022. In 2022, we expect Trail Operations to produce between 270,000 and 285,000 tonnes
of refined zinc. Refined lead and silver production at Trail are expected to be similar to prior years, but will fluctuate
as a result of concentrate feed source optimization.
Our steelmaking coal production is anticipated to be between 24.5 and 25.5 million tonnes in 2022. We continue to
advance mining in new areas at our Fording River, Elkview and Greenhills operations. The new areas are expected to
extend the lives of these mines and allow us to produce 26 to 27 million tonnes in the long term to continue to offset
the closure of Coal Mountain and Cardinal River operations.
We expect our share of Fort Hills’ annual production to be approximately 33,000 to 39,400 barrels per day in 2022.
The midpoint of our guidance represents an increase of approximately 80% when compared to 2021 production.
The Fort Hills partners continue to focus on cost discipline and maintaining the operating and capital cost savings
achieved in 2021, while assessing plans to further increase production to nameplate capacity as the business
environment improves.
Management’s Discussion and Analysis
43
Production Guidance
The table below shows our share of production of our principal products for 2021, our guidance for production in 2022
and our guidance for production for the following three years.
Units in thousand tonnes
(excluding steelmaking coal, molybdenum and bitumen)
2021
2022
Guidance
Three-Year
Guidance
2023–2025
Principal Products
Copper1,2,3
Highland Valley Copper
Antamina
Carmen de Andacollo
Quebrada Blanca5
Zinc1,2,4
Red Dog
Antamina
Refined zinc
Trail Operations
Steelmaking coal (million tonnes)
Bitumen (million barrels)2
Fort Hills
Other Products
Lead1
Red Dog
Molybdenum (million pounds)1,2
Highland Valley Copper
Antamina
Quebrada Blanca5
130.8
100.2
44.8
11.5
127 – 133
91 – 96
45 – 50
10 – 11
130 – 160
90 – 95
50 – 60
245 – 300
287.3
273 – 290
515 - 615
503.4
104.0
540 – 570
90 – 95
510 – 550
80 – 100
607.4
630 – 665
590 – 650
279.0
270 – 285
295 – 315
24.6
24.5 – 25.5
26.0 – 27.0
7.3
12.0 – 14.4
14.0
97.4
80 – 90
85 – 95
1.1
1.1
–
0.8 – 1.3
1.8 – 2.2
–
3.0 – 5.0
3.0 – 4.0
4.0 – 13.0
2.2
2.6 – 3.5
10.0 – 22.0
Notes:
1. Metal contained in concentrate.
2. We include 100% of production and sales from our Quebrada Blanca and Carmen de Andacollo mines in our production and sales volumes, even
though we do not own 100% of these operations, because we fully consolidate their results in our financial statements. We include 22.5% and
21.3% of production and sales from Antamina and Fort Hills, respectively, representing our proportionate ownership interest in these operations.
3. Copper production includes cathode production at Quebrada Blanca and Carmen de Andacollo.
4. Total zinc includes co-product zinc production from our 22.5% proportionate interest in Antamina.
5. 2022 copper production guidance excludes Quebrada Blanca concentrate production. Three-year guidance 2023–2025 includes Quebrada Blanca
concentrate production.
44 Teck 2021 Annual Report | Purpose Driven
Sales Guidance
The table below shows our sales of selected products for the last quarter of 2021 and our sales guidance for the first
quarter of 2022 for selected principal products.
Zinc (thousand tonnes)1
Red Dog
Steelmaking coal (million tonnes)
Note:
1. Metal contained in concentrate.
Unit Cost Guidance
Q4
2021
Q1 2022
Guidance
140
5.1
130 - 150
6.1 - 6.5
The table below reports our unit costs for 2021 and our guidance for unit costs for selected products in 2022.
(Per unit costs)
Copper1
Total cash unit costs4 (US$/lb.)
Net cash unit costs2,4 (US$/lb.)
Zinc3
Total cash unit costs4 (US$/lb.)
Net cash unit costs2,4 (US$/lb.)
Steelmaking coal4
Adjusted site cost of sales4
Transportation costs
Bitumen
Adjusted operating costs (CAD$/barrel)4
2021
1.80
1.39
0.56
0.30
65
44
2022
Guidance
1.85 – 1.95
1.40 – 1.50
0.48 – 0.53
0.32 – 0.38
72 – 77
43 – 46
47.89
26 – 30
Notes:
1.
Copper unit costs are reported in U.S. dollars per payable pound of metal contained in concentrate. Copper net cash unit costs include adjusted
cash cost of sales and smelter processing charges, less cash margins for by-products including co-products. Guidance for 2022 assumes a zinc
price of US$1.35 per pound, a molybdenum price of US$17.00 per pound, a silver price of US$22 per ounce, a gold price of US$1,700 per ounce and
a Canadian/U.S. dollar exchange rate of $1.27.
2. After co-product and by-product margins.
3. Zinc unit costs are reported in U.S. dollars per payable pound of metal contained in concentrate. Zinc net cash unit costs are mine costs including
adjusted cash cost of sales and smelter processing charges, less cash margins for by-products. Guidance for 2022 assumes a lead price of
US$0.95 per pound, a silver price of US$22 per ounce and a Canadian/U.S. dollar exchange rate of $1.27. By-products include both by-products
and co-products.
4. This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” section for further information.
Management’s Discussion and Analysis
45
Capital Expenditure Guidance
The table below reports our capital expenditures for 2021 and our guidance for capital expenditure in 2022.
(Teck’s share in $ millions)
Sustaining
Copper3
Zinc
Steelmaking coal1
Energy
Corporate
Growth2
Copper3
Zinc
Steelmaking coal
Energy
Corporate
Total
Copper
Zinc
Steelmaking coal
Energy
Corporate
QB2 capital expenditures
Total before SMM and SC contributions
Estimated SMM and SC contributions to capital expenditures
Estimated QB2 project financing draw
$
2021
184
154
475
80
10
$
903
$
$
$
103
14
440
3
3
563
287
168
915
83
13
$
$
$
$
$
2022
Guidance
340
190
750
140
5
1,425
235
35
35
–
–
305
575
225
785
140
5
$
$
1,466
2,580
1,730
$
$ 2,200 - 2,500
4,046
(401)
(1,376)
3,930 - 4,230
(630) - (730)
(315)
Total, net of partner contributions and project financing
$
2,269
$ 2,985 - 3,185
Notes:
1. Steelmaking coal sustaining capital 2022 guidance includes $280 million of water treatment capital. 2021 includes $226 million of water treatment
capital.
2. Growth expenditures include RACE21™ capital expenditures for 2022 of $50 million, of which $10 million relates to copper, $5 million relates to zinc
and $35 million relates to steelmaking coal.
3. Copper growth guidance for 2022 includes studies for HVC 2040, Antamina, QBME, Zafranal, San Nicolás and Galore Creek. Copper sustaining
capital guidance for 2022 includes Quebrada Blanca concentrate operations.
We expect our 2023 capital expenditures to decrease by approximately $2 billion compared to our planned 2022
capital expenditures.
46 Teck 2021 Annual Report | Purpose Driven
Capital Expenditure Guidance — Capitalized Stripping
(Teck’s share in CAD$ millions)
Capitalized Stripping
Copper
Zinc
Steelmaking coal
Other Information
Climate Change and Carbon Pricing
2021
207
91
369
667
2022
Guidance
$
$
250
90
480
820
$
$
As part of the ongoing efforts to address climate change, regulations to control greenhouse gas emissions continue
to be developed and enhanced in many jurisdictions. Regulatory uncertainty and resulting uncertainty regarding the
costs of the technology required to comply with current or anticipated regulations make it difficult to predict the ultimate
costs of compliance. Societal focus on controlling carbon emissions, minimizing climate change and preparing for
climate change adaptation continues to mount.
Recognizing our role in combating climate change, we continue to take action to reduce greenhouse gas emissions
by improving our energy efficiency and implementing low-carbon technologies at our operations and by working with
governments and regulators to advocate for effective and efficient carbon pricing. In February 2020, we announced
our objective to be carbon neutral across all our operations and activities by 2050. We also have a focus on growing
our copper business to further rebalance our portfolio to metals and minerals essential for low-carbon technologies,
while continuing to produce the high-quality steelmaking coal required for the low-carbon transition.
The Government of Canada advanced climate action initiatives in 2021, such as enacting the Canadian Net-Zero
Emissions Accountability Act to formalize Canada’s target to achieve net-zero greenhouse gas emissions by 2050.
The Government of Canada also progressed its A Healthy Environment and a Healthy Economy climate plan to advance
actions to achieve Canada’s climate goals, which includes the proposal to increase the federal price of carbon to
$170 per tonne of carbon dioxide-equivalent (CO2e) by 2030. Finally, the Government of Canada formally submitted
Canada’s enhanced Nationally Determined Contribution to the United Nations, committing Canada to cut its
greenhouse gas emissions by 40%–45% below 2005 levels by 2030.
In 2021, British Columbia’s carbon tax under the Carbon Tax Act increased to $45 per tonne of CO2e and is set to
increase to $50 per tonne of CO2e in 2022. British Columbia also continues to implement the CleanBC Program for
Industry to address impacts on emissions-intensive, trade-exposed industries to ensure that B.C. operations maintain
their competitiveness and that carbon leakage is avoided.
Alberta’s Technology Innovation and Emissions Reduction (TIER) system implements carbon pricing for large industrial
facilities in Alberta with CO2e emissions in excess of 100,000 tonnes per year, which includes our Fort Hills mine. Large
industrial emitters were required to reduce emissions by 10% in 2020 and are required to reduce emissions by a further
1% reduction per year thereafter. Emissions above the target will be assessed at the then-prevailing carbon price.
In 2021, the carbon price under the system was increased to $40 per tonne of CO2e.
B.C.’s Carbon Tax Act and the large industrial emitter provisions of the Alberta TIER system are considered substantially
similar to the federal Greenhouse Gas Pollution Pricing Act, and therefore our B.C. and Alberta operations are not
subject to the federal Greenhouse Gas Pollution Pricing Act. However, effective January 1, 2020, the federal carbon
tax on greenhouse gas emissions resulting from the combustion of fossil fuels for certain purposes applied to our
Alberta operations.
While climate change regulations continue to evolve in most jurisdictions in which we operate, we expect that regional,
national or international regulations that seek to reduce greenhouse gas emissions will continue to be established or
Management’s Discussion and Analysis
47
revised. The cost of reducing our emissions or of obtaining the equivalent amount of credits or offsets in the future,
if regulations permit this, remains uncertain. The cost of compliance with various climate change regulations will
ultimately be determined by the regulations themselves and by the markets that evolve for carbon credits and offsets.
Teck’s Scope 1 and 2 greenhouse gas emissions attributable to our operations for 2021 are estimated to be approximately
2.9 million tonnes (CO2e). The most material indirect emissions associated with our activities are those from the use of
our steelmaking coal by our customers. Based on our 2021 sales volumes, emissions from the use of our steelmaking
coal would have been approximately 69 million tonnes of CO2.
We may in the future face similar taxation for our activities in other jurisdictions. Similarly, customers of some of our
products may also be subject to new carbon costs or taxation in the future in the jurisdictions where the products are
ultimately used.
For 2021, our B.C.-based operations incurred $81.7 million in British Columbia provincial carbon tax. Our Cardinal River
Operations paid $0.4 million in carbon costs, and our Fort Hills mine incurred approximately $12.4 million (100% basis)
in carbon costs under the Alberta TIER system. As a result of the CleanBC Program for Industry, we recently received
back $10.6 million of the $66.7 million we paid under the British Columbia provincial carbon tax in 2020, and we expect
to receive a similar portion of our 2021 expenditures back in 2022.
Financial Instruments and Derivatives
We hold a number of financial instruments, derivatives and contracts containing embedded derivatives, which are
recorded on our consolidated balance sheet at fair value with gains and losses in each period included in other
comprehensive income (loss) in the year and profit for the period on our consolidated statements of income and
consolidated statements of other comprehensive income, as appropriate. The most significant of these instruments
are investments in marketable securities, metal-related forward contracts including those embedded in our silver and
gold streaming arrangements, QB2 variable consideration to IMSA and settlement receivables. All are subject to varying
rates of taxation, depending on their nature and jurisdiction. Further information about our financial instruments,
derivatives and contracts containing embedded derivatives and associated risks is outlined in Note 29 to our 2021
audited annual consolidated financial statements.
Areas of Judgment and Critical Accounting Estimates
In preparing our consolidated financial statements, we make judgments in applying our accounting policies. The
judgments that have the most significant effect on the amounts recognized in our financial statements are outlined
below. In addition, we make assumptions about the future in deriving estimates used in preparing our consolidated
financial statements. We have outlined information below about assumptions and other sources of estimation
uncertainty as at December 31, 2021 that have a risk of resulting in a material adjustment to the carrying amounts
of assets and liabilities within the next year.
a) Areas of Judgment
Assessment of Impairment and Impairment Reversal Indicators
Judgment is required in assessing whether certain factors would be considered an indicator of impairment or
impairment reversal. We consider both internal and external information to determine whether there is an indicator of
impairment or impairment reversal present and, accordingly, whether impairment testing is required. The information
we consider in assessing whether there is an indicator of impairment or impairment reversal includes, but is not limited
to, market transactions for similar assets, commodity prices, treatment charges, interest rates, foreign exchange rates,
our market capitalization, reserves and resources, mine plans and operating results.
In the fourth quarter of 2021, as a result of higher market expectations for long-term copper prices, we performed an
impairment reversal test for our Carmen de Andacollo CGU under the requirements of IAS 36, Impairment of Assets.
In addition, mine plans with updated information for Fort Hills became available in the fourth quarter of 2021, which
required us to perform an impairment test on our Fort Hills CGU.
In the fourth quarter of 2020, updated mine plans for Fort Hills became available, reflecting an earlier-than-planned
restart of the second train of operations, and including operating and capital cost reductions over the life of mine.
These updates to the mine plans indicated a change in the valuation of the asset. This, combined with macroeconomic
48 Teck 2021 Annual Report | Purpose Driven
conditions, including the cost of capital for oil assets and lower market expectations for long-term Western Canadian
Select (WCS) heavy oil prices, required us to perform an impairment test for our Fort Hills CGU.
During the first quarter of 2020, as a result of then-lower market expectations of WCS heavy oil prices over the next three
years, combined with reduced production in the near term, we performed an impairment test for our interest in Fort Hills.
Refer to the “Impairment Testing” section below for further detail on our impairment testing in 2021 and 2020.
Property, Plant and Equipment – Determination of Available for Use Date
Judgment is required in determining the date that property, plant and equipment is available for use. An asset is
available for use when it is in the location and condition necessary to operate in the manner intended by management.
We considered several factors in making the determination of when the Neptune port upgrade project was available for
use including, but not limited to, design capacity of the asset, throughput levels achieved, capital spending remaining
and commissioning status. As at September 30, 2021, based on assessment of relevant factors, the Neptune port
upgrade project was considered available for use. We commenced depreciation of the asset and ceased capitalization
of borrowing costs as of the date the asset was available for use.
Joint Arrangements
We are a party to a number of arrangements over which we do not have control. Judgment is required in determining
whether joint control over these arrangements exists and, if so, which parties have joint control and whether each
arrangement is a joint venture or a joint operation. In assessing whether we have joint control, we analyze the activities
of each arrangement and determine which activities most significantly affect the returns of the arrangement over its
life. These activities are determined to be the relevant activities of the arrangement. If unanimous consent is required
over the decisions about the relevant activities, the parties whose consent is required would have joint control over the
arrangement. The judgments around which activities are considered the relevant activities of the arrangement are
subject to analysis by each of the parties to the arrangement and may be interpreted differently. When performing this
assessment, we generally consider decisions about activities such as managing the asset while it is being designed,
developed and constructed, during its operating life and during the closure period. We may also consider other
activities, including the approval of budgets, expansion and disposition of assets, financing, significant operating and
capital expenditures, appointment of key management personnel, representation on the board of directors and other
items. When circumstances or contractual terms change, we reassess the control group and the relevant activities
of the arrangement.
If we have joint control over the arrangement, an assessment of whether the arrangement is a joint venture or a joint
operation is required. This assessment is based on whether we have rights to the assets, and obligations for the
liabilities, relating to the arrangement or whether we have rights to the net assets of the arrangement. In making this
determination, we review the legal form of the arrangement, the terms of the contractual arrangement and other facts
and circumstances. In a situation where the legal form and the terms of the contractual arrangement do not give us
rights to the assets and obligations for the liabilities, an assessment of other facts and circumstances is required,
including whether the activities of the arrangement are primarily designed for the provision of output to the parties and
whether the parties are substantially the only source of cash flows contributing to the arrangement. The consideration
of other facts and circumstances may result in the conclusion that a joint arrangement is a joint operation. This
conclusion requires judgment and is specific to each arrangement. Other facts and circumstances have led us to
conclude that Antamina and Fort Hills are joint operations for the purposes of our consolidated financial statements.
The other facts and circumstances considered for both of these arrangements include the provision of output to the
parties of the joint arrangements and the funding obligations. For both Antamina and Fort Hills, we will take our share
of the output from the assets directly over the life of the arrangement. We have concluded that this gives us direct
rights to the assets and obligations for the liabilities of these arrangements proportionate to our ownership interests.
Streaming Transactions
When we enter into a long-term streaming arrangement linked to production at specific operations, judgment is
required in assessing the appropriate accounting treatment for the transaction on the closing date and in future
periods. We consider the specific terms of each arrangement to determine whether we have disposed of an interest in
the reserves and resources of the respective operation or executed some other form of arrangement. This assessment
considers what the counterparty is entitled to and the associated risks and rewards attributable to them over the life
of the operation. These include the contractual terms related to the total production over the life of the arrangement
Management’s Discussion and Analysis
49
as compared to the expected production over the life of the mine, the percentage being sold, the percentage of
payable metals produced, the commodity price referred to in the ongoing payment and any guarantee relating to the
upfront payment if production ceases.
For our silver and gold streaming arrangements at Antamina and Carmen de Andacollo, respectively, there is no
guarantee associated with the upfront payment. We have concluded that control of the rights to the silver and gold
mineral interests were transferred to the buyers when the contracts came into effect. Therefore, we consider these
arrangements a disposition of a mineral interest.
Based on our judgment, control of the interest in the reserves and resources transferred to the buyer when the
contracts were executed. At that time, we recognized the amount of the gain related to the disposition of the reserves
and resources, as we had the right to payment, the customer was entitled to the commodities, the buyer had no
recourse in requiring Teck to mine the product and the buyer had significant risks and rewards of ownership of the
reserves and resources.
We recognize the amount of consideration related to refining, mining and delivery services as the work is performed.
Deferred Tax Assets and Liabilities
Judgment is required in assessing whether deferred tax assets and certain deferred tax liabilities are recognized on the
balance sheet and what tax rate is expected to be applied in the year when the related temporary differences reverse.
We also evaluate the recoverability of deferred tax assets based on an assessment of our ability to use the underlying
future tax deductions before they expire against future taxable profits or capital gains. Deferred tax liabilities arising from
temporary differences on investments in subsidiaries, joint ventures and associates are recognized unless the reversal
of the temporary differences is not expected to occur in the foreseeable future and can be controlled. Judgment is
also required on the application of income tax legislation. These judgments are subject to risk and uncertainty and
could result in an adjustment to the deferred tax provision and a corresponding credit or charge to profit (loss).
b) Sources of Estimation Uncertainty
Impairment Testing
When impairment testing is required, discounted cash flow models are used to determine the recoverable amount
of respective assets. These models are prepared internally or with assistance from third-party advisors when required.
When relevant market transactions for comparable assets are available, these are considered in determining the
recoverable amount of assets. Significant assumptions used in preparing discounted cash flow models include
commodity prices, reserves and resources, mine production, operating costs, capital expenditures, discount rates and
foreign exchange rates. The impairment testing section below outlines the significant inputs used when performing
goodwill and other asset impairment testing in 2021 and 2020. These inputs are based on management’s best estimates
of what an independent market participant would consider appropriate. Changes in these inputs may alter the results
of impairment testing, the amount of the impairment charges or reversals recorded in the statement of income (loss)
and the resulting carrying values of assets.
We allocate goodwill arising from business combinations to the cash-generating unit (CGU) or group of CGUs acquired
that is expected to receive the benefits from the business combination. When performing annual goodwill impairment
tests, we are required to determine the recoverable amount of each CGU or group of CGUs to which goodwill has been
allocated. Our Quebrada Blanca CGU and steelmaking coal group of CGUs have goodwill allocated to them. The
recoverable amount of each CGU or group of CGUs is determined as the higher of its fair value less costs of disposal
(FVLCD) and its value in use.
Impairment Reversal and (Asset Impairment)
($ in millions)
Carmen de Andacollo CGU
Fort Hills CGU
Total
50 Teck 2021 Annual Report | Purpose Driven
2021
2020
$
$
215
–
215
$
–
(1,244)
$
(1,244)
Impairment Reversal and (Asset Impairment) — 2021
During 2021, we assessed whether there were any indicators of impairment reversal or impairment for our assets and
did not identify any matters requiring us to perform an impairment or impairment reversal test, with the exception of
the Carmen de Andacollo CGU and the Fort Hills CGU, as outlined below.
Carmen de Andacollo CGU
In the fourth quarter of 2021, as a result of higher market expectations for long-term copper prices, we recorded a pre-tax
impairment reversal of $215 million (after-tax $150 million) related to our Carmen de Andacollo CGU. The estimated
post-tax recoverable amount was significantly higher than the carrying value. The impairment reversal affects the profit
(loss) of our copper operating segment.
Fort Hills CGU
In the fourth quarter of 2021, as a result of updated mine plans for Fort Hills, we performed an impairment test on our
Fort Hills CGU as at December 31, 2021. Using a long-term WCS heavy oil price of US$48 per barrel, a long-term
Canadian to U.S. dollar foreign exchange rate of CAD$1.28 to US$1.00 and an 8% real, post-tax discount rate resulted
in a recoverable amount of $2.1 billion, which approximated our carrying value as at December 31, 2021. Cash flow
projections used in the analysis as at December 31, 2021 were based on a life of mine plan with cash flows covering a
period of 37 years.
The key inputs used in our determination of recoverable amounts interrelate significantly with each other and with
our operating plans. For example, a decrease in long-term commodity prices could result in amendments to the mine
plans that would partially offset the effect of lower prices through lower operating and capital costs. It is difficult to
determine how all of these factors would interrelate, but in estimating the effect of changes in these assumptions on
fair values, we believe that all of these factors need to be considered together. A linear extrapolation of these effects
becomes less meaningful as the change in assumption increases.
The valuation of our Fort Hills CGU is most sensitive to changes in WCS heavy oil prices, Canadian/U.S. dollar exchange
rates and discount rates. Based on the discounted cash flow model used to determine the recoverable amount as at
December 31, 2021, ignoring the above-described interrelationships, a US$1 change in the real long-term WCS heavy
oil price would result in a change in the recoverable amount of $100 million. A $0.01 change in the Canadian dollar
against the U.S. dollar would result in a change in the recoverable amount of approximately $30 million. A 25 basis point
change in the discount rate would result in a change in the recoverable amount of approximately $50 million.
Asset Impairment — 2020
Fort Hills CGU
During 2020, we recorded a pre-tax impairment of $597 million (after-tax $438 million) in the fourth quarter and a
pre-tax impairment of $647 million (after-tax $474 million) in the first quarter related to our Fort Hills CGU. The
estimated post-tax recoverable amounts of our Fort Hills CGU of $2.1 billion in the fourth quarter and $2.5 billion in the
first quarter were lower than our carrying value. These impairments arose as a result of updated mine plans indicating
a change in the valuation of the asset combined with macroeconomic conditions and the then-lower market
expectations of WCS heavy oil prices over the next three years.
Annual Goodwill Impairment Testing
In 2021, we performed our annual goodwill impairment testing at October 31, 2021 and did not identify any goodwill
impairment losses.
Given the nature of expected future cash flows used to determine the recoverable amount, a material change could
occur over time, as the cash flows are significantly affected by the key assumptions described below.
Sensitivity Analysis
The recoverable amounts of our steelmaking coal group of CGUs and our Quebrada Blanca CGU both exceeded their
carrying amounts at the date of our annual goodwill impairment testing. There are no reasonably possible changes to any
of the below key assumptions, which would lead to either of the carrying amounts exceeding their recoverable amounts.
Management’s Discussion and Analysis
51
Key Assumptions
The following are the key assumptions used in our impairment testing calculations for the years ended December 31,
2021 and 2020:
WCS heavy oil prices per barrel
Steelmaking coal prices per tonne
Copper prices per pound
2021
2020
Long-term real price in 2026
of US$48
Long-term real price in 2025
of US$46
Long-term real price in 2026
of US$150
Long-term real price in 2025
of US$150
Long-term real price in 2026
of US$3.30
Long-term real price in 2025
of US$3.00
Post-tax real discount rates
6%—8%
6%—8%
Long-term foreign exchange rates
1 U.S. to 1.28 Canadian dollars
1 U.S. to 1.30 Canadian dollars
Commodity Prices
Commodity price assumptions use current prices in the initial year and trend to the long term prices in the table above.
Prices are based on a number of factors, including forward curves in the near term and are benchmarked with external
sources of information, including information published by our peers and market transactions, where possible, to ensure
they are within the range of values used by market participants.
Discount Rates
Discount rates are based on market participant mining and oil sands weighted average costs of capital adjusted for
risks specific to the operation or asset where appropriate.
Foreign Exchange Rates
Foreign exchange rates are benchmarked with external sources of information based on a range used by market participants.
Reserves and Resources and Mine Production
Future mineral and oil production is included in projected cash flows based on plant capacities and mineral and oil
reserve and resource estimates and related exploration and evaluation work undertaken by appropriately qualified
persons or qualified reserves evaluators.
Operating Costs and Capital Expenditures
Operating costs and capital expenditures are based on life of mine plans and internal management forecasts. Cost
estimates incorporate management experience and expertise, current operating costs, the nature and location of
each operation and the risks associated with each operation. Future capital expenditures are based on management’s
best estimate of expected future capital requirements, with input from management’s experts where appropriate. All
committed and anticipated capital expenditures based on future cost estimates have been included in the projected
cash flows. Operating cost and capital expenditure assumptions are subject to ongoing optimization and review
by management.
Recoverable Amount Basis
In the absence of a relevant market transaction, we estimate the recoverable amount of our CGU or group of CGUs on a
FVLCD basis using a discounted cash flow methodology, taking into account assumptions likely to be made by market
participants unless it is expected that the value in use methodology would result in a higher recoverable amount. For the
asset impairment, impairment reversal and goodwill impairment analyses performed in 2021 and 2020, we have applied
the FVLCD basis.
52 Teck 2021 Annual Report | Purpose Driven
Estimated Recoverable Reserves and Resources
Mineral and oil reserve and resource estimates are based on various assumptions relating to operating matters as
set forth in National Instrument 43-101, Standards of Disclosure for Mineral Projects and National Instrument 51-101,
Standards of Disclosure for Oil and Gas Activities. Assumptions used include production costs, mining and processing
recoveries, cut-off grades, sales volumes, long-term commodity prices, exchange rates, inflation rates, tax and royalty
rates and capital costs. Cost estimates are based on prefeasibility or feasibility study estimates or operating history.
Estimates are prepared by or under the supervision of appropriately qualified persons, or qualified reserves evaluators,
but will be affected by forecasted commodity prices, inflation rates, exchange rates, capital and production costs and
recoveries, among other factors. Estimated recoverable reserves and resources are used in performing impairment
testing, to determine the depreciation of property, plant and equipment at operating mine sites, in accounting for
capitalized production stripping costs and also in forecasting the timing of settlement of decommissioning and
restoration costs. Changes in reserve and resource estimates are most significant to estimating the recoverable
amount in impairment tests.
Decommissioning and Restoration Provisions
Decommissioning and restoration provisions (DRPs) are based on future cost estimates using information available at
the balance sheet date that are developed by management’s experts. DRPs represent the present value of estimated
costs of future decommissioning and other site restoration activities, including costs associated with the management
of water and water quality in and around each closed site. DRPs are adjusted at each reporting period for changes to
factors such as the expected amount of cash flows required to discharge the liability, the timing of such cash flows
and the credit-adjusted discount rate. DRPs require significant estimates and assumptions, including the requirements
of the relevant legal and regulatory framework and the timing, extent and costs of required decommissioning and
restoration activities. Our estimates of the costs associated with the management of water and water quality in and
around each closed site include assumptions with respect to the volume and location of water to be treated, the
methods used to treat the water and the related water treatment costs. To the extent the actual costs differ from
these estimates, adjustments will be recorded and the statement of income (loss) may be affected.
Provision for Income Taxes
We calculate current and deferred tax provisions for each of the jurisdictions in which we operate. Actual amounts
of income tax expense are not final until tax returns are filed and accepted by the relevant authorities. This occurs
subsequent to the issuance of our financial statements and the final determination of actual amounts may not be
completed for a number of years. Therefore, profit (loss) in subsequent periods will be affected by the amount that
estimates differ from the final tax return.
Deferred Tax Assets and Liabilities
Assumptions about the generation of future taxable profits and repatriation of retained earnings depend on
management’s estimates of future production and sales volumes, commodity prices, reserves and resources,
operating costs, decommissioning and restoration costs, capital expenditures, dividends and other capital
management transactions. These estimates could result in an adjustment to the deferred tax provision and a
corresponding adjustment to profit (loss).
c) Effects of COVID-19
In March 2020, the World Health Organization declared a pandemic related to COVID-19 and the impacts on global
commerce have been far-reaching. We continue to act to protect the safety and health of our employees, contractors
and the communities in which we operate in accordance with guidance from governments and public health
authorities. These measures, combined with commodity market fluctuations, significantly affected our financial
results for 2020. There are ongoing challenges associated with COVID-19. Operating our mines at full production
and continuing construction on our QB2 project in a COVID-19 environment increases certain costs for medical
testing, safety equipment, safety supplies and additional transportation and accommodation for social distancing,
among other things.
