Ladies and gentlemen, thank you for standing by, welcome to Teck’s second quarter 2009 earnings conference call. (Operator instructions) This conference is being recorded on July 23, 2009. I will now like to turn the meeting over to Mr. Greg Waller, Vice President, Investor Relations & Strategic Analysis. Please go ahead.

Thanks very much, Matt. Good morning, everyone, and thank you for joining us this morning. Before we start, I'd like to draw your attention to the forward-looking information slides in our presentation package on pages 2 and 3. This presentation contains forward-looking information regarding our business. Various risks and uncertainties may cause actual results to vary. Teck does not assume the obligation to update any forward-looking statements. At this point, I'd like to turn the call over to Don Lindsay.

Thanks very much Greg and good morning to all. I am pleased to report that we have now delivered on most of the steps in the plan that we announced last November. These achievements reflect the efforts of a great team of people here over the last nine months; I am pleased to be able to discuss our progress with you this morning. I would like to start with a review of the highlights of the past few months before I review the financial and operating results, I will then turn the presentation over to Ron Millos, our senior vice president, finance & CFO to address the more in depth financial topics. I should say a number of the other members of the management team are on the call this morning and available to answer your questions. Turning to slide 5, we completed a number of refinancing steps in the quarter and one of which we just completed subsequent to the end of the quarter. On the morning of our earnings call last quarter; we were able to announce that we had reached agreement with our lenders to amend the bridge and the term loan facility. The very positive results of these amendments in addition to all of the other steps that we have taken over the past eight months in executing on the plan put us in position to go to the bond market in early May. The bond offering was very well received. We raised $4.2 billion in a combination of five, seven and ten-year notes. This offering was well over-subscribed and provided net proceeds of $3.9 billion, which was used to repay a substantial portion of the bridge loan. In June we announced a non-binding agreement with BC Hydro to sell a one-third interest in the Waneta…

Thanks Don. I am moving on to slide 19. This slide shows our debt position as at July 22 reflecting our current equity issue and other payments that we have made on the term debt. As Don noted earlier, the bridge debt has now been completely repaid and the term debt has been reduced to $2.7 billion US. We have also staggered the maturity with the bonds that we issued in May so the maturity profile of our debt has now been significantly stretched out. Our total debt is now under US $8 billion or about $8.9 billion Canadian and that leaves us with a net debt to net debt plus equity ratio of about 37%, and for reference this ratio was about 51% at March 31. On slide 20, we have summarized our changes in cash for the quarter. Cash flow from operations was $421 million in the quarter, our working capital change was slightly negative as it normally is at this time of the year due to the seasonality of our business up at the Red Dog mine. We made net debt repayment of $1.21 billion in the quarter from our tax refunds and the proceeds of our asset sales. Capital expenditures were $148 million in the quarter and investments were $72 million primarily for our share of the funding of the Fort Hills project. The rate of spending overall but of Fort Hills in particular has now been significantly reduced and proceeds from asset sales that closed in the quarter were $132 million. After allowing for the effect of the exchange rates on cash and the cash flow from discontinued operations, our net change in cash in the quarter was a decrease of $882 million to a current balance of $750 million at the end of June.…

Thank you Ron and turning to slide 24, I just have some summary comments to make. We have come through a very difficult nine-month period and it is clear that the world economy is not fully back on track yet but we have seen very encouraging signs in our coal business. What is clear though is that Teck has come through this period in very good shape, we have very strong asset base in coal, copper and zinc businesses and we continue to deliver on the plan that we put in place last November. We are re-establishing a strong balance sheet through our non-core asset sales, debt rescheduling and a recent strategic investor issue. We are well positioned to continue to grow shareholder value. We have significantly internal growth prospects in our copper and oil sands businesses and the steps that we have been taking should enable us to invest in those assets when the timing is right. With that, I would like to open it up for questions.