Management’s Discussion and Analysis
53
In 2021, we continued to maintain the safety of our workforce and the communities in which we operate while mitigating
the operational impacts on our business. Throughout 2021, we continued to incur costs to operate with enhanced
protocols in place. However, these expenditures are considered a cost of operating in this environment and for the
year ended December 31, 2021, we did not record any amounts specifically identified as COVID-19 costs in other
operating income (expense).
In 2020, we applied judgment in determining when to suspend the capitalization of borrowing costs associated with
QB2, which corresponded with the suspension of active development of the project. We similarly applied judgment to
determine when active development of the project resumed and we recommenced capitalization of borrowing costs
at that date. We suspended capitalization of borrowing costs for QB2 at the end of the first quarter of 2020, and we
recommenced capitalization of borrowing costs on the project in the third quarter of 2020 consistent with the return
to active construction.
For the year ended December 31, 2020, we expensed costs of approximately $434 million relating primarily to the
suspension of construction and remobilization of our QB2 project, of which $282 million was recorded as COVID-19
costs in other operating income (expense) and $103 million relates to interest that would have been capitalized if QB2
had not been suspended. Of the remaining $49 million, $41 million was recorded in cost of sales as a result of reduced
production levels at our operations and $8 million was recorded as social responsibility and donations in other
operating income (expense).
Further information on the impact of COVID-19 on our adjusted profit attributable to shareholders can be found in the
Financial Overview section of this Management’s Discussion and Analysis.
Adoption of New Accounting Standards and Accounting Developments
New IFRS Pronouncements
Amendments to IAS 16 – Property, Plant and Equipment: Proceeds before Intended Use
In May 2020, the IASB issued amendments to IAS 16, Property, Plant and Equipment (IAS 16). The amendments prohibit
a company from deducting from the cost of property, plant and equipment amounts received from selling items
produced while the company is preparing the asset for its intended use. Instead, a company will recognize such sales
proceeds and related costs in profit (loss). An entity is required to apply these amendments for annual reporting
periods beginning on or after January 1, 2022. The amendments are applied retrospectively only to items of property,
plant and equipment that are available for use after the beginning of the earliest period presented in the financial
statements in which the entity first applies the amendments.
As at December 31, 2021, we have completed our analysis of these amendments and have determined that there will
be no retrospective effect on our 2021 financial results on adoption of the amendments. Since the amendments were
effective from January 1, 2022, we expect them to have an effect on the accounting related to the sale of products
during the commissioning phase of our Quebrada Blanca Phase 2 project (QB2).
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Interest Rate Benchmark Reform – Phase 2
In August 2020, the IASB issued amendments to IFRS 9, Financial Instruments (IFRS 9), IAS 39, Financial Instruments:
Recognition and Measurement (IAS 39), IFRS 7, Financial Instruments: Disclosures (IFRS 7), IFRS 4, Insurance Contracts
(IFRS 4) and IFRS 16, as a result of Phase 2 of the IASB’s Interest Rate Benchmark Reform project. The amendments
address issues arising in connection with reform of benchmark interest rates, including the replacement of one
benchmark rate with an alternative one. The amendments were effective January 1, 2021.
For the year ended December 31, 2021, these amendments did not affect our financial statements, as we have not
yet transitioned any agreements that are exposed to USD London Interbank Offered Rate (LIBOR) to an alternative
benchmark interest rate. Language was included in our sustainability-linked revolving credit facility when we extended
its maturity in 2021, which references the Term Secured Overnight Financing Rate (Term SOFR) as the replacement
rate for LIBOR. Term SOFR was formally recommended by the Alternative Reference Rates Committee (a committee
convened by the U.S. Federal Reserve Board) as the recommended fallback for LIBOR-based loans. Term SOFR is
54 Teck 2021 Annual Report | Purpose Driven
expected to be economically equivalent to LIBOR, allowing for use of the practical expedient under IFRS 9. We continue
to work with our lenders on the replacement of the affected rates for our other significant financial instruments, which
is not expected to result in a significant change in our interest rate risk management strategy or our interest rate risk.
Our sustainability-linked revolving credit facility, QB2 project financing facility, Antamina loan agreement and QB2
advances from SMM/SC are our most significant financial instruments that are exposed to LIBOR. These financial
instruments are based on LIBOR settings that are currently scheduled to cease publication after June 30, 2023. We will
continue to monitor developments on alternative benchmark interest rates and we expect to transition to alternative
rates as widespread market practice is established.
Amendments to IAS 12 – Income Taxes
In May 2021, the IASB issued amendments to IAS 12, Income Taxes (IAS 12). The amendments will require companies
to recognize deferred tax on particular transactions that, on initial recognition, give rise to equal amounts of taxable
and deductible temporary differences. The proposed amendments will typically apply to transactions such as leases
for the lessee and decommissioning and restoration obligations related to assets in operation. An entity is required
to apply these amendments for annual reporting periods beginning on or after January 1, 2023. Early application
is permitted. The amendments are applied to transactions that occur on or after the beginning of the earliest
comparative period presented.
These amendments do not have an effect on our financial statements, as we currently follow the accounting treatment
proposed by the amendments. Therefore, we have early-adopted these amendments on January 1, 2022.
Outstanding Share Data
As at February 23, 2022, there were approximately 526.9 million Class B subordinate voting shares and 7.8 million Class A
common shares outstanding. In addition, there were approximately 22.7 million share options outstanding with exercise
prices ranging between $5.34 and $39.30 per share. More information on these instruments, and the terms of their
conversion, is set out in Note 24 to our 2021 audited annual consolidated financial statements.
The Toronto Stock Exchange (TSX) accepted our notice of intention to make a normal course issuer bid (NCIB) to
purchase up to 40 million Class B shares during the period starting November 2, 2021 and ending November 2, 2022,
representing approximately 7.6% of the outstanding Class B shares, or 8.6% of the public float, as at October 20, 2021.
Teck is making the normal course issuer bid because it believes that the market price of its Class B subordinate voting
shares may, from time to time, not reflect their underlying value and that the share buyback program may provide
value by reducing the number of shares outstanding at attractive prices. Any purchases made under the NCIB will be
through the facilities of the TSX, the New York Stock Exchange or other alternative trading systems in Canada and the
United States, if eligible, or by such other means as may be permitted under applicable securities laws, including
private agreements under an issuer bid exemption order or block purchases in accordance with applicable regulations.
Any purchases made by way of private agreement under an applicable exemption order issued by a securities
regulatory authority may be at a discount to the prevailing market price, as provided for in such exemption order.
Under the TSX rules, except pursuant to permitted exceptions, the number of Class B Shares purchased on the TSX on
any given day will not exceed 658,302 Class B Shares, which is 25% of the average daily trading volume for the Class B
Shares on the TSX during the six-month period ended September 30, 2021 of 1,973,581, calculated in accordance
with the TSX rules. The actual number of Class B Shares to be purchased and the timing of any such purchases will
generally be determined by us from time to time as market conditions warrant. In addition, we may from time to time
repurchase Class B Shares under an automatic securities repurchase plan, which will enable purchases during times
when we would typically not be permitted to purchase our shares due to regulatory or other reasons. All repurchased
shares will be cancelled. During Teck’s previous normal course issuer bid, which commenced on November 2, 2020,
and ended on November 1, 2021, Teck did not purchase any Class B subordinate voting shares. Security holders may
obtain a copy of the notice of intention, without charge, by request directed to the attention of our Corporate Secretary,
at our offices located at Suite 3300–550 Burrard Street, Vancouver, British Columbia, V6C 0B3.
Management’s Discussion and Analysis
55
Contractual and Other Obligations
($ in millions)
Less than
1 Year
2–3
Years
4–5
Years
More than
5 Years
Total
Debt – Principal and interest payments
$
Leases – Principal and interest payments1
Minimum purchase obligations2
Concentrate, equipment,
supply and other purchases
Shipping and distribution
Energy contracts
NAB PILT and VIF payments7
Pension funding3
Other non-pension
post-retirement benefits4
Decommissioning and
restoration provision5
Other long-term liabilities6
490
162
988
367
289
47
20
13
144
66
$
1,431
$
1,473
$
8,501
$ 11,895
201
181
642
1,186
997
567
881
93
—
28
271
87
230
532
899
95
—
30
170
66
29
915
5,758
58
—
2,244
2,381
7,827
293
20
349
420
3,140
79
3,725
298
$
2,586
$
4,556
$
3,676
$
19,471
$ 30,289
Notes:
1. We lease road and port facilities from the Alaska Industrial Development and Export Authority, through which it ships metal concentrates
produced at the Red Dog mine. Minimum lease payments are US$6 million for the following 18 years and are subject to deferral and abatement for
force majeure events.
2. The majority of our minimum purchase obligations are subject to continuing operations and force majeure provisions.
3. As at December 31, 2021, the company had a net pension asset of $352 million, based on actuarial estimates prepared on a going concern basis.
The amount of minimum funding for 2022 in respect of defined benefit pension plans is $20 million. The timing and amount of additional funding
after 2022 is dependent upon future returns on plan assets, discount rates and other actuarial assumptions.
4. We had a discounted, actuarially determined liability of $420 million in respect of other non-pension post-retirement benefits as at December 31,
2021. Amounts shown are estimated expenditures in the indicated years.
5. We accrue environmental and reclamation obligations over the life of our mining operations, and amounts shown are estimated expenditures in
the indicated years at fair value, assuming credit-adjusted risk-free discount rates between 3.86% and 5.35% and an inflation factor of 2.00%.
6. Other long-term liabilities include amounts for post-closure, environmental costs and other items.
7. On April 25, 2017, Teck Alaska entered into a 10-year agreement with the Northwest Arctic Borough (NAB) for payments in lieu of taxes (PILT).
Payments under the agreement are based on a percentage of land, buildings and equipment at cost less accumulated depreciation. The effective
date of this agreement was January 1, 2016 and this agreement expires on December 31, 2025. On April 25, 2017, Teck Alaska entered into a 10-year
agreement with the NAB for payments to a village improvement fund (VIF). Payments under the agreement are based on a percentage of earnings
before income taxes, with 2017–2025 having minimum payments of $4 million and maximum payments of $8 million. The effective date of this
agreement was January 1, 2016 and this agreement expires on December 31, 2025.
Disclosure Controls and Internal Control Over Financial Reporting
Disclosure Controls and Procedures
Disclosure controls and procedures are designed to provide reasonable assurance that information required to be
disclosed in reports filed or submitted by us under U.S. and Canadian securities legislation is recorded, processed,
summarized and reported within the time periods specified in those rules, and include controls and procedures
designed to ensure that information required to be disclosed in reports filed or submitted by us under U.S. and
Canadian securities legislation is accumulated and communicated to management, including the Chief Executive
Officer and Chief Financial Officer, as appropriate, to permit timely decisions regarding required disclosure.
Management, including the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of
the design and operation of our disclosure controls and procedures, as defined in the rules of the U.S. Securities
and Exchange Commission and the Canadian Securities Administrators, as at December 31, 2021. Based on this
evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and
procedures were effective as at December 31, 2021.
56 Teck 2021 Annual Report | Purpose Driven
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
Any system of internal control over financial reporting, no matter how well-designed, has inherent limitations.
Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation. Most of our corporate office staff and many site administrative
staff worked remotely through 2021. We have retained documentation in electronic form as a result of remote work
through this period. There have been no significant changes in our internal controls during the year ended
December 31, 2021 that have materially affected, or are reasonably likely to materially affect, internal control over
financial reporting.
Management has used the Committee of Sponsoring Organizations of the Treadway Commission (COSO) 2013
framework to evaluate the effectiveness of our internal control over financial reporting. Based on this
assessment, management has concluded that as at December 31, 2021, our internal control over financial
reporting was effective.
The effectiveness of our internal controls over financial reporting has been audited by PricewaterhouseCoopers LLP,
an independent registered public accounting firm, who have expressed their opinion in their report included with our
annual consolidated financial statements.
Use of Non-GAAP Financial Measures and Ratios
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
and non-GAAP ratios which are not measures recognized under IFRS in Canada and that do not have a standardized
meaning prescribed by IFRS or by Generally Accepted Accounting Principles (GAAP) in the United States.
The non-GAAP financial measures and non-GAAP ratios described below do not have standardized meanings under
IFRS, may differ from those used by other issuers, and may not be comparable to similar financial measures and ratios
reported by other issuers. These financial measures and ratios have been derived from our financial statements and
applied on a consistent basis as appropriate. We disclose these financial measures and ratios because we believe they
assist readers in understanding the results of our operations and financial position and provide further information
about our financial results to investors. These measures should not be considered in isolation or used in substitute for
other measures of performance prepared in accordance with IFRS.
Adjusted profit attributable to shareholders: For adjusted profit attributable to shareholders, we adjust profit
attributable to shareholders as reported to remove the after-tax effect of certain types of transactions that reflect
measurement changes on our balance sheet or are not indicative of our normal operating activities.
EBITDA: EBITDA is profit before net finance expense, provision for income taxes, and depreciation and amortization.
Adjusted EBITDA: Adjusted EBITDA is EBITDA before the pre-tax effect of the adjustments that we make to adjusted
profit attributable to shareholders as described above.
Adjusted profit attributable to shareholders, EBITDA and Adjusted EBITDA highlight items and allow us and readers to
analyze the rest of our results more clearly. We believe that disclosing these measures assists readers in understanding
the ongoing cash-generating potential of our business in order to provide liquidity to fund working capital needs,
service outstanding debt, fund future capital expenditures and investment opportunities, and pay dividends.
Gross profit before depreciation and amortization: Gross profit before depreciation and amortization is gross profit
with depreciation and amortization expense added back. We believe this measure assists us and readers to assess
our ability to generate cash flow from our business units or operations.
Unit costs: Unit costs for our steelmaking coal operations are total cost of goods sold, divided by tonnes sold in the
period, excluding depreciation and amortization charges. We include this information as it is frequently requested by
investors and investment analysts who use it to assess our cost structure and margins and compare it to similar
information provided by many companies in the industry.
Management’s Discussion and Analysis
57
Adjusted site cash cost of sales: Adjusted site cash cost of sales for our steelmaking coal operations is defined as the
cost of the product as it leaves the mine excluding depreciation and amortization charges, out-bound transportation
costs and any one-time collective agreement charges and inventory write-down provisions.
Total cash unit costs: Total cash unit costs for our copper and zinc operations includes adjusted cash costs of sales, as
described below, plus the smelter and refining charges added back in determining adjusted revenue. This presentation
allows a comparison of total cash unit costs, including smelter charges, to the underlying price of copper or zinc in
order to assess the margin for the mine on a per unit basis.
Net cash unit costs: Net cash unit costs of principal product, after deducting co-product and by-product margins,
are also a common industry measure. By deducting the co- and by-product margin per unit of the principal product,
the margin for the mine on a per unit basis may be presented in a single metric for comparison to other operations.
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 write-down provisions and by-product cost of sales. It is common practice
in the industry to exclude depreciation and amortization as these costs are non-cash and discounted cash flow
valuation models used in the industry substitute expectations of future capital spending for these amounts.
Adjusted operating costs: Adjusted operating costs for our energy business unit is defined as the costs of product as
it leaves the mine, excluding depreciation and amortization charges, cost of diluent for blending to transport our bitumen
by pipeline, cost of non-proprietary product purchased and transportation costs of our product and non-proprietary
product and any one-time collective agreement charges or inventory write-down provisions.
Cash margins for by-products: Cash margins for by-products is revenue from by- and co-products, less any
associated cost of sales of the by and co-product. In addition, for our copper operations, by-product cost of sales
also includes cost recoveries associated with our streaming transactions.
Adjusted revenue: Adjusted revenue for our copper and zinc operations excludes the revenue from co-products and
by-products, but adds back the processing and refining charges to arrive at the value of the underlying payable pounds
of copper and zinc. Readers may compare this on a per unit basis with the price of copper and zinc on the LME.
Adjusted revenue for our energy business unit excludes the cost of diluent for blending and non-proprietary product
revenue, but adds back Crown royalties to arrive at the value of the underlying bitumen.
Blended bitumen revenue: Blended bitumen revenue is revenue as reported for our energy business unit, but excludes
non-proprietary product revenue, and adds back Crown royalties that are deducted from revenue.
The debt-related measures outlined below are disclosed as we believe they provide readers with information that allows
them to assess our credit capacity and the ability to meet our short- and long-term financial obligations.
Net debt: Net debt is total debt, less cash and cash equivalents.
Net debt to net debt-plus-equity ratio: Net debt to net debt-plus-equity ratio is net debt divided by the sum of net
debt plus total equity, expressed as a percentage.
Net debt to adjusted EBITDA ratio: Net debt to adjusted EBITDA ratio is the same calculation as the debt to adjusted
EBITDA ratio, but using net debt as the numerator.
Adjusted basic earnings per share: Adjusted basic earnings per share is adjusted profit attributable to shareholders
divided by average number of shares outstanding in the period.
Adjusted diluted earnings per share: Adjusted diluted earnings per share is adjusted profit attributable to shareholders
divided by average number of fully diluted shares in a period.
Adjusted site cash cost of sales per tonne: Adjusted site cash cost of sales per tonne is a non-GAAP ratio comprised
of adjusted site cash cost of sales divided by tonnes sold. There is no similar financial measure in our consolidated
financial statements with which to compare. Adjusted site cash cost of sales is a non-GAAP financial measure.
Total cash unit costs per pound: Total cash unit costs per pound is a non-GAAP ratio comprised of adjusted cash cost
of sales divided by payable pounds sold plus smelter processing charges divided by payable pounds sold.
58 Teck 2021 Annual Report | Purpose Driven
Net cash unit costs per pound: Net cash unit costs per pound is a non-GAAP ratio comprised of (adjusted cash cost
of sales plus smelter processing charges less cash margin for by-products) divided by payable pounds sold. There is
no similar financial measure in our consolidated financial statements with which to compare. Adjusted cash cost of
sales is a non-GAAP financial measure.
Cash margins for by-products per pound: Cash margins for by-products per pound is a non-GAAP ratio comprised
of cash margins for by-products divided by payable pounds sold.
Operating netback: Operating netback per barrel in our energy business unit is calculated as blended bitumen
sales revenue net of diluent expenses (also referred to as bitumen price realized), less Crown royalties, transportation
and operating expenses divided by barrels of bitumen sold. We include this information as investors and investment
analysts use it to measure our profitability on a per barrel basis and compare it to similar information provided by
other companies in the oil sands industry.
Profit (Loss) Attributable to Shareholders and Adjusted Profit Attributable to Shareholders
($ in millions, except per share data)
2021
2020
2019
Profit (loss) attributable to shareholders
$ 2,868
$
(864)
$
(605)
Add (deduct) on an after-tax basis:
Asset impairments (impairment reversal)
COVID-19 costs
QB2 variable consideration to IMSA and ENAMI
Environmental costs
Inventory write-downs
Share-based compensation
Commodity derivatives
Debt prepayment option gain
Loss on debt redemption
Other
Adjusted profit attributable to shareholders
Basic earnings (loss) per share
Diluted earnings (loss) per share
Adjusted basic earnings per share
Adjusted diluted earnings per share
(150)
–
124
79
2
94
15
–
–
25
$
$
$
$
$
3,057
5.39
5.31
5.74
5.66
$
$
$
$
$
912
233
(34)
210
91
34
(46)
–
8
25
561
(1.62)
(1.62)
1.05
1.04
2,052
–
(22)
142
41
3
(13)
(77)
166
10
1,697
(1.08)
(1.08)
3.03
3.00
$
$
$
$
$
Management’s Discussion and Analysis
59
Reconciliation of Basic Earnings per share to Adjusted Basic Earnings per share
(Per share amounts)
Basic earnings (loss) per share
Add (deduct):
Asset impairments (impairment reversal)
COVID-19 costs
QB2 variable consideration to IMSA and ENAMI
Environmental costs
Inventory write-downs
Share-based compensation
Commodity derivative
Debt prepayment option gain
Loss on debt redemption
Other
2021
2020
2019
$
5.39
$
(1.62)
$
(1.08)
(0.28)
–
0.23
0.15
–
0.18
0.03
–
–
0.04
1.71
0.44
(0.06)
0.39
0.17
0.06
(0.09)
–
0.01
0.04
3.67
–
(0.04)
0.25
0.07
0.01
(0.02)
(0.13)
0.29
0.01
Adjusted basic earnings per share
$
5.74
$
1.05
$
3.03
Reconciliation of Diluted Earnings per share to Adjusted Diluted Earnings per share
(Per share amounts)
Diluted earnings (loss) per share
Add (deduct):
Asset impairments (impairment reversal)
COVID-19 costs
QB2 variable consideration to IMSA and ENAMI
Environmental costs
Inventory write-downs
Share-based compensation
Commodity derivative
Debt prepayment option gain
Loss on debt redemption
Other
2021
2020
2019
$
5.31
$
(1.62)
$
(1.08)
(0.28)
–
0.23
0.15
–
0.18
0.03
–
–
0.04
1.70
0.43
(0.06)
0.39
0.17
0.07
(0.09)
–
0.01
0.05
3.63
–
(0.04)
0.25
0.07
0.01
(0.02)
(0.13)
0.29
0.02
Adjusted diluted earnings per share
$
5.66
$
1.04
$
3.00
60 Teck 2021 Annual Report | Purpose Driven
Reconciliation of EBITDA, Adjusted EBITDA, Net Debt to Adjusted EBITDA and Net Debt to
Capitalization Ratio
($ in millions)
Profit (loss) before taxes
Finance expense net of finance income
Depreciation and amortization
EBITDA
Add (deduct):
Asset impairments (impairment reversal)
COVID-19 costs
QB2 variable consideration to IMSA and ENAMI
Environmental costs
Inventory write-downs
Share-based compensation
Commodity derivative gains
Debt prepayment option gain
Loss on debt redemption
Other
Adjusted EBITDA
Total debt at year end
Less: cash and cash equivalents at year end
Net debt
Debt to adjusted EBITDA ratio
Net debt to adjusted EBITDA ratio
Equity attributable to shareholders of the company
Obligation to Neptune Bulk Terminals
QB shovels financial liability
Adjusted net debt to capitalization ratio
$
2021
4,532
210
1,583
2020
2019
$
(1,136)
$
(468)
268
1,510
218
1,619
$ 6,325
$
642
$
1,369
(215)
–
141
108
1
125
22
–
–
66
1,244
2,690
336
(56)
270
134
47
(62)
–
11
4
–
(37)
197
60
4
(17)
(105)
224
88
6,573
2,570
4,473
$ 8,068
(1,427)
$
$
6,641
$
$
$
6,947
(450)
6,497
$
$
$
4,834
(1,026)
3,308
1.2
1.0
23,005
183
74
0.22
2.7
2.5
1.1
0.9
20,039
21,304
138
–
0.24
–
–
0.15
Management’s Discussion and Analysis
61
Reconciliation of Gross Profit Before Depreciation and Amortization
($ in millions)
Gross profit
Depreciation and amortization
2021
5,081
1,583
$
2020
2019
$
1,333
$
3,340
1,510
1,619
Gross profit before depreciation and amortization
$ 6,664
$
2,843
$
4,959
Reported as:
Copper
Highland Valley Copper
Antamina
Carmen de Andacollo
Quebrada Blanca
Zinc
Trail Operations
Red Dog
Pend Oreille
Other
Steelmaking coal
Energy
$
883
992
209
42
$
476
566
170
30
$
395
614
89
(18)
2,126
1,242
1,080
84
822
–
12
918
3,657
(37)
65
717
–
33
815
–
837
(4)
(2)
831
1,009
(223)
2,904
144
Gross profit before depreciation and amortization
$ 6,664
$
2,843
$
4,959
62 Teck 2021 Annual Report | Purpose Driven
Copper Unit Cost Reconciliation
(CAD$ in millions, except where noted)
Revenue as reported
By-product revenue (A)
Smelter processing charges (B)
Adjusted revenue
Cost of sales as reported
Less:
Depreciation and amortization
Labour settlement and strike costs
By-product cost of sales (C)
Adjusted cash cost of sales (D)
Payable pounds sold (millions) (E)
Per unit amounts — CAD$/pound
Adjusted cash cost of sales (D/E)
Smelter processing charges (B/E)
Total cash unit costs — CAD$/pound
Cash margins for by-products — ((A−C)/E)
Net cash unit costs — CAD$/pound
US$ amounts1
Average exchange rate (CAD$ per US$1.00)
Per unit amounts — US$/pound
Adjusted cash cost of sales
Smelter processing charges
Total cash unit costs — US$/pound
Cash margins for by-products
Net cash unit costs — US$/pound
Note:
1. Average period exchange rates are used to convert to US$ per pound equivalent.
2021
2020
$ 3,452
(386)
124
$
2,419
(300)
140
$ 3,190
$
2,259
$
1,711
$
1,560
(385)
(26)
(84)
(383)
–
(71)
$
1,216
$
1,106
596.1
591.7
$
$
2.04
0.21
2.25
(0.51)
$
1.74
$
$
$
1.25
1.63
0.17
1.80
(0.41)
$
1.39
$
$
$
$
$
$
$
1.87
0.23
2.10
(0.39)
1.71
1.34
1.39
0.18
1.57
(0.29)
1.28
Management’s Discussion and Analysis
63
Zinc Unit Cost Reconciliation (Mining Operations1)
(CAD$ in millions, except where noted)
Revenue as reported
Less:
Trail Operations revenues as reported
Other revenues as reported
Add back: Intra-segment revenues as reported
By-product revenues (A)
Smelter processing charges (B)
Adjusted revenue
Cost of sales as reported
Less:
Trail Operations cost of sales as reported
Other costs of sales as reported
Add back: Intra-segment purchases as reported
Less:
Depreciation and amortization
Royalty costs
By-product cost of sales (C)
Adjusted cash cost of sales (D)
Payable pounds sold (millions) (E)
Per unit amounts — CAD$/pound
Adjusted cash cost of sales (D/E)
Smelter processing charges (B/E)
Total cash unit costs — CAD$/pound
Cash margins for by-products — ((A−C)/E)
Net cash unit costs — CAD$/pound
US$ amounts2
Average exchange rate (CAD$ per US$1.00)
Per unit amounts — US$/pound
Adjusted cash cost of sales
Smelter processing charges
Total cash unit costs — US$/pound
Cash margins for by-products
Net cash unit costs — US$/pound
Notes:
1. Red Dog mining operations.
2. Average period exchange rates are used to convert to US$ per pound equivalent.
64 Teck 2021 Annual Report | Purpose Driven
2021
2020
$ 3,063
$
2,700
(1,997)
(10)
511
1,567
(336)
240
$
(1,761)
(9)
464
$
1,394
(316)
370
$
1,471
$
1,448
$ 2,375
$
2,177
(1,999)
2
511
$
889
$
(144)
(323)
(68)
(1,784)
24
464
881
(204)
(231)
(78)
$
354
$
368
842.4
1,040.3
$
$
0.42
0.28
0.70
(0.32)
$
0.35
0.36
$
0.71
(0.23)
$
0.38
$
0.48
$
$
$
1.25
0.34
0.22
0.56
(0.26)
$
$
$
1.34
0.26
0.27
0.53
(0.17)
$
0.30
$
0.36
Steelmaking Coal Unit Cost Reconciliation
(CAD$ in millions, except where noted)
Cost of sales as reported
Less:
Transportation
Depreciation and amortization
Inventory write-down reversal
Labour settlement
Adjusted site cost of sales
Tonnes sold (millions)
Per unit amounts — CAD$/tonne
Adjusted site cost of sales
Transportation costs
Inventory write-downs
Labour settlement
Unit costs — CAD$/tonne
US$ amounts1
Average exchange rate (CAD$ per US$1.00)
Per unit amounts — US$/tonne
Adjusted site cost of sales
Transportation
Inventory write-down reversal
Labour settlement
Unit costs — US$/tonne
Note:
1. Average period exchange rates are used to convert to US$/tonne equivalent.
2021
2020
$ 3,466
$ 3,098
(1,037)
(872)
10
(39)
(905)
(732)
(59)
(4)
$
1,528
$
1,398
23.4
21.9
$
$
$
$
$
65
44
–
2
111
1.25
52
35
–
2
89
$
64
41
3
–
$
108
$
$
$
1.34
47
31
2
–
80
Management’s Discussion and Analysis
65
Energy Business Unit — Operating Netback, Bitumen and Blended Bitumen Price Realized Reconciliations,
and Adjusted Operating Costs1
(CAD$ in millions, except where noted)
Revenue as reported
Less:
Cost of diluent for blending
Non-proprietary product revenue
Add back: Crown royalties (D)
Adjusted revenue (A)
Cost of sales as reported
Less:
Depreciation and amortization
Inventory write-down
Cash cost of sales
Less:
Cost of diluent for blending
Cost of non-proprietary product purchased
Transportation for non-proprietary product purchased3
Transportation costs for FRB (C)
Adjusted operating costs (E)
Blended bitumen barrels sold (thousands)
Less diluent barrels included in blended bitumen (thousands)
Bitumen barrels sold (thousands) (B)
Per barrel amounts — CAD$
Bitumen price realized (A/B)2
Crown royalties (D/B)
Transportation costs for FRB (C/B)
Adjusted operating costs (E/B)
Operating netback — CAD$ per barrel
2021
2020
$
715
$
454
$
$
(250)
(50)
15
430
848
(96)
(11)
$
$
(217)
(21)
4
220
780
(103)
(54)
$
741
$
623
(250)
(45)
(8)
(104)
(217)
(17)
(8)
(103)
$
334
$
278
9,333
(2,363)
6,970
11,641
(2,949)
8,692
$ 61.78
(2.18)
(14.96)
(47.89)
$
25.27
(0.49)
(11.84)
(31.96)
$
(3.25)
$
(19.02)
Notes:
1. Calculated per unit amounts may differ due to rounding.
2. Bitumen price realized represents the realized petroleum revenue (blended bitumen sales revenue) net of diluent expense, expressed on a per
barrel basis. Blended bitumen sales revenue represents revenue from our share of the heavy crude oil blend known as Fort Hills Reduced Carbon
Life Cycle Dilbit Blend (FRB), sold at the Hardisty and U.S. Gulf Coast market hubs. FRB is comprised of bitumen produced from Fort Hills blended
with purchased diluent. The cost of blending is affected by the amount of diluent required and the cost of purchasing, transporting and blending
the diluent. A portion of diluent expense is effectively recovered in the sales price of the blended product. Diluent expense is also affected by
Canadian and U.S. benchmark pricing and changes in the value of the Canadian dollar relative to the U.S. dollar.
3. Reflects adjustments for costs not directly attributed to the production of Fort Hills bitumen, including transportation for non-proprietary
product purchased.
66 Teck 2021 Annual Report | Purpose Driven
Blended Bitumen Price Realized Reconciliation1
(CAD$ in millions, except where noted)
Revenue as reported
Less: non-proprietary product revenue
Add back: Crown royalties
Blended bitumen revenue (A)
Blended bitumen barrels sold (thousands) (B)
Blended bitumen price realized — (CAD$/barrel) (A/B) = D1
Average exchange rate (CAD$ per US$1.00) (C)
Blended bitumen price realized — (US$/barrel) (D/C)1
Note:
1. Calculated per unit amounts may differ due to rounding.
2021
2020
$
715
(50)
15
$
680
9,333
$ 72.89
1.25
$ 58.14
$
454
(21)
4
$
437
11,641
$
37.55
1.34
$
27.99
Management’s Discussion and Analysis
67
Cautionary Statement on Forward-Looking Statements
This document contains certain forward-looking information and forward-looking statements as defined in
applicable securities laws (collectively referred to as forward-looking statements). These statements relate to future
events or our future performance. All statements other than statements of historical fact are forward-looking
statements. The use of any of the words “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”,
“predict”, “potential”, “should”, “believe” and similar expressions is intended to identify forward-looking statements.
These statements involve known and unknown risks, uncertainties and other factors that may cause actual results
or events to differ materially from those anticipated in such forward-looking statements. These statements speak
only as of the date of this document.
These forward-looking statements include, but are not limited to, statements concerning: our focus and strategy;
anticipated global and regional supply, demand and market outlook for our commodities; the expected receipt or
completion of prefeasibility studies, feasibility studies and other studies and the expected timing thereof; all
guidance appearing in this document including, but not limited to, the production, sales, cost, unit cost, capital
expenditure, transportation cost, cost reduction and other guidance under the heading “Guidance” and discussed in
the various business unit sections; the potential impact of COVID-19 on our business and operations, including our
ability to continue operations at our sites and progress our development projects and business strategy, and our
plans and strategies to mitigate the impact thereof; our ability to manage challenges presented by COVID-19,
including the effectiveness of our management protocols implemented to protect the health and safety of our
employees; QB2 ramp-up plans and expectations; QB2 capital cost guidance and estimates of QB2 COVID-19 related
capital costs; estimated timing of first production from QB2; our expectation that QB2 will have low operating costs,
an initial mine life of 28 years and significant potential for further growth; our expectations regarding our QB Mill
Expansion project; our drilling and exploration plans for the QB resource; our plans for advancing our Project Satellite
assets, including that first production at San Nicolás is targeted for 2026; our expectations regarding planned
maintenance at our Trail Operations; the effectiveness of our water management at Red Dog; expected sales from
Red Dog in the first quarter of 2022; our expectations that increased costs in our steelmaking coal business unit in
2022 will be more than offset by strong steelmaking coal prices; expectation that costs related to key mining drivers
such as mine productivity and strip ratio are forecasted to improve compared to 2021; our expectations that we will
be able to largely recover delayed steelmaking coal fourth quarter sales in 2022 and reduce mine steelmaking coal
inventories; our expectations regarding the continued impact of costs associated with COVID-19 response measures
on unit costs; our expectations regarding timing for construction of the Harmer Project and the benefits thereof;
expectations related to our Elk Valley water treatment capacity, timing of construction and completion of our various
proposed active water treatment and saturated rock fill facilities, water treatment and management capital costs,
the regulatory process relating to active water treatment, our long-term costs of water management, and our
expectation that we will stabilize and reduce the selenium trend in the Elk Valley; expected utilization rates at
Fort Hills; expected benefits of our RACE21™ program and our plans for the future; our exploration and drilling plans
for 2022; liquidity and availability of borrowings under our credit facilities and the QB2 project finance facility; the
amount of potential taxes, interest and penalties relating to the Antamina tax dispute and our share thereof; our tax
position and the tax rates applicable to us, including our expectation that we will accrue current Canadian corporate
income taxes starting in the first quarter of 2022; our expectations regarding the amount of Class B subordinate
voting shares that might be purchased under the normal course issuer bid and the mechanics thereof; expectations
regarding our dividend policy and our capital allocation framework; our expectations, projections and sensitivities
under the heading “Commodity Prices and Sensitivities”; expectations regarding carbon legislation and climate
change regulations, including our expectation that we will receive a portion of our carbon tax expenditures back
under the CleanBC program; and the impact of certain accounting initiatives and estimates.
These statements are based on a number of assumptions, including, but not limited to, assumptions regarding
general business and economic conditions, interest rates, commodity and power prices, acts of foreign or domestic
governments and the outcome of legal proceedings, the supply and demand for, deliveries of, and the level and volatility
of prices of copper, zinc, steelmaking coal and blended bitumen and our other metals and minerals, as well as oil,
natural gas and other petroleum products, the timing of the receipt of permits and other regulatory and governmental
approvals for our development projects and other operations, including mine extensions; positive results from the
studies on our expansion and development projects; our ability to secure adequate transportation, including rail,
68 Teck 2021 Annual Report | Purpose Driven
pipeline and port services, for our products; our costs of production and our production and productivity levels, as well
as those of our competitors, continuing availability of water and power resources for our operations, our ability to
secure adequate transportation, pipeline and port services for our products; credit market conditions and conditions
in financial markets generally, the availability of funding to refinance our borrowings as they become due or to finance
our development projects on reasonable terms; availability of letters of credit and other forms of financial assurance
acceptable to regulators for reclamation and other bonding requirements; our ability to procure equipment and
operating supplies and services in sufficient quantities and on a timely basis; the availability of qualified employees
and contractors for our operations, including our new developments and our ability to attract and retain skilled
employees; the satisfactory negotiation of collective agreements with unionized employees; the impact of changes
in Canadian-U.S. dollar exchange rates, Canadian dollar-Chilean Peso exchange rates and other foreign exchange
rates on our costs and results; engineering and construction timetables and capital costs for our development and
expansion projects; the benefits of technology for our operations and development projects, including the impact of
our RACE21™ program; costs of closure, and environmental compliance costs generally, on our operations; market
competition; the accuracy of our mineral, steelmaking coal and oil reserve and resource estimates (including with
respect to size, grade and recoverability) and the geological, operational and price assumptions on which these are
based; tax benefits and tax rates; the outcome of our steelmaking coal price and volume negotiations with customers;
the outcome of our copper, zinc and lead concentrate treatment and refining charge negotiations with customers;
the impacts of the COVID-19 pandemic on our operations and projects and on global markets; the resolution of
environmental and other proceedings or disputes; the future supply of low-cost power to the Trail smelting and refining
complex; our ability to obtain, comply with and renew permits, licences and leases in a timely manner; and our ongoing
relations with our employees and with our business and joint venture partners.
In addition, assumptions regarding the Elk Valley Water Quality Plan include assumptions that additional treatment
will be effective at scale, and that the technology and facilities operate as expected, as well as additional assumptions
discussed under the heading “Steelmaking Coal — Elk Valley Water Quality Management Update”. Assumptions regarding
QB2 include current project assumptions and assumptions contained in the final feasibility study, as well as there
being no further unexpected material and negative impact to the various contractors, suppliers and subcontractors for
the QB2 project relating to COVID-19 or otherwise that would impair their ability to provide goods and services as
anticipated. Our QB2 capital estimate of US$5.26 billion is based on a CLP/USD exchange rate of 775; 2022 spending
is based on an assumed a CLP/USD exchange rate of 825 to 850 and a CAD/USD exchange rate of 1.30. Assumptions
regarding the costs and benefits of our projects include assumptions that the relevant project is constructed and
operated in accordance with current expectations. Expectations regarding our operations are based on numerous
assumptions regarding the operations. Our Guidance tables and business unit sections include disclosure and footnotes
with further assumptions relating to our guidance, and assumptions for certain other forward-looking statements
accompany those statements within the document. Expectations regarding the impact of foreign exchange rates are
based on the assumptions set out in this document. Statements regarding the availability of our credit facilities and
project financing facility are based on assumptions that we will be able to satisfy the conditions for borrowing at the
time of a borrowing request and that the credit facilities are not otherwise terminated or accelerated due to an event
of default. Statements concerning future production costs or volumes are based on numerous assumptions regarding
operating matters and on assumptions that demand for products develops as anticipated, that customers and other
counterparties perform their contractual obligations, that operating and capital plans will not be disrupted by issues
such as mechanical failure, unavailability of parts and supplies, labour disturbances, COVID-19, interruption in
transportation or utilities, adverse weather conditions, and that there are no material unanticipated variations in the
cost of energy or supplies. Statements regarding anticipated steelmaking coal sales volumes and average steelmaking
coal prices depend on timely arrival of vessels and performance of our steelmaking coal-loading facilities, as well as
the level of spot pricing sales. Expected timing of first production related to our QB Mill Expansion and San Nicolás
assumes positive outcomes of the related prefeasibility and feasibility study, timely receipt of all permits and
development approvals. The foregoing list of assumptions is not exhaustive. Events or circumstances could cause
actual results to vary materially.
Factors that may cause actual results to vary materially include, but are not limited to, changes in commodity and
power prices, changes in market demand for our products, changes in interest and currency exchange rates, acts of
governments and the outcome of legal proceedings, inaccurate geological and metallurgical assumptions (including
with respect to the size, grade and recoverability of mineral reserves and resources), unanticipated operational
Management’s Discussion and Analysis
69
difficulties (including failure of plant, equipment or processes to operate in accordance with specifications or
expectations, cost escalation, unavailability of materials and equipment, government action or delays in the receipt
of government approvals, changes in tax or royalty rates, industrial disturbances or other job action, adverse weather
conditions and unanticipated events related to health, safety and environmental matters), union labour disputes,
impact of COVID-19 mitigation protocols, political risk, social unrest, failure of customers or counterparties (including
logistics suppliers) to perform their contractual obligations, changes in our credit ratings, unanticipated increases in
costs to construct our development projects, difficulty in obtaining permits, inability to address concerns regarding
permits or environmental impact assessments, and changes or further deterioration in general economic conditions.
The amount and timing of capital expenditures is depending upon, among other matters, being able to secure permits,
equipment, supplies, materials and labour on a timely basis and at expected costs. Certain operations and projects
are not controlled by us; schedules and costs may be adjusted by our partners, and timing of spending and operation
of the operation or project is not in our control. Certain of our other operations and projects are operated through
joint arrangements where we may not have control over all decisions, which may cause outcomes to differ from
current expectations. Current and new technologies relating to our Elk Valley water treatment efforts may not
perform as anticipated, and ongoing monitoring may reveal unexpected environmental conditions requiring additional
remedial measures. QB2 costs, construction progress and timing of first production is dependent on, among other
matters, our continued ability to successfully manage through the impacts of the COVID-19 pandemic. QB2 costs may
also be affected by claims and other proceedings that might be brought against us relating to costs and impacts of
the COVID-19 pandemic. Purchases of Class B subordinate voting shares under the normal course issuer bid may be
affected by, among other things, availability of Class B subordinate voting shares, share price volatility and availability
of funds to purchase shares. Further factors associated with our Elk Valley Water Quality Plan are discussed under the
heading “Steelmaking Coal — Elk Valley Water Quality Management Update”. Declaration and payment of dividends is in
the discretion of the Board, and our dividend policy will be reviewed regularly and may change. Dividends and share
repurchases can be impacted by share price volatility, negative changes to commodity prices, availability of funds to
purchase shares, alternative uses for funds, compliance with regulatory requirements and other risk factors impacting
our business as detailed in our Annual Information Form. Red Dog production may also be impacted by water levels at
site. Unit costs in our copper business unit are impacted by higher profitability at Antamina, which can cause higher
workers’ participation and royalty expenses. Sales to China may be impacted by general and specific port restrictions,
Chinese regulation and policies and normal production and operating risks.
The forward-looking statements and actual results will also be impacted by the effects of COVID-19 and related
matters. The overall effects of COVID-19-related matters on our business and operations and projects will depend on
the ability of our sites to maintain normal operations, and on the duration of impacts on our suppliers, customers and
markets for our products, all of which are unknown at this time. Continuing operating activities is highly dependent on
the continuing progression of the pandemic and the success of measures taken to prevent transmission, which will
influence when health and government authorities remove various restrictions on business activities and the rate of
infection and related absenteeism in our workforce.
We assume no obligation to update forward-looking statements except as required under securities laws. Further
information concerning risks, assumptions and uncertainties associated with these forward-looking statements and
our business can be found in our Annual Information Form for the year ended December 31, 2021, filed under our
profile on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov) under cover of Form 40-F, as well as subsequent
filings that can also be found under our profile.
Scientific and technical information in this document regarding our coal properties, which for this purpose does not
include the discussion under “Steelmaking Coal - Elk Valley Water Quality Management Update”, was reviewed and
approved by Jo-Anna Singleton P.Geo. and Robin Gold P.Eng., each an employee of Teck Coal Limited and a Qualified
Person as defined under National Instrument 43-101. Scientific and technical information in this document regarding
our base metal properties was reviewed and approved by Rodrigo Alves Marinho, P.Geo., an employee of Teck and a
Qualified Person as defined under National Instrument 43-101.
70 Teck 2021 Annual Report | Purpose Driven
CONSOLIDATED
FINANCIAL STATEMENTS
For the Years Ended December 31, 2021 and 2020
Consolidated Financial Statements
71
Management’s Responsibility for
Financial Reporting
Management is responsible for the integrity and fair presentation of the financial information contained in this annual
report. Where appropriate, the financial information, including financial statements, reflects amounts based on the best
estimates and judgments of management. The financial statements have been prepared in accordance with International
Financial Reporting Standards as issued by the International Accounting Standards Board. Financial information presented
elsewhere in the annual report is consistent with that disclosed in the financial statements.
Management is responsible for establishing and maintaining adequate internal control over financial reporting. Any system
of internal control over financial reporting, no matter how well-designed, has inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation
and presentation. The system of controls is also supported by a professional staff of internal auditors who conduct periodic
audits of many aspects of our operations and report their findings to management and the Audit Committee.
Management has a process in place to evaluate internal control over financial reporting based on the criteria established
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) 2013 framework.
The Board of Directors oversees management’s responsibility for financial reporting and internal control systems through
an Audit Committee, which is composed entirely of independent directors. The Audit Committee meets periodically with
management, our internal auditors and independent auditors to review the scope and results of the annual audit, and to
review the financial statements and related financial reporting and internal control matters before the financial statements
are approved by the Board of Directors and submitted to the shareholders.
PricewaterhouseCoopers LLP, an independent registered public accounting firm, appointed by the shareholders, have
audited our financial statements in accordance with the standards of the Public Company Accounting Oversight Board
(United States) and have expressed their opinion in the Report of Independent Registered Public Accounting Firm.
Donald R. Lindsay
President and Chief Executive Officer
Jonathan H. Price
Executive Vice President and Chief Financial Officer
February 23, 2022
72
Teck 2021 Annual Report | Purpose Driven
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of Teck Resources Limited
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Teck Resources Limited and its subsidiaries
(together, the Company) as of December 31, 2021 and 2020, and the related consolidated statements of income (loss),
comprehensive income (loss), cash flows and changes in equity for the years then ended, including the related notes
(collectively referred to as the consolidated financial statements). We also have audited the Company’s internal control
over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2021 and 2020, and its financial performance and its cash flows
for the years then ended in conformity with International Financial Reporting Standards as issued by the International
Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated
Framework (2013) issued by the COSO.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting, included in Management’s Report on Internal Control over Financial Reporting, appearing in Management’s
Discussion and Analysis. Our responsibility is to express opinions on the Company’s consolidated financial statements
and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm
registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of
material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting
was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audits also included performing such other procedures as we considered necessary in the circumstances. We believe
that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s internal control over financial reporting includes those
policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in
Consolidated Financial Statements
73
accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated
financial statements that were communicated or required to be communicated to the audit committee and that (i)
relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter
in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating
the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or
disclosures to which they relate.
Steelmaking coal goodwill impairment test
As described in Notes 3, 4, 7, and 16 to the consolidated financial statements, management performs its annual
impairment test of its steelmaking coal goodwill as of October 31 of each year, or more frequently if events or
circumstances indicate that the carrying value of goodwill may be impaired. The total carrying value of the steelmaking
coal goodwill as of December 31, 2021 was $702 million. An impairment loss exists if the steelmaking coal operations
group of cash generating units’ (the steelmaking coal CGU) carrying amount, including goodwill, exceeds its recoverable
amount. Management used a discounted cash flow model to determine the recoverable amount of the steelmaking
coal CGU. The recoverable amount determined by management exceeded the carrying value of the steelmaking coal
CGU, and as a result, no impairment loss was recognized. Significant assumptions are used in the discounted cash
flow model, which include: commodity prices, mineral reserves and resources, mine production, operating costs,
capital expenditures, the discount rate, and the foreign exchange rate. The Company’s mineral reserves and resources
have been prepared by or under the supervision of qualified persons (management’s specialists).
The principal considerations for our determination that performing procedures relating to the steelmaking coal
goodwill impairment test is a critical audit matter are: (i) significant judgment by management when determining the
recoverable amount of the steelmaking coal CGU; (ii) management’s specialists were used to prepare the mineral
reserves and resources; (iii) a high degree of auditor judgment, subjectivity and effort was required in performing
procedures to evaluate significant assumptions used in the discounted cash flow model, relating to: commodity
prices, mineral reserves and resources, mine production, operating costs, capital expenditures, the discount rate, and
the foreign exchange rate; and (iv) the audit effort involved the use of professionals with specialized skills and
knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with
forming our overall opinion on the consolidated financial statements. These procedures included testing the
effectiveness of controls relating to management’s goodwill impairment test, including controls over the
determination of the recoverable amount of the steelmaking coal CGU. These procedures also included, among
others, testing management’s process for determining the recoverable amount of the steelmaking coal CGU, including
evaluating the appropriateness of the discounted cash flow model, testing the completeness and accuracy of
underlying data and evaluating the reasonableness of the significant assumptions used in the discounted cash flow
model. Evaluating the reasonableness of management’s assumptions involved considering their consistency with:
(i) external market and industry data for commodity prices and the foreign exchange rate, and (ii) recent actual results,
market data and when available, other third party information, for mine production, operating costs and capital
expenditures. The work of management’s specialists was used in performing the procedures to evaluate the
reasonableness of mineral reserves and resources. As a basis for using this work, management’s specialists’
qualifications were understood and the Company’s relationship with management’s specialists was assessed. The
procedures performed also included evaluation of the methods and assumptions used by management’s specialists,
74
Teck 2021 Annual Report | Purpose Driven
tests of the data used by management’s specialists, and an evaluation of their findings. Professionals with specialized
skill and knowledge were used to assist in the evaluation of the discount rate.
Quebrada Blanca goodwill impairment test
As described in Notes 3, 4, 7, and 16 to the consolidated financial statements, management performs its annual
impairment test of its Quebrada Blanca goodwill as of October 31 of each year, or more frequently if events or
circumstances indicate that the carrying value of goodwill may be impaired. The total carrying value of the Quebrada
Blanca goodwill as of December 31, 2021 was $389 million. An impairment loss exists if the Quebrada Blanca CGU’s
(QB CGU) carrying amount, including goodwill, exceeds its recoverable amount. Management used a discounted
cash flow model to determine the recoverable amount of the QB CGU. The recoverable amount determined by
management exceeded the carrying value of the QB CGU, and as a result, no impairment loss was recognized.
Significant assumptions are used in the discounted cash flow model, which include: commodity prices, mineral
reserves and resources, mine production, operating costs, capital expenditures, and the discount rate. The
Company’s mineral reserves and resources and estimates of capital expenditures for the QB CGU have been
prepared by or under the supervision of qualified persons and management’s experts (management’s specialists).
The principal considerations for our determination that performing procedures relating to the Quebrada Blanca
goodwill impairment test is a critical audit matter are: (i) significant judgment by management when determining the
recoverable amount of the QB CGU; (ii) management’s specialists were used to prepare the reserves and resources
and estimates of capital expenditures; and (iii) a high degree of auditor judgment, subjectivity and effort was required
in performing procedures to evaluate significant assumptions used in the discounted cash flow model, relating to:
commodity prices, mineral reserves and resources, mine production, operating costs, capital expenditures, and the
discount rate; and (iv) the audit effort involved the use of professionals with specialized skills and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming
our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness
of controls relating to management’s QB CGU goodwill impairment test, including controls over the determination
of the recoverable amount of the QB CGU. These procedures also included, among others, testing management’s
process for determining the recoverable amount of the QB CGU, including evaluating the appropriateness of the
discounted cash flow model, testing the completeness and accuracy of underlying data and evaluating the
reasonableness of the significant assumptions used in the discounted cash flow model. Evaluating the reasonableness
of management’s assumptions involved considering their consistency with: (i) external market and industry data for
commodity prices, (ii) recent actual capital expenditures incurred and the work of management’s specialists for
capital expenditures, and (iii) market and industry data and when available, other third party information, for
operating costs and mine production. The work of management’s specialists was used in performing the procedures
to evaluate the reasonableness of mineral reserves and resources, and management’s estimates of capital
expenditures. As a basis for using this work, management’s specialists’ qualifications were understood and the
Company’s relationship with management’s specialists was assessed. The procedures performed also included
evaluation of the methods and assumptions used by management’s specialists, tests of the data used by
management’s specialists, and an evaluation of their findings. Professionals with specialized skill and knowledge
were used to assist in the evaluation of the discount rate.
Impairment test of the Fort Hills CGU
As described in Notes 3, 4, and 7 to the consolidated financial statements, the carrying amount of the Fort Hills CGU is
reviewed for impairment whenever facts and circumstances indicate that the carrying amount may be less than the
recoverable amount. As of December 31, 2021, an indicator of impairment was identified and as a result, management
performed an impairment test of the Fort Hills CGU. Management used a discounted cash flow model to determine
the recoverable amount of the Fort Hills CGU. The recoverable amount as at December 31, 2021 of $2.1 billion
approximated the carrying value, and as a result, no impairment loss or reversal was recorded for the year then ended.
In determining the recoverable amount, management used significant assumptions such as: commodity prices, oil
reserves, mine production, operating costs, capital expenditures, the discount rate and the foreign exchange rate. Oil
reserves were prepared by qualified reserves evaluators (management’s specialists). The principal considerations for
our determination that performing procedures relating to the impairment test of the Fort Hills CGU is a critical audit
Consolidated Financial Statements
75
matter are: (i) significant judgment by management when determining the recoverable amount of the Fort Hills CGU;
(ii) the use of management’s specialists in the preparation of oil reserves; (iii) a high degree of auditor judgment,
subjectivity and effort was required in performing procedures to evaluate significant assumptions used in the
discounted cash flow model relating to: commodity prices, oil reserves, mine production, operating costs, capital
expenditures, the discount rate and the foreign exchange rate; and (iv) the audit effort involved the use of
professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of
controls relating to management’s impairment test, including controls over the determination of the recoverable
amount of the Fort Hills CGU. These procedures also included, among others, testing management’s process for
determining the recoverable amount of the Fort Hills CGU, including evaluating the appropriateness of the discounted
cash flow model, testing the completeness and accuracy of underlying data and evaluating the reasonableness of the
significant assumptions used in the discounted cash flow model. Evaluating the reasonableness of management’s
assumptions involved considering their consistency with (i) external market and industry data for commodity prices
and the foreign exchange rate, and (ii) recent actual results, market data and when available, other third party
information, for mine production, operating costs and capital expenditures. The work of management’s specialists was
used in performing the procedures to evaluate the reasonableness of oil reserves. As a basis for using this work,
management’s specialists’ qualifications were understood and the Company’s relationship with management’s
specialists was assessed. The procedures performed also included evaluation of the methods and assumptions used
by management’s specialists, tests of the data used by management’s specialists, and an evaluation of their findings.
Professionals with specialized skill and knowledge were used to assist in the evaluation of the discount rate.
/s/PricewaterhouseCoopers LLP
Chartered Professional Accountants
Vancouver, Canada
February 23, 2022
We have served as the Company's auditor since 1964.
76 Teck 2021 Annual Report | Purpose Driven
Consolidated Statements of Income (Loss) Years ended December 31
(CAD$ in millions, except for share data)
Revenue (Note 5)
Cost of sales
Gross profit
Other operating income (expenses)
General and administration
Exploration
Research and innovation
Impairment reversal (asset impairment) (Note 7(a))
Other operating income (expense) (Note 8)
Profit (loss) from operations
Finance income (Note 9)
Finance expense (Note 9)
Non-operating income (expense) (Note 10)
Share of loss of associates and joint ventures (Note 14)
Profit (loss) before taxes
Recovery of (provision for) income taxes (Note 21(a))
2021
2020
$
13,481
$
8,948
(8,400)
5,081
(174)
(65)
(129)
215
(78)
4,850
5
(215)
(105)
(3)
4,532
(1 ,617)
(7,615)
1,333
(132)
(45)
(97)
(1,244)
(725)
(910)
10
(278)
43
(1)
(1,136)
192
Profit (loss) for the year
$
2,915
$
(944)
Profit (loss) attributable to:
Shareholders of the company
Non-controlling interests
Profit (loss) for the year
Earnings (loss) per share (Note 24(f))
Basic
Diluted
Weighted average shares outstanding (millions)
Weighted average diluted shares outstanding (millions)
Shares outstanding at end of year (millions)
The accompanying notes are an integral part of these financial statements.
$
2,868
47
$
(864)
(80)
$
2 ,915
$
(944)
$
$
$
$
5.39
5.31
532.3
540.3
534.2
(1.62)
(1.62)
534.4
534.4
531.1
Consolidated Financial Statements
77
Consolidated Statements of Comprehensive Income (Loss) Years ended December 31
(CAD$ in millions)
Profit (loss) for the year
2021
2020
$
2,915
$
(944)
Other comprehensive income (loss) for the year
Items that may be reclassified to profit (loss)
Currency translation differences (net of taxes of $(2) and $(17))
Change in fair value of debt securities (net of taxes of $nil and $nil)
Items that will not be reclassified to profit (loss)
Change in fair value of marketable equity securities (net of taxes of $1 and $(3))
Remeasurements of retirement benefit plans (net of taxes of $(91) and $29)
Total other comprehensive income (loss) for the year
(43)
(2)
(45)
(4)
171
167
122
(100)
—
(100)
24
(50)
(26)
(126)
Total comprehensive income (loss) for the year
$
3,037
$
(1,070)
Total other comprehensive income (loss) attributable to:
Shareholders of the company
Non-controlling interests
Total comprehensive income (loss) attributable to:
Shareholders of the company
Non-controlling interests
The accompanying notes are an integral part of these financial statements.
$
$
$
$
126
(4)
(112)
(14)
122
$
(126)
$
2,994
43
(976)
(94)
$
3,037
$
(1,070)
78 Teck 2021 Annual Report | Purpose Driven
Consolidated Statements of Cash Flows Years ended December 31
(CAD$ in millions)
Operating activities
Profit (loss) for the year
Depreciation and amortization
Provision for (recovery of) income taxes
(Impairment reversal) asset impairment
Gain on sale of investments and assets
Loss on debt redemption or purchase
Net finance expense
Income taxes paid
Remeasurement of decommissioning and restoration provisions for closed operations
QB2 variable consideration to IMSA and ENAMI
Other
Net change in non-cash working capital items
Investing activities
Expenditures on property, plant and equipment
Capitalized production stripping costs
Expenditures on investments and other assets
Proceeds from investments and assets
Financing activities
Proceeds from debt
Revolving credit facilities
Redemption, purchase or repayment of debt
Repayment of lease liabilities
QB2 advances from SMM/SC
Interest and finance charges paid
Issuance of Class B subordinate voting shares
Purchase and cancellation of Class B subordinate voting shares
Dividends paid
Contributions from non-controlling interests
Distributions to non-controlling interests
Other liabilities
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
2021
2020
$
2,915
1,583
1 ,617
(215)
(4)
–
210
(849)
35
141
179
(874)
4,738
(4,046)
(667)
(160)
54
$
(944)
1,510
(192)
1,244
(75)
11
268
(233)
169
(56)
102
(241)
1,563
(3,129)
(499)
(190)
146
(4,819)
(3,672)
1,639
(335)
(155)
(139)
326
(400)
50
–
(106)
113
(57)
120
1,056
2
977
450
2,426
363
(457)
(163)
41
(363)
1
(207)
(106)
2
(9)
—
1,528
5
(576)
1,026
Cash and cash equivalents at end of year
$
1,427
$
450
Supplemental cash flow information (Note 11)
The accompanying notes are an integral part of these financial statements.