Thank you. We will now take questions from telephone lines. (Operator instructions) Our first question is from Brett Levy from Jeffries and Company. You may go ahead. Brett Levy – Jeffries and Company: Hi guys. Great job managing through all of these tough financial markets and commodity markets, it is a tough thing to get through, you guys did very well. Let me first ask, are you guys done selling stuff? It seems like you have gotten your balance sheet for the most part fixed, is there anything else you want to sell and would it be significant or only smaller stuff at this point.

Hi. At this point I would say nothing significant, we are going to finish the smaller gold assets that we have previously dealt and which I just described. We have earlier been on the public record about looking for a 20% partner in our coal business but I have also said that we will be taking our time on that and it is also quite clear that given the strategic investor that we have now that it is not something that we need to do from a financial point of view. We do have the view that if there is a partner out there that would really strengthen the business, we would look at that quite seriously and we think that there is a possibility because of the discussions that we have had with a number of parties. There were two categories that I have previously referred, one is a very large customer that would buy 20% of the business and pay a pretty healthy price and at the same time take a 20% share of production and that of course would take up the market for everybody and probably affect pricing which we think would be good for the business. The other model is unitizing Australian coal production with Canadian coal production which I will not go through all the details today but we think would make a very, very strong competitor in the world market. So we are open to those kinds of discussions, let me put it this way, the buyers are more interested in us right now than we are in them, so we are going to wait and watch how the core market develops over the next year and we think it is coming our way and looking very positive. That is just a summary comment, there is no question that demand has picked up strongly and the issue actually is being able to go up to demand, we are finding that it is more and more difficult actually to increase production and I think you will see that throughout the industry. We have not been able to meet the full demand at this stage. Brett Levy – Jeffries and Company: That said obviously watching coal prices slip from up north of 300 to kind of where they are now, it seems as if – obviously iron ore is up 40% from its trough in March on the spot market, can you give a little bit of color as to what you might be seeing for 2010? Do you think you would clear 200 bucks a ton or I know you are talking [ph] your position and I know it is a bit early but really I get a sense that even maybe more than iron ore Metcoal is really tightening up.

We would hesitate to put a price on the table for next year but what we can say is the trend line is definitely positive, spot price is clearly above where the (inaudible) we are unable to meet our customer demand so trend line is very good but I would not want to make the prediction of what the actual price would be for next year. Brett Levy – Jeffries and Company: Where are you selling on spot right now?

Actually our issue is coal availability and I have actually spent the last two days with all of our coal management teams in Elk valley and visiting the mines (inaudible) in Calgary today seeing what we can do about increasing production because you cannot ramp up production quite as quickly as you would like to and that is the issue that we are having and I think the industry is having. So for the moment, we are not doing spot sale so we can produce some more coal. Brett Levy – Jeffries and Company: But where are you seeing spot prices right now?

We would not want to comment specifically other than to say that they are significantly above the bench mark though. I think there are a number of other sources, coal newsletters – Brett Levy – Jeffries and Company: I got it. I just wanted to get a sense as to what you guys are seeing from your customers. All right thanks, I will get back in queue.

Thank you.

Thank you. Our next question is from Dave Katz [ph] from JPMorgan. You may go ahead. Dave Katz – JPMorgan: Hi. I was hoping that you would talk a little more specifically about the growth of coal assets, you are saying right now that you are tight in that one cannot ramp up as quickly as one would like, I know in the past you have said that you could grow to $30 million with relatively little CapEx, do you think that tightness supports that or is that something that you would wait and see if it is a temporary phenomenon or not?

We do not think it is a temporary phenomenon and I have asked our coal management team to get those plans out again and refreshed. We have done a lot of detailed work between mid 2007 and mid 2008 on that plan to get to 30 million tons, actually that was specifically designed to get to 28 million tons by 2012 and then 30 by 2014. We do not know if that is possible in that schedule but it is certainly still possible to get to those production levels and the capital was in the grand scheme of things moderate meaning in the $400 million, $500 million range overall over a number of years. We are going to redo all that now just to refresh it because we do believe that the demand will be there. There is no doubt that the plans for building very large steel plants on the coast of China are continuing and that will have a significant effect on long-term demand for seaborne met coal. Dave Katz – JPMorgan: Okay and then with the oil sands CapEx in 2010, given the increase we have seen in oil prices, is there any plan on the deference that you guys had talked about earlier?