Consolidated Financial Statements
79
2021
2020
$
1,427
6
1 ,981
2,390
299
6,103
1 ,571
1,060
37,382
161
1,091
$
450
14
1 ,31 2
1,872
352
4,000
1,269
1,067
33,578
271
1,093
$
47,368
$
41,278
$
3,255
213
127
165
3,760
7, 161
567
1,263
5,973
517
4,354
$
2,909
115
119
102
3,245
6,140
573
934
5,383
564
3,731
23,595
20,570
23,005
768
23,773
20,039
669
20,708
$
47,368
$
41,278
Consolidated Balance Sheets As at December 31
(CAD$ in millions)
Assets
Current assets
Cash and cash equivalents (Note 11)
Current income taxes receivable
Trade and settlement receivables
Inventories (Note 12)
Prepaids and other current assets
Financial and other assets (Note 13)
Investments in associates and joint ventures (Note 14)
Property, plant and equipment (Note 15)
Deferred income tax assets (Note 21(b))
Goodwill (Note 16)
Liabilities and Equity
Current liabilities
Trade accounts payable and other liabilities (Note 17)
Current portion of debt (Note 18)
Current portion of lease liabilities (Note 19(c))
Current income taxes payable
Debt (Note 18)
Lease liabilities (Note 19(c))
QB2 advances from SMM/SC (Note 20)
Deferred income tax liabilities (Note 21(b))
Retirement benefit liabilities (Note 22(a))
Provisions and other liabilities (Note 23)
Equity
Attributable to shareholders of the company
Attributable to non-controlling interests (Note 25)
Contingencies (Note 26)
Commitments (Note 27)
The accompanying notes are an integral part of these financial statements.
Approved on behalf of the Board of Directors
Una M. Power
Chair of the Audit Committee
Tracey L. McVicar
Director
80 Teck 2021 Annual Report | Purpose Driven
Consolidated Statements of Changes in Equity Years ended December 31
(CAD$ in millions)
Class A common shares
Class B subordinate voting shares
Beginning of year
Share repurchases
Issued on exercise of options
End of year
Retained earnings
Beginning of year
Profit (loss) for the year attributable to shareholders of the company
Dividends paid (Note 24(g))
Share repurchases
Remeasurements of retirement benefit plans
End of year
Contributed surplus
Beginning of year
Share option compensation expense (Note 24(c))
Transfer to Class B subordinate voting shares on exercise of options
End of year
Accumulated other comprehensive income attributable
to shareholders of the company (Note 24(e))
Beginning of year
Other comprehensive income (loss)
Less remeasurements of retirement benefit plans recorded in retained earnings
End of year
Non-controlling interests (Note 25)
Beginning of year
Profit (loss) for the year attributable to non-controlling interests
Other comprehensive income (loss) attributable to non-controlling interests
Contributions from non-controlling interests
Distributions to non-controlling interests
End of year
Total equity
The accompanying notes are an integral part of these financial statements.
2021
2020
$
6
$
6
6,134
–
67
6,201
13,410
2,868
(106)
–
171
16,343
242
28
(17)
253
247
126
(171)
202
669
47
(4)
113
(57)
768
6,323
(190)
1
6,134
14,447
(864)
(106)
(17)
(50)
13,410
219
23
–
242
309
(112)
50
247
770
(80)
(14)
2
(9)
669
$
23,773
$
20,708
Consolidated Financial Statements
81
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
1. Nature of Operations
Teck Resources Limited and its subsidiaries (Teck, we, us or our) are engaged in mining and related activities including
research, exploration and development, processing, smelting, refining and reclamation. Our major products are
copper, zinc, steelmaking coal and blended bitumen. We also produce lead, precious metals, molybdenum, fertilizers
and other metals. Metal products are sold as refined metals or concentrates.
Teck is a Canadian corporation and our registered office is at Suite 3300, 550 Burrard Street, Vancouver, British
Columbia, Canada, V6C 0B3.
2. Basis of Preparation and New IFRS Pronouncements
a) Basis of Preparation
These annual consolidated financial statements have been prepared by management in accordance with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and were
approved by the Board of Directors on February 23, 2022.
b) New IFRS Pronouncements
Amendments to IAS 16 – Property, Plant and Equipment: Proceeds before Intended Use
In May 2020, the IASB issued amendments to IAS 16, Property, Plant and Equipment (IAS 16). The amendments prohibit
a company from deducting from the cost of property, plant and equipment amounts received from selling items
produced while the company is preparing the asset for its intended use. Instead, a company will recognize such sales
proceeds and related costs in profit (loss). An entity is required to apply these amendments for annual reporting
periods beginning on or after January 1, 2022. The amendments are applied retrospectively only to items of property,
plant and equipment that are available for use after the beginning of the earliest period presented in the financial
statements in which the entity first applies the amendments.
As at December 31, 2021, we have completed our analysis of these amendments and have determined that there will
be no retrospective effect on our 2021 financial results on adoption of the amendments. Since the amendments were
effective from January 1, 2022, we expect them to have an effect on the accounting related to the sale of products
during the commissioning phase of our Quebrada Blanca Phase 2 project (QB2).
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Interest Rate Benchmark Reform – Phase 2
In August 2020, the IASB issued amendments to IFRS 9, Financial Instruments (IFRS 9), IAS 39, Financial Instruments:
Recognition and Measurement (IAS 39), IFRS 7, Financial Instruments: Disclosures (IFRS 7), IFRS 4, Insurance Contracts
(IFRS 4) and IFRS 16, Leases (IFRS 16) as a result of Phase 2 of the IASB’s Interest Rate Benchmark Reform project. The
amendments address issues arising in connection with reform of benchmark interest rates, including the replacement
of one benchmark rate with an alternative one. The amendments were effective January 1, 2021.
For the year ended December 31, 2021, these amendments did not affect our financial statements, as we have not yet
transitioned any agreements that are exposed to USD London Interbank Offered Rate (LIBOR) to an alternative
benchmark interest rate. Language was included in our sustainability-linked revolving credit facility when we extended
its maturity in 2021, which references the Term Secured Overnight Financing Rate (Term SOFR) as the replacement rate
for LIBOR. Term SOFR was formally recommended by the Alternative Reference Rates Committee (a committee
convened by the U.S. Federal Reserve Board) as the recommended fallback for LIBOR based loans. Term SOFR is
expected to be economically equivalent to LIBOR, allowing for use of the practical expedient under IFRS 9. We continue
to work with our lenders on the replacement of the affected rates for our other significant financial instruments, which
is not expected to result in a significant change in our interest rate risk management strategy or our interest rate risk.
Our sustainability-linked revolving credit facility, QB2 project financing facility, Compañía Minera Antamina S.A.
(Antamina) loan agreement and QB2 advances from Sumitomo Metal Mining Co., Ltd. and Sumitomo Corporation
(together referred to as SMM/SC) are our most significant financial instruments that are exposed to LIBOR. These
82 Teck 2021 Annual Report | Purpose Driven
financial instruments are based on LIBOR settings that are currently scheduled to cease publication after June 30,
2023. We will continue to monitor developments on alternative benchmark interest rates and we expect to transition to
alternative rates as widespread market practice is established.
Amendments to IAS 12 – Income Taxes
In May 2021, the IASB issued amendments to IAS 12, Income Taxes (IAS 12). The amendments will require companies to
recognize deferred tax on particular transactions that, on initial recognition, give rise to equal amounts of taxable and
deductible temporary differences. The proposed amendments will typically apply to transactions such as leases for the
lessee and decommissioning and restoration obligations related to assets in operation. An entity is required to apply
these amendments for annual reporting periods beginning on or after January 1, 2023. Early application is permitted. The
amendments are applied to transactions that occur on or after the beginning of the earliest comparative period presented.
These amendments do not have an effect on our financial statements, as we currently follow the accounting treatment
proposed by the amendments. Therefore, we have early-adopted these amendments on January 1, 2022.
3. Summary of Significant Accounting Policies
The significant accounting policies applied in the preparation of these consolidated financial statements are set out
below. These policies have been consistently applied to all periods presented, unless otherwise stated.
Basis of Presentation
Our consolidated financial statements include the accounts of Teck and all of its subsidiaries. Our significant
operating subsidiaries include Teck Metals Ltd. (TML), Teck Alaska Incorporated (TAK), Teck Highland Valley Copper
Partnership (Highland Valley Copper), Teck Coal Partnership (Teck Coal), Compañía Minera Teck Quebrada Blanca S.A.
(QBSA or Quebrada Blanca) and Compañía Minera Teck Carmen de Andacollo (Carmen de Andacollo).
All subsidiaries are entities that we control, either directly or indirectly. Control is defined as the exposure, or rights,
to variable returns from involvement with an investee and the ability to affect those returns through power over the
investee. Power over an investee exists when our existing rights give us the ability to direct the activities that
significantly affect the investee’s returns. This control is generally evidenced through owning more than 50% of the
voting rights or currently exercisable potential voting rights of a company’s share capital. All of our intra-group
balances and transactions, including unrealized profits and losses arising from intra-group transactions, have been
eliminated in full. For subsidiaries that we control but do not own 100% of, the net assets and net profit (loss)
attributable to outside shareholders are presented as amounts attributable to non-controlling interests in the
consolidated balance sheet and consolidated statements of income (loss) and comprehensive income (loss).
Certain of our business activities are conducted through joint arrangements. Our interests in joint operations include
Galore Creek Partnership (Galore Creek, 50% share) and Fort Hills Energy L.P. (Fort Hills, 21.3% share), which operate in
Canada and Antamina (22.5% share), which operates in Peru. We account for our interests in these joint operations by
recording our share of the respective assets, liabilities, revenue, expenses and cash flows. We also have an interest in
a joint venture, NuevaUnión SpA (NuevaUnión, 50% share), in Chile that we account for using the equity method (Note 14).
All dollar amounts are presented in Canadian dollars unless otherwise specified.
Interests in Joint Arrangements
A joint arrangement can take the form of a joint venture or joint operation. All joint arrangements involve a contractual
arrangement that establishes joint control, which exists only when decisions about the activities that significantly
affect the returns of the investee require unanimous consent of the parties sharing control. A joint operation is a joint
arrangement in which we have rights to the assets and obligations for the liabilities relating to the arrangement. A joint
venture is a joint arrangement in which we have rights to only the net assets of the arrangement.
Joint ventures are accounted for in accordance with the policy “Investments in Associates and Joint Ventures”. Joint
operations are accounted for by recognizing our share of the assets, liabilities, revenue, expenses and cash flows of
the joint operation in our consolidated financial statements.
Consolidated Financial Statements
83
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
3. Summary of Significant Accounting Policies (continued)
Investments in Associates and Joint Ventures
Investments over which we exercise significant influence but do not control or jointly control are associates. Investments
in associates are accounted for using the equity method, except when classified as held for sale. Investments in joint
ventures, as determined in accordance with the policy “Interests in Joint Arrangements”, are also accounted for using
the equity method.
The equity method involves recording the initial investment at cost and subsequently adjusting the carrying value
of the investment for our proportionate share of the profit (loss), other comprehensive income (loss) and any other
changes in the associate’s or joint venture’s net assets, such as further investments or dividends.
Our proportionate share of the associate’s or joint venture’s profit (loss) and other comprehensive income (loss) is
based on its most recent financial statements. Adjustments are made to align any inconsistencies between our
accounting policies and our associate’s or joint venture’s policies before applying the equity method. Adjustments are
also made to account for depreciable assets based on their fair values at the acquisition date of the investment and
for any impairment losses recognized by the associate or joint venture.
If our share of the associate’s or joint venture’s losses were equal to or exceeded our investment in the associate or
joint venture, recognition of further losses would be discontinued. After our interest is reduced to zero, additional
losses would be provided for and a liability recognized only to the extent that we have incurred legal or constructive
obligations to provide additional funding or to make payments on behalf of the associate or joint venture. If the
associate or joint venture subsequently reports profits, we resume recognizing our share of those profits only when
we have a positive interest in the entity.
At each balance sheet date, we consider whether there is objective evidence of impairment in associates and joint
ventures. If there is such evidence, we determine the amount of impairment to record, if any, in relation to the
associate or joint venture.
Foreign Currency Translation
The functional currency of each of our subsidiaries and our joint operations, joint ventures and associates is the
currency of the primary economic environment in which the entity operates. Transactions in foreign currencies are
translated to the functional currency of the entity at the exchange rate in existence at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated at the
period end date exchange rates.
The functional currency of Teck, the parent entity, is the Canadian dollar, which is also the presentation currency of our
consolidated financial statements.
Foreign operations are translated from their functional currencies, generally the U.S. dollar, into Canadian dollars on
consolidation. Items in the statements of income (loss) and other comprehensive income (loss) are translated using
weighted average exchange rates that reasonably approximate the exchange rate at the transaction date. Items on the
balance sheet are translated at the closing spot exchange rate. Exchange differences on the translation of the net
assets of entities with functional currencies other than the Canadian dollar, and any offsetting exchange differences
on debt used to hedge those assets, are recognized in a separate component of equity through other comprehensive
income (loss).
Exchange differences that arise relating to long-term intra-group balances that form part of the net investment in a
foreign operation are also recognized in this separate component of equity through other comprehensive income (loss).
On disposition or partial disposition of a foreign operation, the cumulative amount of related exchange differences
recorded in a separate component of equity is recognized in the statement of income (loss).
84 Teck 2021 Annual Report | Purpose Driven
Revenue
Our revenue consists of sales of copper, zinc and lead concentrates, steelmaking coal, refined zinc, lead and silver
and blended bitumen. We also sell other by-products, including molybdenum concentrates, various refined specialty
metals, chemicals and fertilizers. Our performance obligations relate primarily to the delivery of these products to our
customers, with each separate shipment representing a separate performance obligation.
Revenue, including revenue from the sale of by-products, is recognized at the point in time when the customer obtains
control of the product. Control is achieved when a product is delivered to the customer, we have a present right to
payment for the product, significant risks and rewards of ownership have transferred to the customer according to
contract terms and there is no unfulfilled obligation that could affect the customer’s acceptance of the product.
Base metal concentrates
For copper, zinc and lead concentrates, control of the product generally transfers to the customer when an individual
shipment parcel is loaded onto a carrier accepted by the customer. We sell a majority of our concentrates on
commercial terms where we are responsible for providing freight services after the date at which control of the
product passes to the customer. We are the principal to this freight performance obligation. A minority of zinc
concentrate sales are made on consignment. For consignment transactions, control of the product transfers to the
customer and revenue is recognized at the time the product is consumed in the customer’s process.
The majority of our metal concentrates are sold under pricing arrangements where final prices are determined by
quoted market prices in a period subsequent to the date of sale. For these sales, revenue is recorded based on the
estimated consideration to be received at the date of sale, with reference to relevant commodity market prices.
Adjustments are made to settlement receivables in subsequent periods based on movements in quoted commodity
prices up to the date of final pricing. This adjustment mechanism is based on the market price of the commodity and,
accordingly, the changes in value of the settlement receivables are not considered to be revenue from contracts with
customers. The changes in fair value of settlement receivables are recorded in other operating income (expense).
Metal concentrate sales are billed based on provisional weights and assays upon the passage of control to the customer.
The first provisional invoice is billed to the customer at the time of transfer of control. As final prices, weights and
assays are received, additional invoices are issued and collected. In general, consideration is promptly collected from
customers; however, the payment terms are customer-specific and subject to change based on market conditions and
other factors. We generally retain title to these products until we receive the first contracted payment, which is
typically received shortly after loading or shortly after arrival at the destination port, solely to manage the credit risk of
the amounts due to us. This retention of title does not preclude the customer from obtaining control of the product.
Steelmaking coal
For steelmaking coal, control of the product generally transfers to the customer when an individual shipment parcel is
loaded onto a carrier accepted by or directly contracted by the customer. For a majority of steelmaking coal sales, we
are not responsible for the provision of shipping or product insurance after the transfer of control. For certain sales, we
arrange shipping on behalf of our customers and are the agent to these shipping transactions.
Steelmaking coal is sold under spot or average pricing contracts. For spot price contracts, pricing is final when revenue
is recognized. For average pricing contracts, the final pricing is determined based on quoted steelmaking coal price
assessments over a specific period. Control of the goods may transfer and revenue may be recognized before, during
or subsequent to the period in which final average pricing is determined. For all steelmaking coal sales under average
pricing contracts where pricing is not finalized when revenue is recognized, revenue is recorded based on estimated
consideration to be received at the date of sale with reference to steelmaking coal price assessments. For average
pricing contracts, adjustments are made to settlement receivables in subsequent periods based on published price
assessments up to the date of final pricing. This adjustment mechanism is based on the market price of the commodity
and, accordingly, the changes in value of the settlement receivables are not considered to be revenue from contracts
with customers. The changes in fair value of settlement receivables are recorded in other operating income (expense).
Consolidated Financial Statements
85
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
3. Summary of Significant Accounting Policies (continued)
Steelmaking coal sales are billed based on final quality and quantity measures upon the passage of control to the
customer. If pricing is not finalized when control of the product is transferred, a subsequent invoice is issued when pricing is
finalized. The payment terms generally require prompt collection from customers; however, payment terms are customer-
specific and subject to change based on market conditions and other factors. We generally retain title to these products
until we receive the first contracted payment, which is typically received shortly after loading, solely to manage the credit
risk of the amounts due to us. This retention of title does not preclude the customer from obtaining control of the product.
Refined metals
For sales of refined metals, control of the product transfers to the customer when the product is loaded onto a carrier
accepted by the customer. For these products, loading generally coincides with the transfer of title.
Our refined metals are sold under spot or average pricing contracts. For spot sales contracts, pricing is final when
revenue is recognized. For refined metal sales contracts where pricing is not finalized when revenue is recognized,
revenue is recorded based on the estimated consideration to be received at the date of sale with reference to
commodity market prices. Adjustments are made to settlement receivables in subsequent periods based on
movements in quoted commodity prices up to the date of final pricing. This adjustment mechanism is based on
the market price of the commodity and, accordingly, the changes in value of the settlement receivables are not
considered to be revenue from contracts with customers. The changes in fair value of settlement receivables are
recorded in other operating income (expense).
We sell a portion of our refined metals on commercial terms where we are responsible for providing freight services after
the date at which control of the product passes to the customer. We are the principal to this freight performance obligation.
Refined metal sales are billed based on final specification measures upon the passage of control to the customer. If
pricing is not finalized when control of the product is transferred, a subsequent invoice is issued when pricing is finalized.
In general, consideration is promptly collected from customers; however, the payment terms are customer-specific
and subject to change based on market conditions and other factors.
Blended bitumen
For blended bitumen, control of the product generally transfers to the customer when the product passes the delivery
point as specified in the contract, which normally coincides with title and risk transfer to the customer. The majority of
our blended bitumen is sold under pricing arrangements where final prices are determined based on commodity price
indices that are finalized at or near the date of sale. Payments for blended bitumen sales are usually due and settled
within 30 days. Our revenue for blended bitumen is net of royalty payments to governments.
Financial Instruments
We recognize financial assets and liabilities on the balance sheet when we become a party to the contractual provisions
of the instrument.
Cash and cash equivalents
Cash and cash equivalents include cash on account, demand deposits and money market investments with maturities
from the date of acquisition of three months or less, which are readily convertible to known amounts of cash and are
subject to insignificant changes in value. Cash is classified as a financial asset that is subsequently measured at
amortized cost. Cash equivalents are classified as subsequently measured at amortized cost, except for money
market investments, which are classified as subsequently measured at fair value through profit (loss).
Trade receivables
Trade receivables relate to amounts owing from sales under our spot pricing contracts for steelmaking coal, refined
metals, blended bitumen, chemicals and fertilizers. These receivables are non-interest bearing and are recognized at
face amount, except when fair value is materially different and are subsequently measured at amortized cost. Trade
receivables recorded are net of lifetime expected credit losses.
86 Teck 2021 Annual Report | Purpose Driven
Settlement receivables
Settlement receivables arise from base metal concentrate sales contracts and average pricing steelmaking coal
contracts, where amounts receivable vary based on underlying commodity prices or steelmaking coal price assessments.
Settlement receivables are classified as fair value through profit (loss) and are recorded at fair value at each reporting
period based on quoted commodity prices or published price assessments up to the date of final pricing. The changes
in fair value are recorded in other operating income (expense).
Investments in marketable equity securities
Investments in marketable equity securities are classified, at our election, as subsequently measured at fair value through
other comprehensive income (loss). For new investments in marketable equity securities, we can elect the same
classification as subsequently measured at fair value through other comprehensive income (loss), or we can elect to
classify an investment as at fair value through profit (loss). This election can be made on an investment-by-investment
basis and is irrevocable. Investment transactions are recognized on the trade date, with transaction costs included in
the underlying balance. Fair values are determined by reference to quoted market prices at the balance sheet date.
When investments in marketable equity securities subsequently measured at fair value through other comprehensive
income (loss) are disposed of, the cumulative gains and losses recognized in other comprehensive income (loss) are
not recycled to profit (loss) and remain within equity. Dividends are recognized in profit (loss). These investments are
not assessed for impairment.
Investments in debt securities
Investments in debt securities are classified as subsequently measured at fair value through other comprehensive income
(loss) and recorded at fair value. Investment transactions are recognized on the trade date, with transaction costs included
in the underlying balance. Fair values are determined by reference to quoted market prices at the balance sheet date.
Unrealized gains and losses on debt securities are recognized in other comprehensive income (loss) until investments
are disposed of and the cumulative gains and losses recognized in other comprehensive income (loss) are reclassified
from equity to profit (loss) at that time. Loss allowances and interest income are recognized in profit (loss).
Trade payables
Trade payables are non-interest bearing if paid when due and are recognized at face amount, except when fair value is
materially different. Trade payables are subsequently measured at amortized cost.
Debt
Debt is initially recorded at fair value, net of transaction costs. Debt is subsequently measured at amortized cost,
calculated using the effective interest rate method.
Derivative instruments
Derivative instruments, including embedded derivatives in executory contracts or financial liability contracts, are
classified as at fair value through profit (loss) and, accordingly, are recorded on the balance sheet at fair value.
Unrealized gains and losses on derivatives not designated in a hedging relationship are recorded as part of other
operating income (expense) or non-operating income (expense) in profit (loss) depending on the nature of the
derivative. Fair values for derivative instruments are determined using inputs based on market conditions existing at
the balance sheet date or settlement date of the derivative. Derivatives embedded in non-derivative contracts are
recognized separately unless they are closely related to the host contract.
Expected credit losses
For trade receivables, we apply the simplified approach to determining expected credit losses, which requires expected
lifetime losses to be recognized upon initial recognition of the receivables.
Loss allowances on investments in debt securities are initially assessed based on the expected 12-month credit loss.
At each reporting date, we assess whether the credit risk for our debt securities has increased significantly since initial
Consolidated Financial Statements
87
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
3. Summary of Significant Accounting Policies (continued)
recognition. If the credit risk has increased significantly since initial recognition, the loss allowance is adjusted to be
based on the lifetime expected credit losses.
Hedging
Certain derivative investments may qualify for hedge accounting. At the inception of hedge relationships, we
document the economic relationship between hedging instruments and hedged items and our risk management
objective and strategy for undertaking the hedge transactions.
For fair value hedges, any gains or losses on both the hedged item and the hedging instrument are recognized in the
same line item in profit (loss).
For cash flow hedges, any unrealized gains or losses on the hedging instrument relating to the effective portion of the
hedge are initially recorded in other comprehensive income (loss). Where a cash flow hedge relates to a transaction
where a non-financial asset or liability is recognized, accumulated gains or losses are recognized directly in the
carrying amount of the non-financial asset or liability. The gains or losses are reclassified to profit (loss) in the same
period or periods in which the hedged expected future cash flows affect profit (loss), when the hedged item ceases to
exist or when the hedge is determined to be ineffective.
For hedges of net investments in foreign operations, any foreign exchange gains or losses on the hedging instrument
relating to the effective portion of the hedge are initially recorded in other comprehensive income (loss). Gains and
losses are recognized in profit (loss) on the ineffective portion of the hedge, or when there is a disposition or partial
disposition of a foreign operation being hedged.
Inventories
Finished products, work in process, raw materials and supplies inventories are valued at the lower of weighted
average cost and net realizable value. Work in process inventory includes inventory in the milling, smelting or refining
process and stockpiled ore at mining operations. Raw materials include concentrates for use at smelting and refining
operations. For our oil sands mining and processing operation, raw materials consist of diluent used in blending, work
in process inventory consists of raw bitumen and finished products consist of blended bitumen.
For work in process and finished product inventories, cost includes all direct costs incurred in production, including
direct labour and materials, freight, depreciation and amortization and directly attributable overhead costs.
Production stripping costs that are not capitalized are included in the cost of inventories as incurred. Depreciation and
amortization of capitalized production stripping costs are included in the cost of inventory. For supplies inventories,
cost includes acquisition, freight and other directly attributable costs.
When our operations are producing at reduced levels, fixed overhead costs are only allocated to inventory based on
normal production levels.
When inventories have been written down to net realizable value, we make a new assessment of net realizable value
in each subsequent period. If the circumstances that caused the write-down no longer exist, the remaining amount of
the write-down on inventory not yet sold is reversed.
We use both joint-product and by-product costing for work in process and finished product inventories. Joint-product
costing is applied to primary products where the profitability of the operations is dependent upon the production of
these products. Joint-product costing allocates total production costs based on the relative values of the products.
By-product costing is used for products that are not the primary products produced by the operation. The by-products
are allocated only the incremental costs of processes that are specific to the production of that product.
88 Teck 2021 Annual Report | Purpose Driven
Property, Plant and Equipment
Land, buildings, plant and equipment
Land is recorded at cost and buildings, plant and equipment are recorded at cost less accumulated depreciation and
impairment losses. Cost includes the purchase price and the directly attributable costs to bring the assets to the
location and condition necessary for them to be capable of operating in the manner intended by management.
Depreciation of mobile equipment, buildings used for production and plant and processing equipment at our mining
operations is calculated on a units-of-production basis. Depreciation of buildings not used for production and of plant
and equipment at our smelting operations is calculated on a straight-line basis over the assets’ estimated useful lives.
Where components of an asset have different useful lives, depreciation is calculated on each component separately.
Depreciation commences when an asset is ready for its intended use. Estimates of remaining useful lives and residual
values are reviewed annually. Changes in estimates are accounted for prospectively.
The expected useful lives of assets depreciated on a straight-line basis are as follows:
• Buildings and equipment (not used for production)
1—43 years
• Plant and equipment (smelting operations)
3—30 years
Mineral properties and mine development costs
The cost of acquiring and developing mineral properties or property rights, including pre-production waste rock stripping
costs related to mine development and costs incurred during production to increase future output, are capitalized.
Waste rock stripping costs incurred in the production phase of a surface mine are recorded as capitalized production
stripping costs within property, plant and equipment when it is probable that the stripping activity will improve access
to the orebody, when the component of the orebody or pit to which access has been improved can be identified and
when the costs relating to the stripping activity can be measured reliably. When the actual waste-to-ore stripping ratio
in a period is greater than the expected life-of-component waste-to-ore stripping ratio for that component, the excess
is recorded as capitalized production stripping costs.
Once available for use, mineral properties and mine development costs are depreciated on a units-of-production basis
over the proven and probable reserves to which they relate. Since the stripping activity within a component of a mine
improves access to the reserves of the same component, capitalized production stripping costs incurred during the
production phase of a mine are depreciated on a units-of-production basis over the proven and probable reserves
expected to be mined from the same component.
Exploration and evaluation costs
Property acquisition costs are capitalized. Other exploration and evaluation costs are capitalized if they relate to
specific properties for which resources, as defined under National Instrument 43-101, Standards of Disclosure for
Mineral Projects, exist or are near a specific property with a defined resource and it is expected that the expenditure
can be recovered by future exploitation or sale. All other costs are charged to profit (loss) in the year in which they are
incurred. Capitalized exploration and evaluation costs are considered to be tangible assets. These assets are not
depreciated, as they are not currently available for use. When proven and probable reserves are determined and
development is approved, capitalized exploration and evaluation costs are reclassified to mineral properties within
property, plant and equipment.
Costs of oil sands properties
The costs of acquiring, exploring, evaluating and developing oil sands properties are capitalized when it is expected
that these costs will be recovered through future exploitation or sale of the property. Capitalized development costs of
oil sands properties are tangible assets. Assets that are not yet available for use are not depreciated. When proven and
probable reserves are determined and development is approved, capitalized development costs for oil sands properties
are reclassified to mineral properties within property, plant and equipment.
Consolidated Financial Statements
89
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
3. Summary of Significant Accounting Policies (continued)
Construction in progress
Assets in the course of construction are capitalized as construction in progress. On completion, the cost of construction
is transferred to the appropriate category of property, plant and equipment and depreciation commences when the
asset is available for its intended use.
Repairs and maintenance
Repairs and maintenance costs, including shutdown maintenance costs, are charged to expense as incurred, except
when these repairs significantly extend the life of an asset or result in a significant operating improvement. In these
instances, the portion of these repairs relating to the betterment is capitalized as part of plant and equipment.
Borrowing costs
We capitalize borrowing costs that are directly attributable to the acquisition, construction or production of an asset
that takes a substantial period of time to construct or prepare for its intended use. We begin capitalizing borrowing
costs when there are borrowings, expenditures are incurred and activities are undertaken to prepare the asset for its
intended use. The amount of borrowing costs capitalized cannot exceed the actual amount of borrowing costs
incurred during the period. All other borrowing costs are expensed as incurred.
We suspend the capitalization of borrowing costs when we suspend the active development of a qualifying asset for
an extended period. Capitalization recommences when active development resumes. We discontinue the capitalization
of borrowing costs when substantially all of the activities necessary to prepare the qualifying asset for its intended use
or sale are complete. Capitalized borrowing costs are amortized over the useful life of the related asset.
Impairment and impairment reversal of non-current assets
The carrying amounts of assets included in property, plant and equipment and intangible assets are reviewed for impairment
whenever facts and circumstances indicate that the recoverable amounts may be less than the carrying amounts. If there
are indicators of impairment, the recoverable amount of the asset is estimated in order to determine the extent of any
impairment. Where the asset does not generate cash flows that are independent from other assets, the recoverable amount
of the cash-generating unit (CGU) to which the asset belongs is determined. The recoverable amount of an asset or CGU is
determined as the higher of its fair value less costs of disposal (FVLCD) and its value in use. An impairment loss exists if the
asset’s or CGU’s carrying amount exceeds the estimated recoverable amount and is recorded as an expense immediately.
Fair value is the price that would be received from selling an asset in an orderly transaction between market
participants at the measurement date. Costs of disposal are incremental costs directly attributable to the disposal of
an asset. For mining assets, when a binding sale agreement is not readily available, FVLCD is usually estimated using a
discounted cash flow approach, unless comparable market transactions on which to estimate fair value are available.
Estimated future cash flows are calculated using estimated future commodity prices, reserves and resources and
operating and capital costs. All inputs used are those that an independent market participant would consider
appropriate. Value in use is determined as the present value of the future cash flows expected to be derived from
continuing use of an asset or CGU in its present form. These estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset or CGU for which estimates of future cash flows have not been adjusted. A value in use
calculation uses a pre-tax discount rate and a FVLCD calculation uses a post-tax discount rate.
Indicators of impairment for exploration and evaluation assets are assessed on a project-by-project basis or as part of
the mining operation to which they relate.
Tangible or intangible assets that have been impaired in prior periods are tested for possible reversal of impairment
whenever events or significant changes in circumstances indicate that the impairment may have reversed. Indicators
of a potential reversal of an impairment loss mainly mirror the indicators present when the impairment was originally
recorded. If the impairment has reversed, the carrying amount of the asset is increased to its recoverable amount, but
not beyond the carrying amount that would have been determined, net of depreciation, had no impairment loss been
recognized for the asset in prior periods. A reversal of an impairment loss is recognized in profit (loss) immediately.
90 Teck 2021 Annual Report | Purpose Driven
Intangible Assets
Intangible assets are mainly internally generated and primarily relate to our innovation and technology initiatives.
Development costs for internally generated intangible assets are capitalized when the product or process is clearly
defined, the technical feasibility and usefulness of the asset has been established, we are committed and have the
resources to complete the project and the costs can be reliably measured.
Intangible assets are recorded at cost less accumulated depreciation and impairment losses. Cost includes directly
attributable costs necessary to create, produce and prepare the asset to be capable of operating in the manner
intended by management. Costs associated with maintaining our innovation and technology initiatives, once
implemented, are recognized as an expense as incurred.
Finite life intangible assets are amortized on a straight-line basis over their useful lives. Amortization commences when
an asset is ready for its intended use. Estimates of remaining useful lives are reviewed annually. Changes in estimates are
accounted for prospectively. The expected useful lives of our finite life intangible assets are between 7 and 40 years.
Goodwill
We allocate goodwill arising from business combinations to each CGU or group of CGUs that are expected to receive
the benefits from the business combination. The carrying amount of the CGU or group of CGUs to which goodwill has
been allocated is tested annually for impairment or when there is an indication that the goodwill may be impaired. Any
impairment is recognized as an expense immediately. Should there be a recovery in the value of a CGU or group of
CGUs, any impairment of goodwill previously recorded is not subsequently reversed.
Leases
At the inception of a contract, we assess whether a contract is, or contains, a lease. A contract is, or contains, a lease
if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. We assess whether the contract involves the use of an identified asset, whether we have the right to
obtain substantially all of the economic benefits from use of the asset during the term of the arrangement and
whether we have the right to direct the use of the asset. At inception or on reassessment of a contract that contains
a lease component, we allocate the consideration in the contract to each lease component on the basis of their
relative stand-alone prices.
As a lessee, we recognize a right-of-use asset, which is included in property, plant and equipment, and a lease liability
at the commencement date of a lease. The right-of-use asset is initially measured at cost, which is comprised of the
initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus
any decommissioning and restoration costs, less any lease incentives received.
The right-of-use asset is subsequently depreciated from the commencement date to the earlier of the end of the
lease term, or the end of the useful life of the asset. In addition, the right-of-use asset may be reduced due to
impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
A lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted by the interest rate implicit in the lease or, if that rate cannot be readily determined, our incremental
borrowing rate. Lease liabilities include the net present value of lease payments, which are comprised of:
• Fixed payments, including in-substance fixed payments, less any lease incentives receivable
•
Variable lease payments that depend on an index or a rate, initially measured using the index or a rate as at the
commencement date
• Amounts expected to be payable under a residual value guarantee
• Exercise prices of purchase options if we are reasonably certain to exercise that option
• Payments of penalties for terminating the lease, if the lease term reflects us exercising an option to terminate the lease
The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change
in future lease payments arising from a change in an index or rate, or if there is a change in our estimate or assessment
of the expected amount payable under a residual value guarantee, purchase, extension or termination option. Variable
lease payments not included in the initial measurement of the lease liability are charged directly to profit (loss).
Consolidated Financial Statements
91
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
3. Summary of Significant Accounting Policies (continued)
We have elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term
of 12 months or less and leases of low-value assets. The lease payments associated with these leases are charged
directly to profit (loss) on a straight-line basis over the lease term.
Income Taxes
Taxes, comprising both income taxes and resource taxes, are accounted for as income taxes under IAS 12, Income Taxes
and are recognized in the statement of income (loss), except where they relate to items recognized in other
comprehensive income (loss) or directly in equity, in which case the related taxes are recognized in other comprehensive
income (loss) or equity.
Current taxes receivable or payable are based on estimated taxable income for the current year at the statutory tax rates
enacted, or substantively enacted, less amounts paid or received on account.
Deferred tax assets and liabilities are recognized based on temporary differences (the difference between the tax and
accounting values of assets and liabilities) and are calculated using enacted or substantively enacted tax rates for the
periods in which the differences are expected to reverse. The effect of changes in tax legislation, including changes in
tax rates, is recognized in the period of substantive enactment.
Deferred tax assets are recognized only to the extent where it is probable that the future taxable profits or capital
gains of the relevant entity or group of entities in a particular jurisdiction will be available, against which the assets can
be utilized.
Deferred tax liabilities are recognized for taxable temporary differences arising on investments in subsidiaries, joint
ventures and associates. However, we do not recognize such deferred tax liabilities where the timing of the reversal of
the temporary differences can be controlled without affecting our operations or business and where it is probable that
the temporary differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are not recognized if the temporary differences arise from the initial recognition of
goodwill or an asset or liability in a transaction, other than in a business combination, which will affect neither
accounting profit nor taxable profit. However, we recognize deferred tax on transactions that, on initial recognition,
give rise to equal amounts of taxable and deductible temporary differences.
We are subject to assessments by various taxation authorities, who may interpret tax legislation differently than we do. The
final amount of taxes to be paid depends on a number of factors, including the outcomes of audits, appeals or negotiated
settlements. We account for such differences based on our best estimate of the probable outcome of these matters.
Employee Benefits
Defined benefit pension plans
Defined benefit pension plan obligations are based on actuarial determinations. The projected unit credit method,
which sees each period of service as giving rise to an additional unit of benefit entitlement and measures each unit
separately to build up the final obligation, is used to determine the defined benefit obligations, the related current
service costs and, where applicable, the past service costs. Actuarial assumptions used in the determination of
defined benefit pension plan assets and liabilities are based upon our best estimates, including discount rates, salary
escalation, expected healthcare costs and retirement dates of employees.
Vested and unvested costs arising from past service following the introduction of changes to a defined benefit plan
are recognized immediately as an expense when the changes are made.
Actuarial gains and losses can arise from differences between expected and actual outcomes or changes in actuarial
assumptions. Actuarial gains and losses, changes in the effect of the asset ceiling and return on plan assets are
collectively referred to as remeasurements of retirement benefit plans and are recognized immediately through other
comprehensive income (loss) and directly into retained earnings. Measurement of our net defined benefit asset is
92 Teck 2021 Annual Report | Purpose Driven
limited to the lower of the surplus of assets less liabilities in the defined benefit plan and the asset ceiling less
liabilities in the defined benefit plan. The asset ceiling is the present value of the expected economic benefit available
to us in the form of refunds from the plan or reductions in future contributions to the plan.
We apply one discount rate to the net defined benefit asset or liability for the purposes of determining the interest
component of the defined benefit cost. This interest component is recorded as part of finance expense. Depending on
the classification of the salary of plan members, current service costs and past service costs are included in cost of
sales, general and administration expenses, exploration expenses or research and innovation expenses.
Defined contribution pension plans
The cost of providing benefits through defined contribution plans is charged to profit (loss) as the obligation to
contribute is incurred.
Non-pension post-retirement plans
We provide healthcare benefits for certain employees when they retire. Non-pension post-retirement plan obligations
are based on actuarial determinations. The cost of these benefits is expensed over the period in which the employees
render services. We fund these non-pension post-retirement benefits as they become due.
Termination benefits
We recognize a liability and an expense for termination benefits when we have demonstrably committed to terminate
employees. We are demonstrably committed to a termination when, and only when, there is a formal plan for the
termination with no realistic possibility of withdrawal. The plan should include, at a minimum, the location, function
and approximate number of employees whose services are to be terminated, the termination benefits for each job
classification or function and the time at which the plan will be implemented without significant changes.
Share-Based Payments
The fair value method of accounting is used for share-based payment transactions. Under this method, the cost of
share options and other equity-settled share-based payment arrangements is recorded based on the estimated fair
value at the grant date, including an estimate of the forfeiture rate, and charged to other operating income (expense)
over the vesting period. For employees eligible for normal retirement prior to vesting, the expense is charged to other
operating income (expense) over the period from the grant date to the date they are eligible for retirement.
Share-based payment expense relating to cash-settled awards, including deferred, restricted, performance and
performance deferred share units, is accrued over the vesting period of the units based on the quoted market value
of Class B subordinate voting shares. Performance share units (PSUs) and performance deferred share units (PDSUs)
have two additional vesting factors determined by our total shareholder return in comparison to a group of specified
companies and by the ratio of the change in our earnings before interest, taxes, depreciation and amortization
(EBITDA) over the vesting period of the share unit to the change in a specified weighted commodity price index. As
these awards will be settled in cash, the expense and liability are adjusted each reporting period for changes in the
underlying share price as well as changes to the above-noted vesting factors, as applicable.
Share Repurchases
Where we repurchase any of our equity share capital, the excess of the consideration paid over book value is deducted
from retained earnings.
Provisions
Decommissioning and restoration provisions
Future obligations to retire an asset and to restore a site, including dismantling, remediation and ongoing treatment
and monitoring of the site related to normal operations, are initially recognized and recorded as a provision based on
estimated future cash flows discounted at a credit-adjusted risk-free rate. These decommissioning and restoration
Consolidated Financial Statements
93
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
3. Summary of Significant Accounting Policies (continued)
provisions are adjusted at each reporting period for changes to factors including the expected amount of cash flows
required to discharge the liability, the timing of such cash flows and the discount rate.
The provisions are also accreted to full value over time through periodic charges to profit (loss). This unwinding of the
discount is charged to finance expense in the statement of income (loss).
The amount of the decommissioning and restoration provisions initially recognized is capitalized as part of the related
asset’s carrying value. The method of depreciation follows that of the underlying asset. For a closed site or where the
asset that generated a decommissioning and restoration provision no longer exists, there is no longer any future
benefit related to the costs, and as such, the amounts are expensed through other operating income (expense). For
operating sites, a revision in estimates or a new disturbance will result in an adjustment to the provision with an
offsetting adjustment to the capitalized asset retirement cost.
During the operating life of an asset, events such as infractions of environmental laws or regulations may occur. These
events are not related to the normal operation of the asset. The costs associated with these provisions are accrued
and charged to other operating income (expense) in the period in which the event giving rise to the liability occurs.
Changes in the estimated liability resulting in an adjustment to these provisions are also charged to other operating
income (expense) in the period in which the estimate changes.
Other provisions
Provisions are recognized when a present legal or constructive obligation exists as a result of past events and when it
is probable that an outflow of resources that can be reliably estimated will be required to settle the obligation. Where
the effect is material, the provision is discounted using an appropriate credit-adjusted risk-free rate.
Research and Innovation
Costs incurred during the research phase are expensed as part of research and innovation. Costs associated with the
development of our innovation-driven transformation program, where the process is not clearly defined and technical
feasibility is not established, are also expensed as incurred.
Earnings (Loss) per Share
Earnings (loss) per share is calculated based on the weighted average number of shares outstanding during the year.
For diluted earnings per share, dilution is calculated based upon the net number of common shares issued, should
“in-the-money” options and warrants be exercised and the proceeds be used to repurchase common shares at the
average market price in the year. In periods of loss, the loss per share and diluted loss per share are the same since the
effect of the issuance of additional common shares would be anti-dilutive.
4. Areas of Judgment and Estimation Uncertainty
In preparing our consolidated financial statements, we make judgments in applying our accounting policies. The
judgments that have the most significant effect on the amounts recognized in our financial statements are outlined
below. In addition, we make assumptions about the future in deriving estimates used in preparing our consolidated
financial statements. We have outlined information below about assumptions and other sources of estimation
uncertainty as at December 31, 2021 that have a risk of resulting in a material adjustment to the carrying amounts of
assets and liabilities within the next year.
a) Areas of Judgment
Assessment of Impairment and Impairment Reversal Indicators
Judgment is required in assessing whether certain factors would be considered an indicator of impairment or
impairment reversal. We consider both internal and external information to determine whether there is an indicator of
impairment or impairment reversal present and, accordingly, whether impairment testing is required. The information
94 Teck 2021 Annual Report | Purpose Driven
we consider in assessing whether there is an indicator of impairment or impairment reversal includes, but is not limited
to, market transactions for similar assets, commodity prices, treatment charges, interest rates, foreign exchange rates,
our market capitalization, reserves and resources, mine plans and operating results.
In the fourth quarter of 2021, as a result of higher market expectations for long-term copper prices, we performed an
impairment reversal test for our Carmen de Andacollo CGU under the requirements of IAS 36, Impairment of Assets
(Note 7(a)).
In addition, mine plans with updated information for Fort Hills became available in the fourth quarter of 2021, which
required us to perform an impairment test on our Fort Hills CGU (Note 7(a)).
In the fourth quarter of 2020, updated mine plans for Fort Hills became available, reflecting an earlier-than-planned
restart of the second train of operations, and including operating and capital cost reductions over the life of mine.
These updates to the mine plans indicated a change in the valuation of the asset. This, combined with macroeconomic
conditions, including the cost of capital for oil assets and lower market expectations for long-term Western Canadian
Select (WCS) heavy oil prices, required us to perform an impairment test for our Fort Hills CGU.
During the first quarter of 2020, as a result of then-lower market expectations of WCS heavy oil prices over the next
three years, combined with reduced production in the near term, we performed an impairment test for our interest in
Fort Hills (Note 7(a)).
Property, Plant and Equipment – Determination of Available for Use Date
Judgment is required in determining the date that property, plant and equipment is available for use. An asset is
available for use when it is in the location and condition necessary to operate in the manner intended by management.
We considered several factors in making the determination of when the Neptune port upgrade project was available
for use including, but not limited to, design capacity of the asset, throughput levels achieved, capital spending
remaining and commissioning status. As at September 30, 2021, based on assessment of relevant factors, the
Neptune port upgrade project was considered available for use. We commenced depreciation of the asset and ceased
capitalization of borrowing costs as of the date the asset was available for use.
Joint Arrangements
We are a party to a number of arrangements over which we do not have control. Judgment is required in determining
whether joint control over these arrangements exists and, if so, which parties have joint control and whether each
arrangement is a joint venture or a joint operation. In assessing whether we have joint control, we analyze the activities
of each arrangement and determine which activities most significantly affect the returns of the arrangement over its
life. These activities are determined to be the relevant activities of the arrangement. If unanimous consent is required
over the decisions about the relevant activities, the parties whose consent is required would have joint control over the
arrangement. The judgments around which activities are considered the relevant activities of the arrangement are subject
to analysis by each of the parties to the arrangement and may be interpreted differently. When performing this assessment,
we generally consider decisions about activities such as managing the asset while it is being designed, developed and
constructed, during its operating life and during the closure period. We may also consider other activities, including the
approval of budgets, expansion and disposition of assets, financing, significant operating and capital expenditures,
appointment of key management personnel, representation on the board of directors and other items. When circumstances
or contractual terms change, we reassess the control group and the relevant activities of the arrangement.
If we have joint control over the arrangement, an assessment of whether the arrangement is a joint venture or a joint
operation is required. This assessment is based on whether we have rights to the assets, and obligations for the liabilities,
relating to the arrangement or whether we have rights to the net assets of the arrangement. In making this determination,
we review the legal form of the arrangement, the terms of the contractual arrangement and other facts and
circumstances. In a situation where the legal form and the terms of the contractual arrangement do not give us rights
to the assets and obligations for the liabilities, an assessment of other facts and circumstances is required, including
whether the activities of the arrangement are primarily designed for the provision of output to the parties and whether
the parties are substantially the only source of cash flows contributing to the arrangement. The consideration of other
Consolidated Financial Statements
95
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
4. Areas of Judgment and Estimation Uncertainty (continued)
facts and circumstances may result in the conclusion that a joint arrangement is a joint operation. This conclusion
requires judgment and is specific to each arrangement. Other facts and circumstances have led us to conclude that
Antamina and Fort Hills are joint operations for the purposes of our consolidated financial statements. The other facts
and circumstances considered for both of these arrangements include the provision of output to the parties of the joint
arrangements and the funding obligations. For both Antamina and Fort Hills, we will take our share of the output from the
assets directly over the life of the arrangement. We have concluded that this gives us direct rights to the assets and
obligations for the liabilities of these arrangements proportionate to our ownership interests.
Streaming Transactions
When we enter into a long-term streaming arrangement linked to production at specific operations, judgment is
required in assessing the appropriate accounting treatment for the transaction on the closing date and in future
periods. We consider the specific terms of each arrangement to determine whether we have disposed of an interest in
the reserves and resources of the respective operation or executed some other form of arrangement. This assessment
considers what the counterparty is entitled to and the associated risks and rewards attributable to them over the life
of the operation. These include the contractual terms related to the total production over the life of the arrangement
as compared to the expected production over the life of the mine, the percentage being sold, the percentage of
payable metals produced, the commodity price referred to in the ongoing payment and any guarantee relating to the
upfront payment if production ceases.
For our silver and gold streaming arrangements at Antamina and Carmen de Andacollo, respectively, there is no
guarantee associated with the upfront payment. We have concluded that control of the rights to the silver and gold
mineral interests were transferred to the buyers when the contracts came into effect. Therefore, we consider these
arrangements a disposition of a mineral interest.
Based on our judgment, control of the interest in the reserves and resources transferred to the buyer when the
contracts were executed. At that time, we recognized the amount of the gain related to the disposition of the reserves
and resources, as we had the right to payment, the customer was entitled to the commodities, the buyer had no
recourse in requiring Teck to mine the product and the buyer had significant risks and rewards of ownership of the
reserves and resources.
We recognize the amount of consideration related to refining, mining and delivery services as the work is performed.
Deferred Tax Assets and Liabilities
Judgment is required in assessing whether deferred tax assets and certain deferred tax liabilities are recognized on the
balance sheet and what tax rate is expected to be applied in the year when the related temporary differences reverse.
We also evaluate the recoverability of deferred tax assets based on an assessment of our ability to use the underlying
future tax deductions before they expire against future taxable profits or capital gains. Deferred tax liabilities arising from
temporary differences on investments in subsidiaries, joint ventures and associates are recognized unless the reversal
of the temporary differences is not expected to occur in the foreseeable future and can be controlled. Judgment is also
required on the application of income tax legislation. These judgments are subject to risk and uncertainty and could
result in an adjustment to the deferred tax provision and a corresponding credit or charge to profit (loss).
b) Sources of Estimation Uncertainty
Impairment Testing
When impairment testing is required, discounted cash flow models are used to determine the recoverable amount
of respective assets. These models are prepared internally or with assistance from third-party advisors when
required. When relevant market transactions for comparable assets are available, these are considered in
determining the recoverable amount of assets. Significant assumptions used in preparing discounted cash flow
models include commodity prices, reserves and resources, mine production, operating costs, capital expenditures,
96 Teck 2021 Annual Report | Purpose Driven
discount rates and foreign exchange rates. Note 7(c) outlines the significant inputs used when performing goodwill
and other asset impairment testing. These inputs are based on management’s best estimates of what an
independent market participant would consider appropriate. Changes in these inputs may alter the results of
impairment testing, the amount of the impairment charges or reversals recorded in the statement of income (loss)
and the resulting carrying values of assets.
Estimated Recoverable Reserves and Resources
Mineral and oil reserve and resource estimates are based on various assumptions relating to operating matters as
set forth in National Instrument 43-101, Standards of Disclosure for Mineral Projects and National Instrument 51-101,
Standards of Disclosure for Oil and Gas Activities. Assumptions used include production costs, mining and processing
recoveries, cut-off grades, sales volumes, long-term commodity prices, exchange rates, inflation rates, tax and
royalty rates and capital costs. Cost estimates are based on prefeasibility or feasibility study estimates or operating
history. Estimates are prepared by or under the supervision of appropriately qualified persons, or qualified reserves
evaluators, but will be affected by forecasted commodity prices, inflation rates, exchange rates, capital and
production costs and recoveries, among other factors. Estimated recoverable reserves and resources are used in
performing impairment testing, to determine the depreciation of property, plant and equipment at operating mine
sites, in accounting for capitalized production stripping costs and also in forecasting the timing of settlement of
decommissioning and restoration costs. Changes in reserve and resource estimates are most significant to
estimating the recoverable amount in impairment tests.
Decommissioning and Restoration Provisions
Decommissioning and restoration provisions (DRPs) are based on future cost estimates using information available
at the balance sheet date that are developed by management’s experts (Note 23(a)). DRPs represent the present value
of estimated costs of future decommissioning and other site restoration activities, including costs associated with the
management of water and water quality in and around each closed site. DRPs are adjusted at each reporting period
for changes to factors such as the expected amount of cash flows required to discharge the liability, the timing of such
cash flows and the credit-adjusted discount rate. DRPs require significant estimates and assumptions, including the
requirements of the relevant legal and regulatory framework and the timing, extent and costs of required decommissioning
and restoration activities. Our estimates of the costs associated with the management of water and water quality in
and around each closed site include assumptions with respect to the volume and location of water to be treated, the
methods used to treat the water and the related water treatment costs. To the extent the actual costs differ from
these estimates, adjustments will be recorded and the statement of income (loss) may be affected.
Provision for Income Taxes
We calculate current and deferred tax provisions for each of the jurisdictions in which we operate. Actual amounts
of income tax expense are not final until tax returns are filed and accepted by the relevant authorities. This occurs
subsequent to the issuance of our financial statements and the final determination of actual amounts may not be
completed for a number of years. Therefore, profit (loss) in subsequent periods will be affected by the amount that
estimates differ from the final tax return.
Deferred Tax Assets and Liabilities
Assumptions about the generation of future taxable profits and repatriation of retained earnings depend on
management’s estimates of future production and sales volumes, commodity prices, reserves and resources,
operating costs, decommissioning and restoration costs, capital expenditures, dividends and other capital
management transactions. These estimates could result in an adjustment to the deferred tax provision and a
corresponding adjustment to profit (loss).
c) Effects of COVID-19
In March 2020, the World Health Organization declared a pandemic related to COVID-19 and the impacts on global
commerce have been far-reaching. We continue to act to protect the safety and health of our employees, contractors
Consolidated Financial Statements
97
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
4. Areas of Judgment and Estimation Uncertainty (continued)
and the communities in which we operate in accordance with guidance from governments and public health authorities.
These measures, combined with commodity market fluctuations, significantly affected our financial results for 2020.
There are ongoing challenges associated with COVID-19. Operating our mines at full production and continuing
construction on our QB2 project in a COVID-19 environment increases certain costs for medical testing, safety
equipment, safety supplies and additional transportation and accommodation for social distancing, among other things.
In 2021, we continued to maintain the safety of our workforce and the communities in which we operate while
mitigating the operational impacts on our business. Throughout 2021, we continued to incur costs to operate with
enhanced protocols in place. However, these expenditures are considered a cost of operating in this environment and
for the year ended December 31, 2021, we did not record any amounts specifically identified as COVID-19 costs in
other operating income (expense) (Note 8).
In 2020, we applied judgment in determining when to suspend the capitalization of borrowing costs associated with QB2,
which corresponded with the suspension of active development of the project. We similarly applied judgment to determine
when active development of the project resumed and we recommenced capitalization of borrowing costs at that date.
We suspended capitalization of borrowing costs for QB2 at the end of the first quarter of 2020, and we recommenced
capitalization of borrowing costs on the project in the third quarter of 2020 consistent with the return to active construction.
For the year ended December 31, 2020, we expensed costs of approximately $434 million relating primarily to the
suspension of construction and remobilization of our QB2 project, of which $282 million was recorded as COVID-19
costs in other operating income (expense) (Note 8) and $103 million relates to interest that would have been
capitalized if QB2 had not been suspended. Of the remaining $49 million, $41 million was recorded in cost of sales as a
result of reduced production levels at our operations and $8 million was recorded as social responsibility and
donations in other operating income (expense) (Note 8).
5. Revenue
a) Total Revenue by Major Product Type and Business Unit
The following table shows our revenues disaggregated by major product type and by business unit. Our business units
are reported based on the primary products that they produce and are consistent with our reportable segments (Note 28)
that have revenue from contracts with customers. A business unit can have revenue from more than one commodity, as it
can include an operation that produces more than one product. Intra-segment revenues are accounted for at current
market prices as if the sales were made to arm’s-length parties and are eliminated on consolidation.
(CAD$ in millions)
Copper
Zinc
Steelmaking coal
Blended bitumen
Silver
Lead
Other
Intra-segment
2021
Steelmaking
Coal
Zinc
Copper
$ 3,066
$
–
$
286
2,336
$
–
–
–
–
41
6
53
–
–
–
454
439
345
(511)
6,251
–
–
–
–
–
Energy
Total
–
–
–
715
–
–
–
–
$ 3,066
2,622
6,251
715
495
445
398
(511)
$ 3,452
$ 3,063
$ 6,251
$
715
$ 13,481
98 Teck 2021 Annual Report | Purpose Driven
(CAD$ in millions)
Copper
Zinc
Steelmaking coal
Blended bitumen
Silver
Lead
Other
Intra-segment
2020
Steelmaking
Coal
Zinc
Copper
$
2 , 1 19
$
–
$
189
2,062
–
–
35
5
71
–
–
–
432
356
314
(464)
$
–
–
3,375
–
–
–
–
–
Energy
Total
–
–
–
454
–
–
–
–
$ 2 , 1 1 9
2,251
3,375
454
467
361
385
(464)
$
2,419
$ 2,700
$ 3,375
$
454
$ 8,948
b) Total Revenue by Region
The following table shows our revenues disaggregated by geographical region. Revenues are attributed to regions
based on the destination port or delivery location as designated by the customer.
(CAD$ in millions)
Asia
China
Japan
South Korea
India
Other
Americas
United States
Canada
Latin America
Europe
Germany
Finland
Belgium
Spain
Other
2021
2020
$
$
4,643
1,437
1,354
556
894
1,679
1,279
116
731
182
136
123
351
1,861
1 , 2 1 1
982
588
757
1,189
1,027
166
610
124
106
163
164
$
13,481
$
8,948
Consolidated Financial Statements
99
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
6. Expenses by Nature
(CAD$ in millions)
Employment-related costs:
Wages and salaries
Employee benefits and other wage-related costs
Bonus payments
Post-employment benefits and pension costs
Transportation
Depreciation and amortization
Raw material purchases
Fuel and energy
Operating supplies consumed
Maintenance and repair supplies
Contractors and consultants
Overhead costs
Royalties
Other operating costs
Adjusted for:
Capitalized production stripping costs
Change in inventory
Total cost of sales, general and administration,
exploration and research and innovation expenses
7. Asset and Goodwill Impairment Testing
a) Impairment Reversal and Asset Impairment
2021
2020
$
$
1,040
272
266
154
1,732
1 ,519
1,583
1,077
842
658
735
811
414
373
4
971
272
128
124
1,495
1,378
1 ,510
715
697
620
648
648
268
266
62
9,748
8,307
(667)
(313)
(499)
81
$
8,768
$
7,889
The following pre-tax impairment reversal and (asset impairment) were recorded in profit (loss):
Impairment Reversal and (Asset Impairment)
(CAD$ in millions)
Carmen de Andacollo CGU
Fort Hills CGU
Total
2021
2020
215
–
215
$
–
(1,244)
$
(1,244)
$
$
100 Teck 2021 Annual Report | Purpose Driven
Impairment Reversal and (Asset Impairment) – 2021
During 2021, we assessed whether there were any indicators of impairment reversal or impairment for our assets and
did not identify any matters requiring us to perform an impairment or impairment reversal test, with the exception of
the Carmen de Andacollo CGU and the Fort Hills CGU, as outlined below.
Carmen de Andacollo CGU
In the fourth quarter of 2021, as a result of higher market expectations for long-term copper prices, we recorded a
pre-tax impairment reversal of $215 million (after-tax $150 million) related to our Carmen de Andacollo CGU. The
estimated post-tax recoverable amount was significantly higher than the carrying value. The impairment reversal
affects the profit (loss) of our copper operating segment (Note 28).
Fort Hills CGU
In the fourth quarter of 2021, as a result of updated mine plans for Fort Hills, we performed an impairment test on our
Fort Hills CGU as at December 31, 2021. Using a long-term WCS heavy oil price of US$48 per barrel, a long-term
Canadian to U.S. dollar foreign exchange rate of CAD$1.28 to US$1.00 and an 8% real, post-tax discount rate resulted
in a recoverable amount of $2.1 billion, which approximated our carrying value as at December 31, 2021. Cash flow
projections used in the analysis as at December 31, 2021 were based on a life of mine plan with cash flows covering a
period of 37 years.
Asset Impairment – 2020
Fort Hills CGU
In the fourth quarter of 2020, updated mine plans for Fort Hills became available, reflecting an earlier than planned
restart of the second train of operations and including operating and capital cost reductions over the life of mine.
These updates to the mine plans indicated a change in the valuation of the asset. This, combined with macroeconomic
conditions including the cost of capital for oil assets and lower market expectations for long-term WCS heavy oil
prices, required us to perform an impairment test for our Fort Hills CGU. As a result, we recorded a non-cash, pre-tax
asset impairment for our Fort Hills CGU of $597 million (after-tax $438 million) in the fourth quarter. The estimated
post-tax recoverable amount of our Fort Hills CGU of $2.1 billion was lower than our carrying value.