Nothing has been changed. There is not going to be very much spent in 2010 either on Fort Hills as (inaudible) reviews the project or on other projects which are still in a quite early stage, so that is not a significant factor in the company for a while yet. Dave Katz – JPMorgan: Okay and then finally, you mentioned in the slides that obtaining investment grade rating is a key goal at this point, what are the steps that you foresee of taking that would help put you there other than the steps that you have already taken?

I guess it certainly remains a very key goal and we have made a lot of progress towards getting to our target ratios. Our net debt to debt plus equity is now down to 37% and we have a target of 25% to 30%, we think that as we close the Waneta transaction and the other gold assets that will reduce the term loan by more than another $1 billion. And then cash flow from the end of June to the end of the year at current prices should certainly reduce the term loan to below $1 billion and thereafter we paid out by just cash flow. So it will not be that long before we will be in the target ratios but whether you will then get the upgrade to investment grade would depend upon the rating agencies themselves and their outlook for the industry and I think if you go back and look at the releases that they published on their view for the world that that has not changed yet then it may be some time but that is something that is sort of out of our hands but certainly the actions that we are taking will get us back into the ratios required reasonably soon. Dave Katz – JPMorgan: Thank you very much.

Thank you. Our next question is from Justine Fisher from Goldman Sachs. You may go ahead. Justine Fisher – Goldman Sachs: Good morning. Can you talk about the permitting situation at Red Dog and how that is progressing? I think you guys had mentioned that you wanted to see some traction, I think it was the third quarter of ’09 as far as accessing the new ore body there?

I am going to turn that one back to Vancouver.

Hi this is Leon Manuel, General Counsel. The permitting is on schedule and the supplemental and environmental impact statement will likely go public the first week of August. The earliest the permits could go final is the first week of September but realistically we expect some slippage in the final stages and expect the final permit to be issued around the first week of October. Justine Fisher – Goldman Sachs: And so if they are issued then the development of the new ore body should go as planned, right?

As long as there is not an appeal at that point. Justine Fisher – Goldman Sachs: Okay and if there is an appeal, what are the consequences for Red Dog, would it shut down entirely, how do you guys deal with that if there are any other slip-ups beyond the normal permitting process?

Well it depends on the nature of the appeal and what specific components of the permits are appealed and of course we will review that at the time. It is possible that if the appeal does go to the heart of the permitting process that that could delay our access to the ore body but we really have to see. And the site is working very hard with NGOs and other interested parties who have commented on the process to satisfy their concerns and mitigate to the extent possible the likelihood of an appeal. But that of course is not in our hands. Justine Fisher – Goldman Sachs: Okay. And then one last question on copper production Don, can you just go over again, so the sales in the quarter were 58,000 tons where production were 78,000 tons and I know that you guys have reduced your full-year guidance but are we going to see such a disconnect between sales and production for the last couple of quarters of the year as well?

It is unlikely. The reason for the difference in Q2 was primarily one shift that ended up in Q1 and we think in Q3 that sales and production will generally be matched but this does happen from quarter to quarter. You go back over the last five years and we probably had three different quarters where a (inaudible) ended up in the earlier or later quarters than we thought. So it is not really a major factor overall, for the year things should be relatively equal. Justine Fisher – Goldman Sachs: Okay, super, thanks so much.

Thank you. Our next question is from Greg Barnes from TD Newcrest. You may go ahead. Greg Barnes – TD Newcrest: Thank you operator. Don, just a question for you, in the conference call or in the press release you mentioned that Q3 sales may be constrained by your ability to produce clean coal. So are you implying you might not be able to meet that 6-million ton guidance because you cannot produce that much?