Cash flow projections used in the analysis as at December 31, 2020 were based on a life of mine plan with cash flows
covering a period of 45 years.
Combined with the pre-tax impairment of $647 million (after-tax $474 million) recorded in the first quarter of 2020, we
recorded total pre-tax impairments related to our Fort Hills CGU of $1.2 billion for the year ended December 31, 2020.
These impairments affected the profit (loss) of our energy operating segment (Note 28).
Sensitivity Analysis for Fort Hills CGU Impairment Test as at December 31, 2021
The key inputs used in our determination of recoverable amounts interrelate significantly with each other and with our
operating plans. For example, a decrease in long-term commodity prices could result in amendments to the mine
plans that would partially offset the effect of lower prices through lower operating and capital costs. It is difficult to
determine how all of these factors would interrelate, but in estimating the effect of changes in these assumptions on
fair values, we believe that all of these factors need to be considered together. A linear extrapolation of these effects
becomes less meaningful as the change in assumption increases.
Consolidated Financial Statements
101
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
7. Asset and Goodwill Impairment Testing (continued)
The valuation of our Fort Hills CGU is most sensitive to changes in WCS heavy oil prices, Canadian/U.S. dollar exchange
rates and discount rates. Based on the discounted cash flow model used to determine the recoverable amount as at
December 31, 2021, ignoring the above-described interrelationships, a US$1 change in the real long-term WCS heavy
oil price would result in a change in the recoverable amount of $100 million. A $0.01 change in the Canadian dollar
against the U.S. dollar would result in a change in the recoverable amount of approximately $30 million. A 25 basis point
change in the discount rate would result in a change in the recoverable amount of approximately $50 million.
b) Annual Goodwill Impairment Testing
The allocation of goodwill to CGUs or groups of CGUs reflects how goodwill is monitored for internal management
purposes. Our Quebrada Blanca CGU and steelmaking coal group of CGUs have goodwill allocated to them (Note 16).
We did not identify any goodwill impairment indicators during 2021. We performed our annual goodwill impairment
testing at October 31, 2021, calculating the recoverable amount on a FVLCD basis and did not identify any goodwill
impairment losses.
Cash flow projections are based on expected mine life. For our steelmaking coal operations, the cash flows cover
periods of 14 to 50 years, with a steady state thereafter until reserves and resources are exhausted. For Quebrada
Blanca, the cash flow covers the current 28 year expected mine life of the QB2 project and a projected expansion,
totaling 42 years, with an estimate of in situ value applied to the remaining resources.
Given the nature of expected future cash flows used to determine the recoverable amount, a material change could
occur over time as the cash flows are significantly affected by the key assumptions described below in Note 7(c).
Sensitivity Analysis for Annual Goodwill Impairment Testing
The recoverable amounts of our steelmaking coal group of CGUs and our Quebrada Blanca CGU both exceeded their
carrying amounts at the date of our annual goodwill impairment testing. There are no reasonably possible changes to any
of the below key assumptions, which would lead to either of the carrying amounts exceeding their recoverable amounts.
c) Key Assumptions
The following are the key assumptions used in our impairment testing calculations for the years ended December 31,
2021 and 2020:
WCS heavy oil prices per barrel
Steelmaking coal prices per tonne
Copper prices per pound
2021
2020
Long-term real price in 2026
of US$48
Long-term real price in 2025
of US$46
Long-term real price in 2026
of US$150
Long-term real price in 2025
of US$150
Long-term real price in 2026
of US$3.30
Long-term real price in 2025
of US$3.00
Post-tax real discount rates
6.0%—8.0%
6.0%—8.0%
Long-term foreign exchange rates
1 U.S. to 1.28 Canadian dollars
1 U.S. to 1.30 Canadian dollars
Commodity Prices
Commodity price assumptions use current prices in the initial year and trend to the long term prices in the table above.
Prices are based on a number of factors, including forward curves in the near term and are benchmarked with external
sources of information, including information published by our peers and market transactions, where possible, to ensure
they are within the range of values used by market participants.
102 Teck 2021 Annual Report | Purpose Driven
Discount Rates
Discount rates are based on market participant mining and oil sands weighted average costs of capital adjusted for
risks specific to the operation or asset where appropriate.
Foreign Exchange Rates
Foreign exchange rates are benchmarked with external sources of information based on a range used by market participants.
Reserves and Resources and Mine Production
Future mineral and oil production is included in projected cash flows based on plant capacities and mineral and oil reserve
and resource estimates and related exploration and evaluation work undertaken by appropriately qualified persons or
qualified reserves evaluators.
Operating Costs and Capital Expenditures
Operating costs and capital expenditures are based on life of mine plans and internal management forecasts. Cost
estimates incorporate management experience and expertise, current operating costs, the nature and location of
each operation and the risks associated with each operation. Future capital expenditures are based on management’s
best estimate of expected future capital requirements, with input from management’s experts where appropriate. All
committed and anticipated capital expenditures based on future cost estimates have been included in the projected
cash flows. Operating cost and capital expenditure assumptions are subject to ongoing optimization and review by
management.
Recoverable Amount Basis
In the absence of a relevant market transaction, we estimate the recoverable amount of our CGU or group of CGUs on
a FVLCD basis using a discounted cash flow methodology, taking into account assumptions likely to be made by market
participants unless it is expected that the value in use methodology would result in a higher recoverable amount. For
the asset impairment, impairment reversal and goodwill impairment analyses performed in 2021 and 2020, we have
applied the FVLCD basis. These estimates are classified as a Level 3 measurement within the fair value measurement
hierarchy (Note 30).
8. Other Operating Income (Expense)
(CAD$ in millions)
Settlement pricing adjustments (Note 29(b))
Share-based compensation
Environmental costs and remeasurement of decommissioning and restoration
provisions for closed operations
Care and maintenance costs
Social responsibility and donations
Gain (loss) on sale of assets
Commodity derivatives
Take or pay contract costs
COVID-19 costs (Note 4(c))
Other
$
2021
442
(125)
(108)
(65)
(27)
(14)
(22)
(97)
–
(62)
$
2020
47
(47)
(270)
(52)
(23)
34
62
(104)
(282)
(90)
(725)
$
(78)
$
Consolidated Financial Statements
103
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
9. Finance Income and Finance Expense
(CAD$ in millions)
Finance income
Investment income
Total finance income
Finance expense
Debt interest
Interest on advances from SMM/SC
Interest on lease liabilities (Note 19(c))
Letters of credit and standby fees
Net interest expense on retirement benefit plans
Accretion on decommissioning and restoration provisions (Note 23(a))
Other
Less capitalized borrowing costs (Note 15)
Total finance expense
10. Non-Operating Income (Expense)
2021
2020
$
$
$
$
$
$
5
5
298
37
35
44
5
151
15
585
(370)
$
215
$
10
10
275
42
37
48
5
114
8
529
(251)
278
(CAD$ in millions)
2021
2020
QB2 variable consideration to IMSA and ENAMI (a)
$
Foreign exchange gains (losses)
Loss on debt redemption or purchase (Note 18(b))
Other
$
(141)
39
–
(3)
$
(105)
$
56
(2)
(11)
–
43
a) QB2 variable consideration to IMSA and ENAMI
During the year ended December 31, 2021, we recorded $97 million (2020 – $nil) of expense (Note 29(b)) related to a
derivative financial liability that arose from our 2018 acquisition of an additional 13.5% interest in QBSA through the
purchase of Inversiones Mineras S.A. (IMSA), a private Chilean company. This derivative financial liability is carried at
fair value, with changes in fair value being recognized in profit (loss). The purchase price at the date of acquisition
included additional amounts that may become payable to the extent that average copper prices exceed US$3.15 per
pound in each of the first three years following commencement of commercial production, as defined in the
acquisition agreement, up to a cumulative maximum of US$100 million if commencement of commercial production
occurs prior to January 21, 2024 or up to a lesser maximum in certain circumstances thereafter. At the date of the
acquisition, a nominal value was attributed to the additional payments. As at December 31, 2021, the fair value of this
financial liability is $98 million (2020 – $nil) (Note 23), with estimated future average copper prices expected to exceed
the US$3.15 per pound threshold, based on the expected timing of commencement of commercial production.
The fair value of the liability to IMSA is calculated using a discounted cash flow method based on quoted market
prices and is considered a Level 2 fair value measurement with significant other observable inputs on the fair value
hierarchy (Note 30).
104 Teck 2021 Annual Report | Purpose Driven
During the year ended December 31, 2021, we recorded $44 million of expense (2020 – $56 million of income) related
to changes in the carrying value of the financial liability for the preferential dividend stream from QBSA to Empresa
Nacional de Minería (ENAMI). As at December 31, 2021, the carrying value of this financial liability, which is measured
at amortized cost, is $78 million (2020 – $30 million) (Note 23). This financial liability is most significantly affected by
copper prices and the interest rate on the subordinated loans provided by us and SMM/SC to QBSA, which affect the
timing of when QBSA repays the loans.
11. Supplemental Cash Flow Information
(CAD$ in millions)
Cash and cash equivalents
Cash
Investments with maturities from the date of acquisition of three months or less
December 31, December 31,
2020
2021
$
$
$
637
790
1,427
$
137
313
450
Cash and cash equivalents as at December 31, 2021 include $88 million (2020 – $82 million) held in QBSA and
$38 million (2020 – $26 million) held in Antamina. These cash and cash equivalent balances are to be used within the
respective entities for operating purposes and cannot be transferred to other entities within the group.
(CAD$ in millions)
Net change in non-cash working capital items
Trade and settlement receivables
Inventories
Prepaids and other current assets
Trade accounts payable and other liabilities
12. Inventories
(CAD$ in millions)
Supplies
Raw materials
Work in process
Finished products
Less long-term portion (Note 13)
2021
2020
$
$
(670)
(412)
(105)
313
$
(874)
$
(294)
100
(102)
55
(241)
December 31, December 31,
2020
2021
$
$
797
250
741
728
2 ,516
(126)
757
197
592
410
1,956
(84)
$
2,390
$
1,872
Cost of sales of $8.4 billion (2020 – $7.6 billion) includes $7.6 billion (2020 – $7.0 billion) of production costs that are
recognized as part of inventories and subsequently expensed when sold during the year.
Consolidated Financial Statements
105
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
12. Inventories (continued)
Total inventories held at net realizable value amounted to $45 million at December 31, 2021 (2020 – $75 million).
Total inventory write-downs in 2021 were $12 million (2020 – $151 million) and were included as part of cost of sales.
Long-term inventories consist of ore stockpiles and other in-process materials that are not expected to be processed
within one year.
13. Financial and Other Assets
(CAD$ in millions)
Long-term receivables and deposits
Marketable equity and debt securities carried at fair value
Pension plans in a net asset position (Note 22(a))
Derivative assets
Long-term portion of inventories (Note 12)
Finite life intangibles
Other
14. Investments in Associates and Joint Ventures
(CAD$ in millions)
At January 1, 2020
Contributions
Changes in foreign exchange rates
Share of income (loss)
Other
At December 31, 2020
Contributions
Changes in foreign exchange rates
Share of loss
Other
December 31, December 31,
2020
2021
$
$
322
178
449
63
126
395
38
289
178
301
77
84
309
31
$
1,571
$
1,269
NuevaUnión
Other
Total
$
1 ,07 1
$
11
(22)
1
—
$
1,061
$
5
(4)
(3)
—
8
1
—
(2)
(1)
6
—
(1)
—
(4)
$
1,079
12
(22)
(1)
(1)
$
1,067
5
(5)
(3)
(4)
At December 31, 2021
$
1,059
$
1
$
1,060
106 Teck 2021 Annual Report | Purpose Driven
15. Property, Plant and Equipment
(CAD$ in millions)
At December 31, 2019
Cost
Accumulated depreciation
Exploration
and
Evaluation
Land, Capitalized
Buildings, Production
Plant and
Properties Equipment
Mineral
Costs
Stripping Construction
In Progress
Total
$
885
–
$ 20,155
(5,973)
$ 16,951
(8,599)
$ 6,073
(3,429)
$
5,292
–
$ 49,356
(18,001)
Net book value
$
885
$ 14,182
$ 8,352
$ 2,644
$ 5,292
$ 31,355
$
Year ended December 31, 2020
Opening net book value
Additions
Disposals
Asset impairment
Depreciation and amortization
Transfers between classifications
Decommissioning and restoration
provisions change in estimate
Capitalized borrowing costs
Changes in foreign
exchange rates
885
22
(1)
–
–
–
–
–
(3)
$
$ 14,182
–
–
(261)
(288)
65
$ 8,352
368
(54)
(983)
(774)
652
$ 2,644
563
(5)
–
(546)
–
814
84
56
–
–
–
5,292
3,353
(7)
–
–
(717)
–
167
$ 31,355
4,306
(67)
(1,244)
(1,608)
–
870
251
(61)
(40)
(12)
(169)
(285)
Closing net book value
$
903
$ 14,535
$
7,577
$ 2,644
$
7,919
$ 33,578
At December 31, 2020
Cost
Accumulated depreciation
$
903
–
$ 20,758
(6,223)
$ 16,722
(9,145)
$ 6,598
(3,954)
$
7,919
–
$ 52,900
(19,322)
Net book value
$
903
$ 14,535
$
7,577
$ 2,644
$
7,919
$ 33,578
$
Year ended December 31, 2021
Opening net book value
Additions
Disposals
Impairment reversal
Depreciation and amortization
Transfers between classifications
Decommissioning and restoration
provisions change in estimate
Capitalized borrowing costs
Changes in foreign
exchange rates
903
45
–
–
–
–
–
–
(4)
$
14,535
–
–
215
(373)
(50)
$
7,577
181
(6)
–
(802)
2,162
$ 2,644
740
–
–
(694)
–
$
7,919
3,877
(18)
–
–
(2,112)
$ 33,578
4,843
(24)
215
(1,869)
–
250
115
(11)
39
–
(13)
–
–
(2)
–
255
10
289
370
(20)
Closing net book value
$
944
$ 14,681
$ 9,138
$ 2,688
$ 9,931
$ 37,382
At December 31, 2021
Cost
Accumulated depreciation
$
944
–
$ 21,362
(6,681)
$ 18,716
(9,578)
$
7,334
(4,646)
$
9,931
–
$ 58,287
(20,905)
Net book value
$
944
$ 14,681
$ 9,138
$ 2,688
$ 9,931
$ 37,382
Consolidated Financial Statements
107
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
15. Property, Plant and Equipment (continued)
a) Exploration and Evaluation
Significant exploration and evaluation projects in property, plant and equipment include the Galore Creek, San Nicolás
and Zafranal projects.
b) Borrowing Costs
Borrowing costs are capitalized at a rate based on our weighted average cost of borrowing or at the rate on the
project-specific debt, as applicable. Capitalized borrowing costs are classified with the asset they relate to within
mineral properties, land, buildings, plant and equipment, or construction in progress. Our weighted average borrowing
rate used for capitalization of borrowing costs in 2021 was 5.4% (2020 – 5.4%).
16. Goodwill
(CAD$ in millions)
January 1, 2020
Changes in foreign exchange rates
December 31, 2020
Changes in foreign exchange rates
December 31, 2021
Steelmaking
Coal Operations
Quebrada
Blanca
Total
$
$
$
702
$
399
$
1 , 101
–
(8)
(8)
702
$
391
$
1,093
–
(2)
(2)
702
$
389
$
1,091
The results of our annual goodwill impairment analysis and key assumptions used in the analysis are outlined in
Notes 7(b) and 7(c).
17. Trade Accounts Payable and Other Liabilities
December 31, December 31,
2020
2021
$
1,653
546
293
100
325
210
39
30
59
$
1,428
599
266
104
229
173
61
15
34
$
3,255
$
2,909
(CAD$ in millions)
Trade accounts payable and accruals
Capital project accruals
Payroll-related liabilities
Accrued interest
Commercial and government royalties
Current portion of provisions (Note 23(a))
Settlement payables (Note 29(b))
Contract liabilities - consignment sales
Other
108 Teck 2021 Annual Report | Purpose Driven
18. Debt
($ in millions)
4.75% notes due January 2022 (b)
$
3.75% notes due February 2023 (b)
3.9% notes due July 2030 (a)
6.125% notes due October 2035
6.0% notes due August 2040
6.25% notes due July 2041
5.2% notes due March 2042
5.4% notes due February 2043
December 31, 2021
December 31, 2020
Face
Value
(US$)
Carrying
Fair
Value
Value
(CAD$) (CAD$)
Face
Value
(US$)
Fair
Value
(CAD$)
Carrying
Value
(CAD$)
150
108
550
609
490
795
399
377
$
190
140
751
1,005
795
1,349
602
586
$
190
137
688
761
620
997
500
473
$
150
108
550
609
490
795
399
377
$
195
144
781
1,005
782
$
190
139
690
764
622
1,309
1,001
596
571
502
475
3,478
5,418
4,366
3,478
5,383
4,383
QB2 project financing facility (c)
2,252
2,929
Revolving credit facilities (d)
Antamina loan agreements (e)
Less current portion of debt
–
176
–
223
$ 5,906
$ 8,570
(168)
(213)
2,785
–
223
$ 7,374
(213)
1,147
1,459
1,423
262
90
334
115
334
115
$ 4,977
$ 7,291
$ 6,255
(90)
(115)
(115)
$ 5,738
$ 8,357
$ 7, 161
$ 4,887
$ 7,176
$ 6,140
The fair values of debt are determined using market values, if available, and discounted cash flows based on our cost
of borrowing where market values are not available. The latter are considered Level 2 fair value measurements with
significant other observable inputs on the fair value hierarchy (Note 30).
a) Notes Issued in 2020
In 2020, we issued US$550 million principal amount of senior unsecured notes due July 2030 (2030 Notes). The 2030
Notes have a coupon of 3.9% per annum and an effective interest rate, after taking into account issuance costs, of
4.08%. These notes were issued at 99.513% of face value.
Prior to April 15, 2030, the 2030 Notes can be redeemed, in whole or in part, at a redemption price equal to the greater
of (i) 100% of the principal amount and (ii) a make-whole amount plus, in each case, accrued and unpaid interest to the
redemption date. On or after April 15, 2030, the 2030 Notes are redeemable at a price equal to 100% of the principal
amount plus accrued and unpaid interest to the redemption date.
Net proceeds from this issuance, after underwriting and issuance costs, were US$542 million. The net proceeds and
available cash were used to finance the note tender offer described below in Note 18(b) and to reduce amounts
outstanding on our US$4.0 billion revolving credit facility.
In October 2020, we executed an exchange offer for the 2030 Notes that allowed the holders to exchange their
unregistered notes for publicly registered notes. There was no change in the aggregate principal amount of the 2030
Notes as a result of the exchange offer.
Consolidated Financial Statements
109
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
18. Debt (continued)
b) Notes Purchased or Redeemed
All of our outstanding notes are redeemable at any time by repaying the greater of the principal amount and the present
value of the sum of the remaining scheduled principal and interest amounts discounted at a comparable treasury yield
plus a stipulated spread, plus, in each case, accrued interest to, but not including, the date of redemption. In addition,
all of our outstanding notes, except for notes due October 2035, are callable at 100% (plus accrued interest to, but not
including, the date of redemption) within three to six months of maturity.
On January 18, 2022, we redeemed the 4.75% notes at maturity for US$150 million plus accrued interest.
In 2020, we purchased US$268 million aggregate principal amount of our outstanding notes pursuant to cash tender offers
and a private purchase, the latter of which had a US$13 million principal amount (2020 Tender Offer). The purchased notes
comprised US$104 million of 4.5% notes due 2021, US$52 million of 4.75% notes due 2022 and US$112 million of 3.75% notes
due 2023. The total cost of the purchases, including the premium for the purchase, was US$276 million. We recorded a
pre-tax expense of $11 million in non-operating income (expense) (Note 10) in connection with the 2020 Tender Offer.
In 2020, we redeemed all of the outstanding 4.5% notes due 2021 that were not purchased as a part of the 2020 Tender
Offer. The total cost of the redemption, including the premium, was US$13 million.
c) QB2 Project Financing Facility
As at December 31, 2021, US$2.3 billion was outstanding under the US$2.5 billion limited recourse QB2 project
financing facility. Amounts drawn under the facility bear interest at LIBOR plus applicable margins that vary over time
and will be repaid in 17 semi-annual instalments starting the earlier of six months after project completion or June
2023. The facility is guaranteed pre-completion on several basis by SMM/SC pro rata to the respective equity interests
in the Series A shares of QBSA. The facility is secured by pledges of Teck’s and SMM/SC’s interests in QBSA and by
security over QBSA’s assets, which consist primarily of QB2 project assets.
d) Revolving Credit Facilities
On October 15, 2021, we converted our US$4.0 billion revolving credit facility into a sustainability-linked facility and
extended its maturity to October 2026. The facility has pricing adjustments where the cost will increase, decrease or
remain unchanged based on our sustainability performance. Our sustainability performance over the term of the
facility is measured by non-financial variables that are specific to our greenhouse gas emissions intensity, the
percentage of women in our workforce and our high-potential safety incidents. In addition, on October 15, 2021, we
cancelled our US$1.0 billion facility that was scheduled to mature in June 2022.
Any amounts drawn under the US$4.0 billion facility can be repaid at any time and are due in full at its maturity date.
As at December 31, 2021, the facility was undrawn. Amounts outstanding under the facility bear interest at LIBOR plus
an applicable margin based on credit ratings and our sustainability performance, as described above. This facility
requires our total net debt-to-capitalization ratio, which was 0.22 to 1.0 at December 31, 2021, not exceed 0.60 to 1.0
(Note 31). This facility does not have an earnings or cash flow-based financial covenant, a credit rating trigger or a
general material adverse effect borrowing condition.
We maintain uncommitted bilateral credit facilities primarily for the issuance of letters of credit to support our future
reclamation obligations. As at December 31, 2021, we had $2.1 billion of letters of credit outstanding.
We also had $840 million in surety bonds outstanding at December 31, 2021 to support current and future reclamation
obligations.
e) Antamina Loan Agreements
On July 12, 2021, Antamina entered into a US$1.0 billion loan agreement. Once fully drawn, our 22.5% share of the
principal value of the loan will be US$225 million. As at December 31, 2021, our share of the amount drawn was US$158
million. Proceeds from the loan were used to repay existing credit facilities and to fund Antamina’s capital expenditure
program. Amounts outstanding under this facility bear interest at LIBOR plus an applicable margin. The loan is
non-recourse to us and the other Antamina owners and matures in 2026.
110 Teck 2021 Annual Report | Purpose Driven
On December 24, 2021, Antamina entered into a US$80 million short-term loan agreement, which was repaid in
January 2022. Our share of the amount drawn was US$18 million and the loan bore interest at 0.6%.
f) Scheduled Principal Payments
At December 31, 2021, scheduled principal payments during the next five years and thereafter are as follows:
($ in millions)
2022
2023
2024
2025
2026
Thereafter
g) Debt Continuity
($ in millions)
As at January 1
Cash flows
Proceeds from debt
Redemption, purchase or repayment of debt
Revolving credit facilities
Non-cash changes
Loss on debt redemption or purchase
Changes in foreign exchange rates
Finance fees and discount amortization
Other
As at December 31
$
US$
168
373
265
265
422
CAD$
Equivalent
$
213
472
336
336
536
4,413
5,594
$
5,906
$
7,487
US$
CAD$ Equivalent
2021
2020
2021
2020
$
4,913
$
3,204
$
6,255
$
4,162
1,305
(124)
(262)
–
–
(29)
13
1,802
(338)
262
8
–
(29)
4
1,639
(155)
(335)
–
(10)
(36)
16
2,426
(457)
363
11
(216)
(39)
5
$
5,816
$
4,913
$
7,374
$
6,255
Consolidated Financial Statements
111
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
19. Leases
a) Right-of-Use Assets
Our significant lease arrangements include contracts for leasing office premises, mining equipment, railcars, pipelines
and road and port facilities. As at December 31, 2021, $704 million (2020 – $730 million) of right-of-use assets are
recorded as part of land, buildings, plant and equipment within property, plant and equipment.
(CAD$ in millions)
Opening net book value
Additions
Depreciation
Changes in foreign exchange rates and other
Closing net book value
b) Significant Individual Lease Arrangements
$
$
2021
730
141
(163)
(4)
$
704
$
2020
762
312
(166)
(178)
730
Fort Hills entered into a service agreement in 2017 with TC Energy Corp. for the operation of the Northern Courier
Pipeline and associated tanks to transport bitumen between Fort Hills and Fort McMurray, Alberta, for a period of
25 years with an option to renew for four additional five-year periods. We have assumed the extensions will be
exercised in our determination of the lease liability. As at December 31, 2021, our share of the related lease liability
was $195 million (2020 – $199 million).
TAK leases road and port facilities from the Alaska Industrial Development and Export Authority, through which it ships
all concentrates produced at the Red Dog mine. The lease requires TAK to pay a minimum annual user fee of US$6 million
until 2040. As at December 31, 2021, the related lease liability was $87 million (2020 – $99 million).
c) Lease Liability Continuity
(CAD$ in millions)
As at January 1
Cash flows
Principal payments
Interest payments
Non-cash changes
Additions
Interest expense (Note 9)
Changes in foreign exchange and other
As at December 31
Less current portion
Long-term lease liabilities
112 Teck 2021 Annual Report | Purpose Driven
2021
$
692
$
2020
672
(139)
(35)
151
35
(10)
$
$
694
$
(127)
567
$
(163)
(37)
319
37
(136)
692
(119)
573
20. QB2 Advances from SMM/SC
In conjunction with the subscription arrangement with SMM/SC, QBSA entered into a subordinated loan facility
agreement with SMM/SC to advance QBSA up to US$1.3 billion. The advances are due to be repaid in full at maturity
on January 15, 2038. Amounts outstanding under the facility bear interest at LIBOR plus an applicable margin.
($ in millions)
December 31, 2021
December 31, 2020
Face
Value
(US$)
Carrying
Fair
Value
Value
(CAD$) (CAD$)
Face
Value
(US$)
Fair
Value
(CAD$)
Carrying
Value
(CAD$)
QB2 Advances from SMM/SC
$ 1,003
$ 1,288
$ 1,263
$
739
$
941
$
934
The fair value of the advances is determined using discounted cash flows based on our cost of borrowing. This is
considered a Level 2 fair value measurement with significant observable inputs on the fair value hierarchy (Note 30).
a) QB2 Advances from SMM/SC Carrying Value Continuity
($ in millions)
As at January 1
Cash flows
Advances
Non-cash changes
Finance fee amortization
Changes in foreign exchange rates
US$
CAD$ Equivalent
2021
2020
2021
$
734
$
702
$
934
$
262
1
–
31
1
–
326
1
2
2020
912
41
1
(20)
As at December 31
$
997
$
734
$
1,263
$
934
Consolidated Financial Statements
113
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
21. Income Taxes
a) Tax rate reconciliation to the Canadian statutory income tax rate
(CAD$ in millions)
2021
2020
Tax expense (recovery) at the Canadian statutory income tax rate of 26.54% (2020 – 26.58%)
$
1,203
$
(302)
Tax effect of:
Resource taxes
Resource and depletion allowances
Non-deductible expenses (non-taxable income)
Tax pools not recognized (recognition of previously unrecognized tax pools)
Withholding taxes on foreign earnings
Difference in tax rates in foreign jurisdictions
Revisions to prior year estimates
Non-controlling interests
Other
Total income taxes
Represented by:
Current income taxes
Deferred income taxes
Total income taxes
426
(61)
69
(56)
60
15
(14)
(15)
(10)
106
(68)
28
5
40
1
(4)
(2)
4
$
1 ,617
$
(192)
$
$
978
639
$
1 ,617
$
374
(566)
(192)
b) Continuity of deferred tax assets and liabilities
(CAD$ in millions)
January 1,
2021
Through
Profit
(Loss)
Through
OCI
December 31,
2021
Net operating loss and capital loss carryforwards
$
247
$
(106)
$
Property, plant and equipment
Decommissioning and restoration provisions
Other temporary differences
Deferred income tax assets
Net operating loss and capital loss carryforwards
Property, plant and equipment
Decommissioning and restoration provisions
$
$
Unrealized foreign exchange
Withholding taxes
Inventories
Other temporary differences
$
$
$
$
(168)
158
34
271
(1,038)
7,369
(962)
(88)
95
110
(103)
(12)
32
(19)
(105)
503
176
(86)
1
6
47
(113)
Deferred income tax liabilities
$
5,383
$
534
$
–
–
–
(5)
(5)
3
1
(2)
2
(1)
(1)
54
56
$
$
$
141
(180)
190
10
161
(532)
7,546
(1,050)
(85)
100
156
(162)
$
5,973
114 Teck 2021 Annual Report | Purpose Driven
(CAD$ in millions)
January 1,
2020
Through
Profit
(Loss)
Through
OCI
December 31,
2020
Net operating loss and capital loss carryforwards
$
Property, plant and equipment
Decommissioning and restoration provisions
Other temporary differences
Deferred income tax assets
Net operating loss and capital loss carryforwards
Property, plant and equipment
Decommissioning and restoration provisions
$
$
Unrealized foreign exchange
Withholding taxes
Inventories
Other temporary differences
$
$
$
$
$
$
190
(144)
123
42
211
(642)
7, 101
(637)
(116)
91
91
14
57
(22)
35
(13)
57
(408)
294
(327)
11
6
19
(104)
–
(2)
–
5
3
12
(26)
2
17
(2)
–
(13)
$
$
$
247
(168)
158
34
271
(1,038)
7,369
(962)
(88)
95
110
(103)
Deferred income tax liabilities
$
5,902
$
(509)
$
(10)
$
5,383
c) Deferred Tax Assets and Liabilities Not Recognized
We have not recognized $293 million (2020 – $296 million) of deferred tax assets associated with unused tax credits
and tax pools in entities and jurisdictions that do not have established sources of taxable income. The majority of
these unused tax credits and tax pools do not expire.
Deferred tax liabilities of approximately $803 million (2020 – $731 million) have not been recognized on the unremitted
foreign earnings associated with investments in subsidiaries and interests in joint arrangements where we control the
timing of the reversal of the temporary differences and it is probable that such differences will not reverse in the
foreseeable future.
d) Loss Carryforwards
At December 31, 2021, we had $1.16 billion (2020 – $3.81 billion) of Canadian net operating loss carryforwards, which
expire at various dates between 2029 and 2041, and $972 million (2020 – $847 million) of Chilean net operating losses
with an indefinite carryforward period. The deferred tax benefit of these pools has been recognized.
e) Scope of Antamina’s Peruvian Tax Stability Agreement
In prior years, the Peruvian tax authority, La Superintendencia Nacional de Aduanas y de Administración Tributaria
(SUNAT) issued income tax assessments for the 2013 and 2014 taxation years to Antamina (our joint operation in which
we own a 22.5% share), denying accelerated depreciation claimed by Antamina in respect of a mill expansion and
other assets, on the basis that the expansion was not covered by Antamina’s tax stability agreement. Antamina
objected to the assessments, but lost its appeal with SUNAT. In 2021, SUNAT issued their assessment on this matter
for the 2015 taxation year on the same basis as for the previous two taxation years. The issue also affects the 2016 and
2017 taxation years and we expect that it will be raised by SUNAT in respect of those years as well.
Antamina is pursuing the issue in the Peruvian courts. However, based on opinions of counsel, we have provided for the tax on
this issue for all years possibly affected. The denial of accelerated depreciation claimed is a timing issue in our tax provision.
The income tax assessments also assessed interest and penalties and we have not provided for our share of these
amounts for any years as at December 31, 2021. Based on opinions of counsel, we expect interest and penalties in
relation to this matter will, more likely than not, be reversed for all taxation years in question.
Consolidated Financial Statements
115
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
22. Retirement Benefit Plans
We have defined contribution pension plans for certain groups of employees. Our share of contributions to these plans
is expensed in the year earned by employees.
We have multiple defined benefit pension plans registered in various jurisdictions that provide benefits based
principally on employees’ years of service and average annual remuneration. These plans are only available to certain
qualifying employees and some are now closed to additional members. The plans are “flat-benefit” or “final-pay” plans
and may provide for inflationary increases in accordance with certain plan provisions. All of our registered defined
benefit pension plans are governed and administered in accordance with applicable pension legislation in either
Canada or the United States. Actuarial valuations are performed at least every three years to determine minimum
annual contribution requirements as prescribed by applicable legislation. For the majority of our plans, current service
costs are funded based on a percentage of pensionable earnings or as a flat dollar amount per active member
depending on the provisions of the pension plans. Actuarial deficits are funded in accordance with minimum funding
regulations in each applicable jurisdiction. All of our defined benefit pension plans were actuarially valued within the
past three years. While the majority of benefit payments are made from registered held-in-trust funds, there are also
several unregistered and unfunded plans where benefit payment obligations are met as they fall due.
We also have several post-retirement benefit plans that provide post-retirement medical, dental and life insurance
benefits to certain qualifying employees and surviving spouses. These plans are unfunded and we meet benefit
obligations as they come due.
116 Teck 2021 Annual Report | Purpose Driven
a) Actuarial Valuation of Plans
(CAD$ in millions)
2021
2020
Defined Non-Pension
Post-
Benefit
Retirement
Pension
Plans Benefit Plans
Defined Non-Pension
Post-
Benefit
Retirement
Pension
Plans Benefit Plans
Defined benefit obligation
Balance at beginning of year
Current service cost
Past service costs arising from plan improvements
Benefits paid
Interest expense
Obligation experience adjustments
Effect from change in financial assumptions
Effect from change in demographic assumptions
Changes in foreign exchange rates
Balance at end of year
Fair value of plan assets
Fair value at beginning of year
Interest income
Return on plan assets, excluding amounts
included in interest income
Benefits paid
Contributions by the employer
Changes in foreign exchange rates
Fair value at end of year
Funding surplus (deficit)
Less effect of the asset ceiling
Balance at beginning of year
Interest on asset ceiling
Change in asset ceiling
Balance at end of year
$
2,558
$
72
13
(144)
59
4
(159)
4
–
2,407
2,812
66
102
(144)
22
–
2,858
451
72
2
25
99
445
14
3
(14)
11
(13)
(24)
3
(5)
420
–
–
–
(14)
14
–
–
(420)
–
–
–
–
$
2,337
$
404
55
–
(146)
69
27
221
1
(6)
19
–
(17)
13
(3)
33
(3)
(1)
2,558
445
2,659
79
204
(146)
21
(5)
2,812
254
63
2
7
72
–
–
–
(17)
17
–
–
(445)
–
–
–
–
Net accrued retirement benefit asset (liability)
Represented by:
Pension assets (Note 13)
Accrued retirement benefit liability
Net accrued retirement benefit asset (liability)
$
$
$
352
$
(420)
$
182
$
(445)
449
$
(97)
$
–
(420)
$
301
(119)
352
$
(420)
$
182
$
–
(445)
(445)
A number of the plans have a surplus totaling $99 million at December 31, 2021 (2020 – $72 million), which is not
recognized on the basis that future economic benefits are not available to us in the form of a reduction in future
contributions or a cash refund.
Consolidated Financial Statements
117
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
22. Retirement Benefit Plans (continued)
We expect to contribute $20 million to our defined benefit pension plans in 2022 based on minimum funding
requirements. The weighted average duration of the defined benefit pension obligation is 15 years and the weighted
average duration of the non-pension post-retirement benefit obligation is 15 years.
Defined contribution expense for 2021 was $52 million (2020 – $50 million).
b) Significant Assumptions
The discount rate used to determine the defined benefit obligations and the net interest cost was determined by
reference to the market yields on high-quality debt instruments at the measurement date with durations similar to
the duration of the expected cash flows of the plans.
Weighted average assumptions used to calculate the defined benefit obligation at the end of each year are as follows:
Discount rate
Rate of increase in future compensation
Medical trend rate
2021
2020
Defined Non-Pension
Benefit
Post-
Retirement
Pension
Plans Benefit Plans
Defined Non-Pension
Benefit
Post-
Retirement
Pension
Benefit Plans
Plans
2.88%
3.25%
–
2.96%
3.25%
5.00%
2.39%
3.25%
–
2.50%
3.25%
5.00%
c) Sensitivity of the Defined Benefit Obligation to Changes in the Weighted Average Assumptions
Discount rate
Rate of increase in future compensation
Medical cost claim trend rate
2021
Effect on Defined Benefit Obligation
Change in
Assumption
Increase in
Assumption
Decrease in
Assumption
1.0%
1.0%
1.0%
Decrease by 13%
Increase by 15%
Increase by 1%
Decrease by 1%
Increase by 1%
Decrease by 1%
2020
Effect on Defined Benefit Obligation
Change in
Assumption
Increase in
Assumption
Decrease in
Assumption
Discount rate
Rate of increase in future compensation
Medical cost claim trend rate
1.0%
1.0%
1.0%
Decrease by 12%
Increase by 14%
Increase by 1%
Decrease by 1%
Increase by 1%
Decrease by 1%
The above sensitivity analyses are based on a change in each actuarial assumption while holding all other assumptions
constant. The sensitivity analyses on our defined benefit obligation are calculated using the same methods as those
used for calculating the defined benefit obligation recognized on our balance sheet. The methods and types of
assumptions used in preparing the sensitivity analyses did not change from the prior period.
118 Teck 2021 Annual Report | Purpose Driven
d) Mortality Assumptions
Assumptions regarding future mortality are set based on management’s best estimate in accordance with published
mortality tables and expected experience. These assumptions translate into the following average life expectancies
for an employee retiring at age 65:
2021
2020
Male
Female
Male
Female
Retiring at the end of the reporting period
Retiring 20 years after the end of the reporting period
85.3 years
86.4 years
87.7 years
88.7 years
85.3 years
87.7 years
86.4 years
88.7 years
e) Significant Risks
The defined benefit pension plans and post-retirement benefit plans expose us to a number of risks, the most significant
of which include asset volatility risk, changes in bond yields and any changes in life expectancy.
Asset volatility risk
The discount rate used to determine the defined benefit obligations is based on AA-rated corporate bond yields.
If our plan assets underperform this yield, the deficit will increase. Our strategic asset allocation includes a significant
proportion of equities that increases volatility in the value of our assets, particularly in the short term. We expect
equities to outperform corporate bonds in the long term.
Changes in bond yields
A decrease in bond yields increases plan liabilities, which are partially offset by an increase in the value of the plans’
bond holdings.
Life expectancy
The majority of the plans’ obligations are to provide benefits for the life of the member. Increases in life expectancy
will result in an increase in the plans’ liabilities.
f)
Investment of Plan Assets
The assets of our defined benefit pension plans are managed by external asset managers under the oversight of the
Teck Resources Limited Executive Pension Committee.
Our pension plan investment strategies support the objectives of each defined benefit plan and are related to each
plan’s demographics and timing of expected benefit payments to plan members. The objective for the plan asset
portfolios is to achieve annualized portfolio returns over five-year periods in excess of the annualized percentage
change in the Consumer Price Index plus a certain premium.
Strategic asset allocation policies have been developed for each defined benefit plan to achieve this objective. The
policies also reflect an asset/liability matching framework that seeks to reduce the effect of interest rate changes on
each plan’s funded status by matching the duration of the bond investments with the duration of the pension liabilities.
We do not use derivatives to manage interest rate risk. Asset allocation is monitored at least quarterly and rebalanced if
the allocation to any asset class exceeds its allowable allocation range. Portfolio and investment manager performance
is monitored quarterly and the investment guidelines for each plan are reviewed at least annually.
Consolidated Financial Statements
119
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
22. Retirement Benefit Plans (continued)
The defined benefit pension plan assets at December 31, 2021 and 2020 are as follows:
(CAD$ in millions)
2021
2020
Quoted
Unquoted
Total %
Quoted
Unquoted
Total %
Equity securities
Debt securities
Real estate and other
$
$
$
1,069
1,389
71
$
$
$
–
–
329
37%
49%
14%
$
$
$
1,058
1,385
62
$
$
$
–
–
307
38%
49%
13%
23. Provisions and Other Liabilities
(CAD$ in millions)
December 31, December 31,
2020
2021
Decommissioning and restoration provisions and other provisions (a)
$
Obligation to Neptune Bulk Terminals (b)
Derivative liabilities (net of current portion of $9 (2020 – $6))
ENAMI preferential dividend liability (Note 10(a))
QB2 variable consideration to IMSA (Note 10(a))
Other IMSA payable
Other liabilities
3,813
170
51
78
98
61
83
$
3,484
111
26
30
—
60
20
$
4,354
$
3,731
a) Decommissioning and Restoration Provisions and Other Provisions
The following table summarizes the movements in provisions for the year ended December 31, 2021:
(CAD$ in millions)
As at January 1, 2021
Settled during the year
Change in discount rate
Change in amount and timing of cash flows
Accretion (Note 9)
Other
Changes in foreign exchange rates
As at December 31, 2021
Less current portion of provisions (Note 17)
Decommissioning and
Restoration Provisions
Other
Provisions
$
3,342
$
(90)
322
2
151
(4)
2
3,725
(144)
315
(38)
–
75
4
(56)
(2)
298
(66)
Total
$
3,657
(128)
322
77
155
(60)
–
4,023
(210)
Long-term provisions
$
3,581
$
232
$
3,813
During the year ended December 31, 2021, we recorded $73 million (2020 – $101 million) of additional study and
environmental costs arising from legal obligations through other provisions.
120 Teck 2021 Annual Report | Purpose Driven
Decommissioning and Restoration Provisions
The decommissioning and restoration provisions represent the present value of estimated costs for required
future decommissioning and other site restoration activities. These activities include removal of site structures and
infrastructure, recontouring and revegetation of previously mined areas and the management of water and water
quality in and around each closed site. The majority of the decommissioning and site restoration expenditures occur
near the end of, or after, the life of the related operation.
After the end of the life of certain operations, water quality management costs may extend for periods in excess of
100 years. Our provision for these expenditures was $1.3 billion as at December 31, 2021 (2020 – $1.2 billion), of which
$769 million (2020 – $673 million) relates to our steelmaking coal business unit.
For our steelmaking coal operations, the current and future requirements for water quality management are
established under a regional permit issued by the provincial government of British Columbia. This permit references
the Elk Valley Water Quality Plan (EVWQP). In October 2020, Environment and Climate Change Canada issued a
Direction under the Fisheries Act (the Direction) requiring us to undertake certain additional measures to address water
quality and fish habitat impacts in the upper Fording River and certain tributaries, and stipulating deadlines for
implementation of certain measures contemplated by the EVWQP. The Direction does not require construction of any
additional water treatment facilities beyond those already contemplated by the EVWQP, but sets out requirements
with respect to water management such as diversions, mine planning, fish monitoring and calcite prevention measures,
as well as the installation by December 31, 2030, of a 200-hectare geosynthetic cover trial in the Greenhills creek
drainage. Certain of the measures in the Direction, including the cover trial, will require incremental spending beyond
that already associated with the EVWQP. The estimated costs of the Direction have been included in our
decommissioning and restoration provisions as at December 31, 2021 and 2020.
In 2021, the decommissioning and restoration provisions were calculated using nominal discount rates between 3.86% and
5.35% (2020 – 4.05% and 5.85%). We also used an inflation rate of 2.00% (2020 – 2.00%) in our cash flow estimates. Total
decommissioning and restoration provisions include $721 million (2020 – $712 million) in respect of closed operations.
b) Obligation to Neptune Bulk Terminals
Through our cost of services agreement with Neptune Bulk Terminals Inc. (Neptune), we owe amounts to Neptune for
any loans entered into by Neptune that are specifically related to funding the assets of our steelmaking coal loading
and handling operations. The carrying value of this obligation approximates fair value based on prevailing market
interest rates in effect at December 31, 2021. This is considered a Level 2 fair value measurement with significant other
observable inputs on the fair value hierarchy (Note 30). The current portion of this obligation is recorded as part of
trade accounts payable and other liabilities.
24. Equity
a) Authorized Share Capital
Our authorized share capital consists of an unlimited number of Class A common shares without par value, an unlimited
number of Class B subordinate voting shares without par value and an unlimited number of preferred shares without par
value issuable in series.
Class A common shares carry the right to 100 votes per share. Class B subordinate voting shares carry the right to one
vote per share. Each Class A common share is convertible, at the option of the holder, into one Class B subordinate voting
share. In all other respects, the Class A common shares and Class B subordinate voting shares rank equally.
The attributes of the Class B subordinate voting shares contain so-called “coattail provisions,” which provide that, in
the event that an offer (an “Exclusionary Offer”) to purchase Class A common shares, which is required to be made to
all or substantially all holders thereof, is not made concurrently with an offer to purchase Class B subordinate voting
shares on identical terms, then each Class B subordinate voting share will be convertible into one Class A common
share at the option of the holder during a certain period, provided that any Class A common shares received upon
such conversion are deposited to the Exclusionary Offer. Any Class B subordinate voting shares converted into Class A
Consolidated Financial Statements
121
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
24. Equity (continued)
common shares pursuant to such conversion right will automatically convert back to Class B subordinate voting shares
in the event that any such shares are withdrawn from the Exclusionary Offer or are not otherwise ultimately taken up
and paid for under the Exclusionary Offer.
The Class B subordinate voting shares will not be convertible in the event that holders of a majority of the Class A
common shares (excluding those shares held by the offeror making the Exclusionary Offer) certify to Teck that they
will not, among other things, tender their Class A common shares to the Exclusionary Offer.
If an offer to purchase Class A common shares does not, under applicable securities legislation or the requirements of
any stock exchange having jurisdiction, constitute a “take-over bid” or is otherwise exempt from any requirement that
such offer be made to all or substantially all holders of Class A common shares, the coattail provisions will not apply.
b) Class A Common Shares and Class B Subordinate Voting Shares Issued and Outstanding
Shares (in 000’s)
As at January 1, 2020
Shares issued on options exercised (c)
Acquired and cancelled pursuant to normal course issuer bid (h)
As at December 31, 2020
Shares issued on options exercised (c)
As at December 31, 2021
c) Share Options
Class A
Common
Class B
Subordinate
Shares Voting Shares
7,765
539,528
–
–
145
(16,292)
7,765
523,381
–
3,067
7,765
526,448
The maximum number of Class B subordinate voting shares issuable to full-time employees pursuant to options
granted under our current stock option plan is 46 million. As at December 31, 2021, 12,187,148 share options remain
available for grant. The exercise price for each option is the closing price for our Class B subordinate voting shares on
the last trading day before the date of grant. Our share options are settled through the issuance of Class B subordinate
voting shares.
During the year ended December 31, 2021, we granted 2,519,455 share options to employees. These share options
have a weighted average exercise price of $29.04, vest in equal amounts over three years and have a term of 10 years.
The weighted average fair value of share options granted in the year was estimated at $10.83 per option (2020 – $4.76)
at the grant date based on the Black-Scholes option-pricing model using the following assumptions:
Weighted average exercise price
Dividend yield
Risk-free interest rate
Expected option life
Expected volatility
Forfeiture rate
2021
$
29.04
0.69%
0.75%
6.3 years
40%
0.78%
$
2020
14.42
2.13%
1.19%
6.1 years
41%
1.16%
The expected volatility is based on a statistical analysis of historical daily share prices over a period equal to the
expected option life.
122 Teck 2021 Annual Report | Purpose Driven
Outstanding share options are as follows:
2021
2020
Share
Options
(in 000’s)
Weighted
Average
Exercise
Price
Outstanding at beginning of year
25,250
$
Granted
Exercised
Forfeited
Expired
Outstanding at end of year
Vested and exercisable at end of year
2,519
(3,189)
(186)
(714)
23,680
16,543
$
$
20.61
29.04
16.03
25.43
52.86
21 .12
21.29
The average share price during the year was $29.25 (2020 – $16.15).
Information relating to share options outstanding at December 31, 2021, is as follows:
Share
Options
(in 000’s)
20,152
$
6,314
(156)
(293)
(767)
25,250
17,368
$
$
Weighted
Average
Exercise
Price
23.02
14.42
8.33
20.97
35.14
20.61
21.76
Outstanding Share Options (in 000’s)
Exercise
Price Range
Weighted Average Remaining Life
of Outstanding Options (months)
4,096
4,876
5,406
5,700
3,602
23,680
$ 5.34 — $ 13.57
$ 13.58 — $ 14 .7 1
$ 14.72 — $ 26.53
$ 26.54 — $ 29.43
$ 29.44 — $ 39.90
$ 5.34 — $ 39.90
49
98
43
88
36
65
Total share option compensation expense recognized for the year was $28 million (2020 – $23 million).
d) Deferred Share Units, Restricted Share Units, Performance Share Units and Performance Deferred Share Units
We have issued and outstanding deferred share units (DSUs), restricted share units (RSUs), performance share units
(PSUs) and performance deferred share units (PDSUs) (collectively, Units).
As of 2017, DSUs are granted to directors only. RSUs may be granted to both employees and directors. PSUs and
PDSUs are granted to certain officers only. DSUs entitle the holder to a cash payment equal to the closing price of one
Class B subordinate voting share on the Toronto Stock Exchange on the day prior to redemption. RSUs entitle the
holder to a cash payment equal to the weighted average trading price of one Class B subordinate voting share on the
Toronto Stock Exchange over 20 consecutive trading days prior to the payout date. PSUs and PDSUs issued in 2017
and later vest in a percentage from 0% to 200% based on both relative total shareholder return as compared to our
compensation peer group and a calculation based on the change in EBITDA over the vesting period divided by the
change in a weighted commodity price index. Once vested, PSUs and PDSUs entitle the holder to a cash payment
equal to the weighted average trading price of one Class B subordinate voting share on the Toronto Stock Exchange
over 20 consecutive trading days prior to the payout date. Officers granted PSUs in 2017 and later can elect to receive
up to 50% of their Units as PDSUs, which pay out following termination of employment as described below.
PSUs and PDSUs vest on December 20 in the year prior to the third anniversary of the grant date. RSUs vest on various
dates depending on the grant date. DSUs granted to directors vest immediately. Units vest on a pro rata basis if employees
retire or are terminated without cause and unvested units are forfeited if employees resign or are terminated with cause.
Consolidated Financial Statements
123
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
24. Equity (continued)
DSUs and PDSUs may be redeemed on or before December 15 of the first calendar year commencing after the date on
which the participant ceases to be a director or employee. RSUs and PSUs pay out on the vesting date.
Additional Units are issued to Unit holders to reflect dividends paid and other adjustments to Class B subordinate voting shares.
In 2021, we recognized compensation expense of $97 million for Units (2020 – $24 million expense). The total liability and
intrinsic value for vested Units as at December 31, 2021 was $160 million (2020 – $83 million).
The outstanding Units are summarized in the following table:
(in 000’s)
DSUs
RSUs
PSUs
PDSUs
2021
2020
Outstanding
Vested Outstanding
2,526
2,707
1,622
185
7,040
2,526
–
–
67
2,593
2,555
1,408
1,449
213
5,625
Vested
2,555
–
–
70
2,625
e) Accumulated Other Comprehensive Income
(CAD$ in millions)
Accumulated other comprehensive income – beginning of year
Currency translation differences:
Unrealized losses on translation of foreign subsidiaries
Foreign exchange differences on debt designated as a hedge of our
investment in foreign subsidiaries (net of taxes of $(2) and $(17)) (Note 29(b))
Gain (loss) on marketable equity and debt securities (net of taxes of $1 and $(3))
Remeasurements of retirement benefit plans (net of taxes of $(91) and $29)
Total other comprehensive income (loss)
Less remeasurements of retirement benefit plans recorded in retained earnings
2021
$
247
$
2020
309
(50)
11
(39)
(6)
171
126
(171)
(197)
111
(86)
24
(50)
(112)
50
247
Accumulated other comprehensive income – end of year
$
202
$
f) Earnings (Loss) Per Share
The following table reconciles our basic and diluted earnings (loss) per share:
(CAD$ in millions, except per share data)
2021
2020
Net basic and diluted profit (loss) attributable to shareholders of the company
$
2,868
$
(864)
Weighted average shares outstanding (000’s)
Dilutive effect of share options
Weighted average diluted shares outstanding (000’s)
Basic earnings (loss) per share
Diluted earnings (loss) per share
532,340
7,931
534,378
–
540, 271
534,378
$
$
5.39
5.31
$
$
(1.62)
(1.62)
124 Teck 2021 Annual Report | Purpose Driven
At December 31, 2021, 7,700,774 potentially dilutive shares were not included in the diluted earnings per share calculation
because their effect was anti-dilutive. For the year ended December 31, 2020, there was a net loss attributable to
shareholders of the company and, accordingly, all share options were considered anti-dilutive and were excluded from
the calculation of diluted earnings (loss) per share. At December 31, 2020, the weighted average shares outstanding
and weighted average diluted shares outstanding were therefore the same.
g) Dividends
We declared and paid dividends on our Class A common and Class B subordinate voting shares of $0.05 per share in
each quarter of 2021 and 2020. During the year ended December 31, 2021, we declared and paid a total of $106 million
(2020 – $106 million).
On February 23, 2022, we declared a dividend on our Class A common and Class B subordinate voting shares of
$0.625 per share to be paid on March 31, 2022 to shareholders of record at the close of business on March 15, 2022.
h) Normal Course Issuer Bid
On occasion, we purchase and cancel Class B subordinate voting shares pursuant to normal course issuer bids that
allow us to purchase up to a specified maximum number of shares over a one-year period.
In October 2021, we renewed our regulatory approval to conduct a normal course issuer bid, under which we may purchase
up to 40 million Class B subordinate voting shares during the period from November 2, 2021 to November 1, 2022.
All repurchased shares will be cancelled. There were no purchases and no cancellations of Class B subordinate voting
shares in 2021. In 2020, we purchased and cancelled 16,292,441 Class B subordinate voting shares under our normal
course issuer bid for $207 million.
25. Non-Controlling Interests
Set out below is information about our subsidiaries with non-controlling interests and the non-controlling interest
balances included in equity.
Percentage of
Ownership
Interest and
Voting Rights
Held by Non-
Principal Place
of Business
Controlling December 31, December 31,
Interest
2021
2020
(CAD$ in millions)
Carmen de Andacollo
Quebrada Blanca (a)
Region IV, Chile
Region I, Chile
Elkview Mine Limited Partnership
British Columbia, Canada
Compañía Minera Zafranal S.A.C.
Arequipa Region, Peru
$
10%
40%
5%
20%
$
24
612
86
46
$
768
$
26
526
74
43
669
Consolidated Financial Statements
125
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
25. Non-Controlling Interests (continued)
a) Quebrada Blanca
The non-controlling interest in QBSA, the entity that owns QB2, consists of SMM/SC, who subscribed for a 30% indirect
interest in QBSA in 2019, and ENAMI, a Chilean state-owned agency that holds a 10% preference share interest. ENAMI’s
interest in QBSA does not require ENAMI to make contributions toward QBSA’s capital spending.
The following is the summarized financial information for Quebrada Blanca before intra-group eliminations. Quebrada
Blanca has non-controlling interests that are considered material to our consolidated financial statements.
(CAD$ in millions)
Summarized balance sheet
Current assets
Current liabilities
Current net assets
Non-current assets
Non-current liabilities
Non-current net assets
Net assets
Accumulated non-controlling interests
Summarized statement of comprehensive income (loss)
Revenue
Loss for the period
Other comprehensive income (loss)
Total comprehensive income (loss)
Loss allocated to non-controlling interests
Summarized cash flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Effect of exchange rates on cash and cash equivalents
December 31, December 31,
2020
2021
$
$
$
$
$
$
$
$
166
731
(565)
11,699
7,328
4,371
3,806
612
136
(182)
(10)
(192)
(20)
(516)
(2,597)
3 , 1 17
2
$
$
$
$
$
$
221
698
(477)
8,575
4,841
3,734
3,257
526
116
(291)
(47)
(338)
(95)
(442)
(1,657)
1,668
8
Net increase (decrease) in cash and cash equivalents
$
6
$
(423)
26. Contingencies
We consider provisions for all of our outstanding and pending legal claims to be adequate. The final outcome with
respect to actions outstanding or pending as at December 31, 2021, or with respect to future claims, cannot be predicted
with certainty. Significant contingencies not disclosed elsewhere in the notes to our financial statements are as follows:
Upper Columbia River Basin
Teck American Inc. (TAI) continues studies under the 2006 settlement agreement with the U.S. Environmental Protection
Agency (EPA) to conduct a remedial investigation on the Upper Columbia River in Washington State.
126 Teck 2021 Annual Report | Purpose Driven
The Lake Roosevelt litigation involving TML in the Federal District Court for the Eastern District of Washington
continues. In December 2012 on the basis of stipulated facts agreed between TML and the plaintiffs, the Court found
in favour of the plaintiffs in phase one of the case, issuing a declaratory judgment that TML is liable under the
Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for response costs, the amount of
which will be determined in later phases of the case. TML has exhausted its appeal rights in respect of that decision.
The case relates to historic discharges of slag and effluent from TML’s Trail metallurgical facility to the Upper Columbia
River. As a consequence of a ruling of the Ninth Circuit Court of Appeals, alleged damages associated with air emissions
from the Trail facility are no longer part of the case.
A hearing with respect to natural resource damages and assessment costs is expected to follow completion of the
remedial investigation and feasibility study being undertaken by TAI.
Until the studies contemplated by the EPA settlement agreement and additional damage assessments are completed, it
is not possible to estimate the extent and cost, if any, of any additional remediation or restoration that may be required or
to assess the extent of our potential liability for damages. The studies may conclude, on the basis of risk, cost, technical
feasibility or other grounds, that no remediation other than some residential soil removal should be undertaken. If other
remediation is required and damage to resources found, the cost of that remediation may be material.
Elk Valley Water Quality
In the first quarter of 2021, Teck Coal Limited (TCL) pleaded guilty in relation to two counts charging offences under
s.36(3) of the Fisheries Act relating to 2012 discharges of selenium and calcite to a mine settling pond and to the upper
Fording River from its Fording River and Greenhills steelmaking coal operations in the Elk Valley region of British
Columbia. In accordance with a joint sentencing submission by the Crown and TCL, in January 2022 TCL paid a fine of
$2 million and made a contribution to the Environmental Damages Fund of $28 million in respect of each offence for a
total of $60 million. The amount of the penalties was recorded as a short-term liability within trade accounts payable
and other liabilities on our balance sheet as at December 31, 2021. The Crown will not proceed with charges relating to
the same discharges over the period from 2013 to 2019.
27. Commitments
a) Capital Commitments
As at December 31, 2021, we had contracted for $1.33 billion of capital expenditures that have not yet been incurred for
the purchase and construction of property, plant and equipment. This amount includes $1.1 billion for QB2, $67 million
for our steelmaking coal operations and $113 million for our 22.5% share of Antamina. The amount includes $1.27 billion
that is expected to be incurred within one year and $62 million within two to five years.
b) Red Dog Royalty
In accordance with the operating agreement governing the Red Dog mine, TAK pays a royalty to NANA Regional
Corporation, Inc. (NANA) on the net proceeds of production. A 25% royalty became payable in the third quarter of 2007
after we had recovered cumulative advance royalties previously paid to NANA. The net proceeds of production royalty
rate will increase by 5% every fifth year to a maximum of 50%. The increase to 35% of net proceeds of production
occurred in the fourth quarter of 2017. An expense of US$255 million was recorded in 2021 (2020 – US$175 million) in
respect of this royalty. The NANA royalty is expected to increase another 5% to 40% in the fourth quarter of 2022.
c) Antamina Royalty
Our interest in the Antamina mine is subject to a net profits royalty equivalent to 7.4% of our share of the mine’s free
cash flow. An expense of $50 million was recorded in 2021 (2020 – $27 million) in respect of this royalty.
Consolidated Financial Statements
127
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
27. Commitments (continued)
d) Purchase Commitments
We have a number of forward purchase commitments for the purchase of concentrates and other process inputs and for
shipping and distribution of products, which are incurred in the normal course of business. The majority of these
contracts are subject to force majeure provisions.
In 2021, we entered into an 18-year contractual arrangement to purchase power for our Quebrada Blanca Operations
starting in 2022. This arrangement requires payments of approximately $277 million per year.
In 2020, we entered into a 14-year contractual arrangement to purchase power for our Carmen de Andacollo Operations.
This arrangement requires payments of approximately $52 million per year.
In 2018, we entered into a 20-year contractual arrangement to purchase power for our Trail Operations, with an option to extend
for a further 10 years. This arrangement requires payments of approximately $75 million per year, escalating at 2% per year.
28. Segmented Information
Based on the primary products we produce and our development projects, we have five reportable segments that we
report to our Chief Executive Officer – copper, zinc, steelmaking coal, energy and corporate. The corporate segment
includes all of our initiatives in other commodities, our corporate growth activities and groups that provide
administrative, technical, financial and other support to all of our business units. Other operating income (expenses)
include general and administration, exploration, research and innovation and other operating income (expense). Sales
between segments are carried out on terms that arm’s-length parties would use. Total assets do not include intra-
group receivables between segments. Deferred tax assets have been allocated among segments.
(CAD$ in millions)
December 31, 2021
Copper
Steelmaking
Coal
Zinc
Energy
Corporate
Total
Segment revenue
$ 3,452
$ 3,574
$ 6,251
$
715
$
Less intra-segment revenue
–
(511)
–
Revenue (Note 5(a))
Cost of sales
Gross profit (loss)
3,452
3,063
6,251
(1 ,711)
(2,375)
(3,466)
1 ,741
688
2,785
Impairment reversal (Note 7(a))
Other operating income (expense)
Profit (loss) from operations
Net finance income (expense)
Non-operating income (expense)
Share of loss of associates
and joint ventures
215
(14)
1,942
(116)
(137)
(3)
–
(41)
647
(47)
4
–
–
153
2,938
(91)
–
–
–
715
(848)
(133)
–
(21)
(154)
(26)
–
–
–
–
–
–
–
–
(523)
$ 13,992
(511)
13,481
(8,400)
5,081
215
(446)
(523)
4,850
70
28
–
(210)
(105)
(3)
Profit (loss) before taxes
1,686
604
2,847
(180)
(425)
4,532
Capital expenditures
Goodwill (Note 16)
Total assets
3,074
389
259
–
1,284
702
83
–
13
–
4,713
1,091
$ 18,077
$ 4,401
$ 18,390
$ 2,704
$ 3,796
$ 47,368
128 Teck 2021 Annual Report | Purpose Driven
(CAD$ in millions)
December 31, 2020
Copper
Steelmaking
Coal
Zinc
Energy
Corporate
Total
Segment revenue
$ 2,419
$ 3,164
$ 3,375
$
454
$
Less intra-segment revenue
–
(464)
–
Revenue (Note 5(a))
2,419
2,700
3,375
Cost of sales
Gross profit (loss)
Asset impairment (Note 7(a))
Other operating expenses
Profit (loss) from operations
Net finance income (expense)
Non-operating income (expense)
Share of gain (loss) of associates
and joint ventures
Profit (loss) before taxes
Capital expenditures
Goodwill (Note 16)
(1,560)
(2,17 7)
(3,098)
859
–
(323)
536
(151)
38
1
424
1,990
391
523
–
(98)
425
(44)
(4)
–
377
247
–
277
–
(193)
84
(56)
13
–
41
1,284
702
–
454
(780)
(326)
(1,244)
(28)
(1,598)
(26)
–
–
–
–
–
–
–
–
(357)
(357)
9
(4)
(2)
$ 9,41 2
(464)
8,948
(7,615)
1,333
(1,244)
(999)
(910)
(268)
43
(1)
(1,624)
(354)
(1,136)
91
–
16
–
3,628
1,093
Total assets
$ 14,546
$ 4,006
$
17,266
$
2,658
$
2,802
$ 41,278
The geographical distribution of our non-current assets, other than financial instruments, deferred tax assets and
post-employment benefit assets, is as follows:
(CAD$ in millions)
Canada
Chile
United States
Peru
Other
December 31, December 31,
2020
2021
$
22,949
13,7 71
1,788
1,597
162
$
22,410
10,555
1,710
1,483
157
$ 40,267
$
36,315
Consolidated Financial Statements
129
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
29. Financial Instruments and Financial Risk Management
a) Financial Risk Management
Our activities expose us to a variety of financial risks, which include foreign exchange risk, liquidity risk, interest rate
risk, commodity price risk, credit risk and other risks associated with capital markets. From time to time, we may use
foreign exchange, commodity price and interest rate contracts to manage exposure to fluctuations in these variables.
Our use of derivatives is based on established practices and parameters to mitigate risk and is subject to the oversight
of our Financial Risk Management Committee and our Board of Directors.
Foreign Exchange Risk
We operate on an international basis, and therefore, foreign exchange risk exposures arise from transactions denominated
in a currency other than the functional currency of the entity. Our foreign exchange risk arises primarily with respect to the
U.S. dollar, Chilean peso and Peruvian sol. Our cash flows from Canadian, Chilean and Peruvian operations are exposed to
foreign exchange risk, as commodity sales are denominated in U.S. dollars and a substantial portion of operating expenses
is denominated in local currencies.
We also have various investments in U.S. dollar functional currency subsidiaries, whose net assets are exposed to foreign
currency translation risk. This currency exposure is managed in part through our U.S. dollar denominated debt as a hedge
against these net investments.
U.S. dollar financial instruments subject to foreign exchange risk consist of U.S. dollar denominated items held in
Canada and are summarized below.
(US$ in millions)
Cash and cash equivalents
Trade and settlement receivables
Trade accounts payable and other liabilities
Debt
Reduced by: Debt designated as a hedging instrument in our net investment hedge
Net U.S. dollar exposure
December 31, December 31,
2020
2021
$
$
664
1,042
(703)
(3,479)
2,697
23
616
(608)
(3,741)
3,575
$
221
$
(135)
As at December 31, 2021, with other variables unchanged, a $0.10 strengthening of the Canadian dollar against the
U.S. dollar would result in a $17 million pre-tax loss (2020 – $18 million pre-tax gain) from our financial instruments.
There would also be a $582 million pre-tax loss (2020 – $415 million) in other comprehensive income (loss) from
the translation of our foreign operations. The inverse effect would result if the Canadian dollar weakened by $0.10
against the U.S. dollar.
Liquidity Risk
Liquidity risk arises from our general and capital funding requirements. We have planning, budgeting and forecasting
processes to help determine our funding requirements to meet various contractual and other obligations. Note 18(d)
details our available credit facilities as at December 31, 2021.
130 Teck 2021 Annual Report | Purpose Driven
Contractual undiscounted cash flow requirements for financial liabilities as at December 31, 2021 are as follows:
(CAD$ in millions)
Trade accounts payable and
other liabilities
Debt (Note 18(f))
Lease liabilities
Obligation to Neptune Bulk Terminals
ENAMI preferential dividend liability
QB2 advances from SMM/SC
QB2 variable consideration to IMSA
Other liabilities
213
154
–
–
–
–
–
Estimated interest payments on debt
277
Estimated interest payments on
QB2 advances from SMM/SC
Estimated interest payments on lease
and other liabilities
–
16
Less Than
1 Year
2—3 Years
4—5 Years
More Than
5 Years
$
3,045
$
–
$
–
$
–
$
Total
3,045
7,487
1 , 128
170
105
1 , 27 1
126
232
4,408
5,594
611
–
46
1,271
–
37
2,907
1,753
1,753
30
82
808
191
26
43
–
63
139
623
–
24
872
172
144
16
–
63
56
601
–
12
During the year ended December 31, 2021, we entered into a receivable factoring facility for metal concentrate sales,
where from time to time we are able to factor specified invoices. In addition, we also have a receivable factoring facility
for steelmaking coal sales, which was entered into during the year ended December 31, 2020. The counterparty to these
arrangements has discretion to determine the amount of invoices it factors under the arrangements. The derecognition
criteria is met for these receivables upon execution of the transaction.
Interest Rate Risk
Our interest rate risk arises in respect of our holdings of cash, cash equivalents and floating rate debt. Our interest rate
management policy is to borrow at both fixed and floating rates to offset financial risks.
Cash and cash equivalents have short terms to maturity and receive interest based on market interest rates.
A 1% increase in the short-term interest rate at the beginning of the year, with other variables unchanged, would have
resulted in a $1 million pre-tax decrease in our profit (loss) (2020 – $4 million). There would be no effect on other
comprehensive income (loss).
Commodity Price Risk
We are subject to price risk from fluctuations in market prices of the commodities that we produce. From time to time,
we may use commodity price contracts to manage our exposure to fluctuations in commodity prices. At the balance
sheet date, we had zinc and lead derivative contracts outstanding as described in (b) below.
Our commodity price risk associated with financial instruments primarily relates to changes in fair value caused by final
settlement pricing adjustments to receivables and payables, derivative contracts for zinc and lead and embedded
derivatives in our TAK road and port contract, in the ongoing payments under our silver stream and gold stream
arrangements and in the QB2 variable consideration to IMSA.
Consolidated Financial Statements
131
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
29. Financial Instruments and Financial Risk Management (continued)
The following represents the effect on profit (loss) attributable to shareholders from a 10% change in commodity prices,
based on outstanding receivables and payables subject to final pricing adjustments at December 31, 2021. There is no
effect on other comprehensive income (loss).
(CAD$ in millions, except for US$/lb. data)
2021
2020
2021
2020
Copper
Zinc
US$4.42/lb.
US$1.62/lb.
US$3.52/lb.
US$1.24/lb.
$
$
53
7
$
$
36
(2)
Price on December 31,
Change in Profit
Attributable to Shareholders
A 10% change in the price of copper, zinc, lead, silver and gold, respectively, with other variables unchanged, would
change our net asset relating to derivatives and embedded derivatives, excluding receivables and payables subject to
final pricing adjustments and would change our pre-tax profit (loss) attributable to shareholders by $23 million (2020
– $32 million). There would be no effect on other comprehensive income (loss).
Credit Risk
Credit risk arises from cash, cash equivalents, derivative contracts, debt securities and trade receivables. While we are
exposed to credit losses due to the non-performance of our counterparties, there are no significant concentrations of
credit risk and we do not consider this to be a material risk.
Our primary counterparties related to our cash, cash equivalents, derivative contracts and debt securities carry
investment grade ratings as assessed by external rating agencies, which are monitored on an ongoing basis. All of our
commercial customers are assessed for credit quality at least once a year or more frequently if business- or customer-
specific conditions change based on an extensive credit rating scorecard developed internally using key credit metrics
and measurements that were adapted from S&P’s and Moody’s rating methodologies. Sales to customers that do not
meet the credit quality criteria are secured either by a parental guarantee, a letter of credit or prepayment.
For our trade receivables, we apply the simplified approach for determining expected credit losses, which requires us
to determine the lifetime expected losses for all our trade receivables. The expected lifetime credit loss provision for
our trade receivables is based on historical counterparty default rates and adjusted for relevant forward-looking
information, as required. Since the majority of our customers are considered to have low default risk and our historical
default rate and frequency of losses are low, the lifetime expected credit loss allowance for trade receivables is
nominal as at December 31, 2021.
Our investments in debt securities carried at fair value through other comprehensive income (loss) are considered to
have low credit risk, as our counterparties have investment grade credit ratings. The credit risk of our investments in
debt securities has not increased significantly since initial recognition of these investments and accordingly, the loss
allowance for investments in debt securities is determined based on the 12-month expected credit losses. The
12-month expected credit loss allowance is based on historical and forward-looking default rates for investment grade
entities, which are low and, accordingly, the 12-month expected credit loss allowance for our investments in debt
securities is nominal as at December 31, 2021.
b) Derivative Financial Instruments and Hedges
Sale and Purchase Contracts
We record adjustments to our settlement receivables and payables for provisionally priced sales and purchases,
respectively, in periods up to the date of final pricing based on movements in quoted market prices or published price
assessments for steelmaking coal. These arrangements are based on the market price of the commodity and the
132 Teck 2021 Annual Report | Purpose Driven
value of our settlement receivables and payables will vary, as prices for the underlying commodities vary in the metal
markets. These final pricing adjustments result in gains (losses from purchases) in a rising price environment and
losses (gains from purchases) in a declining price environment and are recorded in other operating income (expense).
The table below outlines our outstanding settlement receivables and payables, which were provisionally valued at
December 31, 2021 and December 31, 2020.
(Pounds in millions)
Receivable positions
Copper
Zinc
Lead
Payable positions
Zinc payable
Lead payable
Outstanding at
December 31, 2021
Outstanding at
December 31, 2020
Pounds
US$/lb.
Pounds
US$/lb.
156
175
53
63
10
$
$
$
$
$
4.42
1.62
1.06
1.62
1.06
132
142
42
112
19
$
$
$
$
$
3.52
1.24
0.90
1.24
0.90
At December 31, 2021, total outstanding settlement receivables were $1.1 billion (2020 – $949 million) and total
outstanding settlement payables were $39 million (2020 – $61 million) (Note 17). These amounts are included in trade
and settlement receivables and in trade accounts payable and other liabilities, respectively, on the consolidated
balance sheet.
Zinc and Lead Swaps
Due to ice conditions, the port serving our Red Dog mine is normally only able to ship concentrates from July to
October each year. As a result, zinc and lead concentrate sales volumes are generally higher in the third and fourth
quarter of each year than in the first and second quarter. During 2021 and 2020, we purchased and sold zinc and lead
swaps to match our economic exposure to the average zinc and lead prices over our shipping year, which is from July
of one year to June of the following year. We do not apply hedge accounting to the zinc or lead swaps.
The fair value of our commodity swaps is calculated using a discounted cash flow method based on forward metal
prices. A summary of these derivative contracts and related fair values as at December 31, 2021 is as follows:
Derivatives not designated
as hedging instruments
Zinc swaps
Lead swaps
Quantity
140 million lbs.
59 million lbs.
Average Price
of Purchase
Commitments
US$1.60/lb.
US$1.04/lb.
Average Price
of Sale
Commitments
US$1.57/lb.
US$1.05/lb.
Fair Value
Asset
(CAD$ in millions)
$
$
9
–
9
All free-standing derivative contracts mature in 2022.
Free-standing derivatives not designated as hedging instruments are recorded in prepaids and other current assets in
the amount of $9 million on the consolidated balance sheet.
Consolidated Financial Statements
133
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
29. Financial Instruments and Financial Risk Management (continued)
Derivatives Not Designated as Hedging Instruments and Embedded Derivatives
(CAD$ in millions)
Zinc derivatives
Lead derivatives
Settlement receivables and payables (Note 8)
Contingent zinc escalation payment embedded derivative (c)
Gold stream embedded derivative (c)
Silver stream embedded derivative (c)
QB2 variable consideration to IMSA (Note 10(a))
Accounting Hedges
Net investment hedge
Amount of Gain (Loss) Recognized in
Other Operating Income (Expense)
and Non-Operating Income (Expense)
2021
2020
$
$
17
4
442
(28)
(8)
(7)
(97)
12
(5)
47
(1)
28
28
—
$
323
$
109
We manage the foreign currency translation risk of our various investments in U.S. dollar functional currency subsidiaries
in part through the designation of our U.S. dollar denominated debt as a hedge against these net investments. We
designate the spot element of the U.S. dollar debt as the hedging instrument. As only the spot rate element of the debt is
designated in the hedging relationship, no ineffectiveness is expected and no ineffectiveness was recognized in profit
(loss) for the years ended December 31, 2021 and 2020. The hedged foreign currency risk component is the change in
the carrying amount of the net assets of the U.S. dollar functional currency subsidiaries arising from spot U.S. dollar to
Canadian dollar exchange rate movements. At December 31, 2021, US$2.7 billion of our debt (2020 – US$3.6 billion)
and U.S. dollar investment in foreign operations were designated in a net investment hedging relationship. During the
year ended December 31, 2021, $13 million (2020 – $128 million) of foreign exchange translation on our U.S. dollar
investment in foreign operations was hedged by an offsetting amount of foreign exchange translation on our U.S. dollar
denominated debt. Refer to Note 24(e) for the effect of our net investment hedges on other comprehensive income (loss).
c) Embedded Derivatives
The TAK road and port contract contains a contingent zinc escalation payment that is considered to be an embedded
derivative. The fair value of this embedded derivative was $60 million at December 31, 2021 (2020 – $32 million),
of which $9 million (2020 – $6 million) is included in trade accounts payables and other liabilities and the remaining
$51 million (2020 – $26 million) is included in provisions and other liabilities.
The gold stream and silver stream agreements entered into in 2015 each contain an embedded derivative in the
ongoing future payments due to us. The gold stream’s 15% ongoing payment contains an embedded derivative relating
to the gold price. The fair value of this embedded derivative was $43 million at December 31, 2021 (2020 – $51 million),
of which $3 million (2020 – $5 million) is included in prepaids and other current assets and the remaining $40 million
(2020 – $46 million) is included in financial and other assets. The silver stream’s 5% ongoing payment contains an
embedded derivative relating to the silver price. The fair value of this embedded derivative was $25 million at
December 31, 2021 (2020 – $33 million), of which $2 million (2020 – $2 million) is included in prepaids and other current
assets and the remaining $23 million (2020 – $31 million) is included in financial and other assets.
30. Fair Value Measurements
Certain of our financial assets and liabilities are measured at fair value on a recurring basis and classified in their entirety
based on the lowest level of input that is significant to the fair value measurement. Certain non-financial assets and
134 Teck 2021 Annual Report | Purpose Driven
liabilities may also be measured at fair value on a non-recurring basis. There are three levels of the fair value hierarchy
that prioritize the inputs to valuation techniques used to measure fair value, with Level 1 inputs having the highest priority.
The levels and the valuation techniques used to value our financial assets and liabilities are described below:
Level 1 – Quoted Prices in Active Markets for Identical Assets
Level 1 inputs are unadjusted quoted prices in active markets that are accessible at the measurement date for
identical, unrestricted assets or liabilities.
Certain cash equivalents, certain marketable equity securities and certain debt securities are valued using quoted
market prices in active markets. Accordingly, these items are included in Level 1 of the fair value hierarchy.
Level 2 – Significant Observable Inputs Other than Quoted Prices
Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active
markets, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Derivative instruments and embedded derivatives are included in Level 2 of the fair value hierarchy, as they are valued
using pricing models or discounted cash flow models. These models require a variety of inputs, including, but not
limited to, market prices, forward price curves, yield curves and credit spreads. These inputs are obtained from or
corroborated with the market. Also included in Level 2 are settlement receivables and settlement payables from
provisional pricing on concentrate sales and purchases, certain refined metal sales and steelmaking coal sales because
they are valued using quoted market prices derived based on forward curves for the respective commodities and
published price assessments for steelmaking coal sales.
Level 3 – Significant Unobservable Inputs
Level 3 inputs are unobservable (supported by little or no market activity).
We include investments in certain debt securities and certain equity securities in non-public companies in Level 3 of
the fair value hierarchy because they trade infrequently and have little price transparency.
The fair values of our financial assets and liabilities measured at fair value on a recurring basis at December 31, 2021
and 2020, are summarized in the following table:
(CAD$ in millions)
2021
2020
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial assets
Cash equivalents
Marketable equity securities
Debt securities
Settlement receivables
Derivative instruments
and embedded derivatives
41
104
–
–
$ 790
$
$
–
–
–
– $ 790
88
47
105
1,126
–
1
$ 313
$
–
–
–
949
64
88
–
1,126
78
–
78
–
96
$
–
$ 313
38
2
–
–
102
90
949
96
$ 935
$ 1,204
$
48 $ 2,187
$ 465
$ 1,045
$
40
$ 1,550
Financial liabilities
Derivative instruments
and embedded derivatives
$
Settlement payables
$
–
–
–
$
158
$
39
– $
–
158
39
$
$
197
$
– $
197
$
–
–
–
$
$
32
61
$
93
$
–
–
–
$
$
32
61
93
Consolidated Financial Statements
135
Notes to Consolidated Financial Statements Years ended December 31, 2021 and 2020
30. Fair Value Measurements (continued)
The discounted cash flow models used to determine the FVLCD of certain non-financial assets, are classified as
Level 3 measurements. Refer to Note 7 for information about these fair value measurements.
Unless disclosed elsewhere in our financial statements (Note 18 and Note 20), the fair value of the remaining financial
assets and financial liabilities approximate their carrying value.
31. Capital Management
The capital we manage is the total of equity and debt on our balance sheet. Our capital management objectives are
to maintain access to the capital we require to operate and grow our business while minimizing the cost of such capital
and providing for returns to our investors. Our financial policies are to maintain, on average over time, a target debt-to-
EBITDA ratio of approximately 2.0x, consistent with an Investment Grade credit rating. This ratio is expected to vary
from its target level from time to time, reflecting commodity price cycles and corporate activity, including the
development of major projects. We may also review and amend such policy targets from time to time. We maintain one
committed revolving facility in the amount of US$4.0 billion. As at December 31, 2021, our US$4.0 billion revolving credit
facility was undrawn. This facility was converted into a sustainability-linked facility in October of 2021 and extended to
mature in October 2026. It includes a financial covenant that requires us to maintain a net debt-to-capitalization
ratio that does not exceed 0.60 to 1.0 (Note 18(d)).
As at December 31, 2021, our debt-to-adjusted EBITDA ratio was 1.2 (2020 – 2.7) and our net debt-to-capitalization
ratio was 0.22 to 1.0 (2020 – 0.24 to 1.0). We manage the risk of not meeting our financial targets through the issuance
and repayment of debt, our distribution policy, the issuance of equity capital and asset sales, as well as through the
ongoing management of operations, investments and capital expenditures.
32. Key Management Compensation
The compensation for key management recognized in total comprehensive income (loss) in respect of employee
services is summarized in the table below. Key management includes our directors, President and Chief Executive
Officer, executive vice presidents and senior vice presidents.
(CAD$ in millions)
Salaries, bonuses, director fees and other short-term benefits
Post-employment benefits
Share option compensation expense
Compensation expense related to Units
2021
2020
$
$
21
1
12
48
82
$
$
19
8
10
6
43
136 Teck 2021 Annual Report | Purpose Driven
Board of Directors1
Sheila A. Murray (1),(4)
Chair of the Board
Director since 2018
Norman B. Keevil III (1)
Vice Chair of the Board
Director since 1997
Tracey L. McVicar (1),(2),(5)
Director since 2014
Kenneth W. Pickering (3),(5),(6)
Director since 2015
Donald R. Lindsay (1)
President and Chief Executive Officer
Director since 2005
Una M. Power (1),(2),(3),(4)
Director since 2017
Mayank M. Ashar (2),(3),(6)
Director since 2007
Paul G. Schiodtz
Director since 2022
Quan Chong
Director since 2016
Timothy R. Snider (1),(4),(5),(6)
Director since 2015
Edward C. Dowling (1),(3),(4),(6)
Director since 2012
Toru Higo (5)
Director since 2019
Sarah A. Strunk
Director since 2022
Masaru Tani
Director since 2021
Notes:
(1) Member of the Executive Committee
(2) Member of the Audit Committee
(3) Member of the Compensation & Talent Committee
(4) Member of the Corporate Governance & Nominating Committee
(5) Member of the Safety & Sustainability Committee
(6) Member of the Technical Committee
1 Directors listed as at February 23, 2022. More information on our directors and officers can be found in our most recent Annual Information Form
or in our Management Proxy Circular, which are available on our website at www.teck.com, under our profile on SEDAR at www.sedar.com, and on the
EDGAR section of the United States Securities and Exchange Commission website at www.sec.gov.
Board of Directors
137
Officers1
Sheila A. Murray
Chair of the Board
Norman B. Keevil III
Vice Chair of the Board
Donald R. Lindsay
President and Chief Executive Officer
Harry M. Conger
Executive Vice President and
Chief Operating Officer
Jonathan H. Price
Executive Vice President and
Chief Financial Officer
Robin B. Sheremeta
Senior Vice President, Coal
Marcia M. Smith
Senior Vice President, Sustainability
and External Affairs
M. Colin Joudrie
Vice President, Business
Development
Scott E. Maloney
Vice President, Environment
Dean C. Winsor
Senior Vice President and Chief
Human Resources Officer
Stuart R. McCracken
Vice President, Exploration
and Geoscience
Ian K. Anderson
Vice President, Logistics
Brianne L. Metzger-Doran
Vice President, Health and Safety
Greg J. Brouwer
Vice President, Transformation
Shehzad Bharmal
Senior Vice President, Base Metals
Douglas B. Brown
Vice President, Corporate Affairs
Alex N. Christopher
Senior Vice President, Projects
and Technical Services
Réal Foley
Senior Vice President,
Marketing and Logistics
Nicholas P.M. Hooper
Senior Vice President, Corporate
Development and Exploration
Ralph J. Lutes
Senior Vice President, Asia
and Europe
Kieron McFadyen
Senior Vice President, Energy
Andrew K. Milner
Senior Vice President and Chief
Transformation Officer
H. Fraser Phillips
Senior Vice President, Investor
Relations and Strategic Analysis
Peter C. Rozee
Senior Vice President, Commercial
and Legal Affairs
Anne J. Chalmers
Vice President, Risk and Security
Amparo Cornejo
Vice President, Corporate Affairs
and Sustainability, South America
Larry M. Davey
Vice President, Maintenance
Sepanta Dorri
Vice President, Decarbonization
Justine B. Fisher
Vice President and Treasurer
C. Jeffrey Hanman
Vice President, Sustainable
Development, Coal
Sarah A. Hughes
Vice President, Assurance
and Advisory
Amber C. Johnston-Billings
Vice President, Communities,
Government Affairs and
HSEC Systems
Karla L. Mills
Vice President, Project
Development
Douglas J. Powrie
Vice President, Tax
Crystal J. Prystai
Vice President and Corporate
Controller
Amanda R. Robinson
Corporate Secretary
Kalev Ruberg
Vice President and Chief
Innovation Officer
Donald J. Sander
Vice President, Planning
and Innovation, Coal
André D. Stark
Vice President, Marketing
Nikola Uzelac
Vice President, Legal
1 Officers listed as at February 23, 2022. More information on our directors and officers can be found in our most recent Annual Information Form
or in our Management Proxy Circular, which are available on our website at www.teck.com, under our profile on SEDAR at www.sedar.com, and on the
EDGAR section of the United States Securities and Exchange Commission website at www.sec.gov.
138 Teck 2021 Annual Report | Purpose Driven
Corporate Information
2021 Share Prices and Trading Volume
Class B subordinate voting shares–TSX–CAD$/share
Q1
Q2
Q3
Q4
Class B subordinate voting shares–NYSE–US$/share
Q1
Q2
Q3
Q4
Class A common shares–TSX–CAD$/share
Q1
Q2
Q3
Q4
Stock Exchanges
Our Class A common shares and Class B subordinate voting
shares are listed on the Toronto Stock Exchange under the
symbols TECK.A and TECK.B, respectively.
Our Class B subordinate voting shares are also listed on the
New York Stock Exchange under the symbol TECK.
Dividends Declared on Class A and B Shares
Amount per share Payment Date
March 31, 2021
$
June 30, 2021
$
September 29, 2021
$
December 31, 2021
$
0.05
0.05
0.05
0.05
These dividends are eligible for both the Canadian federal
and provincial enhanced dividend tax credits.
Shares Outstanding at December 31, 2021
Class A common shares
Class B subordinate voting shares
7,765,503
526,448,506
Annual Meeting
Our annual meeting of shareholders will be held at
12:00 p.m. on April 27, 2022.
Transfer Agents
Inquiries regarding change of address, stock transfers, registered
shareholdings, dividends, estate matters, or lost certificates
should be directed to our Registrar and Transfer Agent:
TSX Trust Company
1600 – 1066 West Hastings Street,
Vancouver, British Columbia V6E 3X1
High
29.81
32.27
34.25
37.11
High
23.93
26.72
27.08
29.91
High
34.75
42.50
38.00
40.00
$
$
$
$
$
$
$
$
$
$
$
$
Low
21.86
23.99
24.84
30.46
Low
17.31
19.07
19.33
24.12
Low
25.25
30.72
28.70
35.06
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Close
24.07
28.55
31.53
36.43
Volume
147,568,168
132,511,972
116,159,311
111,289,835
507,529,286
Close
19.18
23.04
24.91
28.82
Volume
70,257,769
73,337,671
70,148,273
58,589,873
272,333,586
Close
30.50
36.43
36.84
38.20
Volume
272,656
193,511
118,430
109,936
694,533
TSX Trust Company provides an AnswerLine Service for the
convenience of shareholders:
Toll-free in Canada and the United States
+1.800.387.0825
Outside Canada and the United States
+1.416.682.3860
Email: inquiries@astfinancial.com
Website: https://tsxtrust.com//
American Stock Transfer & Trust Company, LLC
6201 – 15th Avenue,
Brooklyn, New York 11219
+1.800.937.5449 or +1.718.921.8124
Email: help@astfinancial.com
Website: www.astfinancial.com
TTY: +1.866.703.9077 or +1.718.921.8386
Auditors
PricewaterhouseCoopers LLP
Chartered Professional Accountants
Suite 1400, 250 Howe Street,
Vancouver, British Columbia V6C 3S7
Annual Information Form
We prepare an Annual Information Form that is filed with the
securities commissions or similar bodies in all the provinces of
Canada. Copies of our Annual Information Form and annual and
quarterly reports are available on request or on our website at
www.teck.com, under our profile on SEDAR at www.sedar.com,
and on the EDGAR section of the SEC website at www.sec.gov.
Corporate Information
139
Teck Resources Limited
Suite 3300, 550 Burrard Street
Vancouver, British Columbia, Canada
V6C 0B3
+1.604.699.4000 Tel
www.teck.com