Well we have not changed the guidance because it is still our target and there is certainly production capability but it is tight and we are going to have to be really focused and some things will have to go our way. If it did not hit by Q3 it would end up in Q4. So overall for the half I think it is fine for the year, we certainly think it is fine but I go back to the comments I made earlier, you just cannot ramp up quite as quickly as you like so we are all focused on that, I have been working with the management the last couple of days literally looking at each mine and what it can do. Over the longer term they can ramp up quite substantially but when you have a turnaround in demand that has happened so quickly you cannot just turn on the tap and get production that quickly. Greg Barnes – TD Newcrest: Sure.

We will work though it, it is going to be close. Greg Barnes – TD Newcrest: Okay. (inaudible) is turning around I am sure you want to capture that, it looks like you might be kept out at 24 million tons this year and maybe next, so do you think you can push it, push it higher than that even next year?

Just to be clear, in 2009 the guidance that we had that was 18 to 20 and we said we will be up the upper range and that is still the case and -- Greg Barnes – TD Newcrest: Yes, I understand that just production capacity though, if you are doing 6 million tons in Q3 that would imply 24 million tons annually.

I see. You know and so then your question is, can we do that? Greg Barnes – TD Newcrest: Yes.

Yes we can. Greg Barnes – TD Newcrest: Can you push 24 million, 25 million in 2010?

I do not want to say anything definitive but certainly the installed capacity is in that range. We have done as high as I think 25.6 not that long ago and we will have more capital availability (inaudible) point of view which we will devote to making sure that happens but there is no guarantees but certainly the installed capacity is there, the plant capacity is certainly there. Greg Barnes – TD Newcrest: Okay. I was curious about your comments about the trend towards more spot sales and matching your sales more closely with customer requirements, what are you leading us towards there?

I think you are seeing that in different markets, there has been a lot of talk about iron ores as you know moving from annual to perhaps quarterly and a lot of spot business being done and of course the additional business that we have done this year and our competitors have done this year has essentially been spot mostly to China and the increase in the imports in China has happened so rapidly from an annual rate last year of 3.2 million tons to over 20 this year and that is customer by customer and ship by ship and we are just trying to keep up with it. It has not yet evolved into a long-term contract with those major plants and I do not know if it is going to. It will be interesting to see how that evolves. Greg Barnes – TD Newcrest: The benchmark system is cracking then?

I would not want to make too strong a statement on it but it will probably remain quite firm with the long-term customers that we have had in Japan and Korea and so on, I think it has worked quite well and those have been great customers but with other parts to market it may stay spot and we are just making observations here, we do not know yet. Greg Barnes – TD Newcrest: Okay, thanks a lot Don.

Thank you. Our next question is from Oscar Cabrera from Merrill Lynch. You may go ahead. Oscar Cabrera – Merrill Lynch: Hi, good morning everybody. Job well done in the quarter. Continuing with the coal theme, can you please remind us in terms of capacity relaxation or capacities at the mine and in the rail, what is the bottleneck there?

It is a range of things. It is not rail at the moment, it is people, shovels and trucks are stripping the coal mine by mine and literally bench by bench it is different constraints, when you are wound down because with steel industry dropped by 40% last fall and getting back up just takes some time. So there is no one big constraint. Oscar Cabrera – Merrill Lynch: Okay. My understanding was that the rail has a capacity of 27 million tons, you just mentioned that you can do close to 26 million tons, so is the rail capacity 27 million tons?

Actually I have got Bob Docker [ph] who could make a comment on that.

Oscar, you are probably referring to the capacity that CP has to carry coal, of course we are tripping on both CP and CN and we do not trip all of our coal westbound, a certain portion of our coal also goes eastbound. I would not see CP as having a constraint right now to carry the products we have but they have to speak to their capacity because it is impacted, the capacity for coal is heavily impacted by what other commodities they are using and also the length of train sets we have and a number of other factors but rail is not a constraint at the moment. Oscar Cabrera – Merrill Lynch: So sort of like a follow-up to that would be how long do you think it will take you guys to ramp up production to the levels that we have seen before like around 25 million tons?

The short answer is we do not know and I did hear you say 26 and I should point out that we have not done that before, I think we did 25.6 as the maximum. It may take a couple of years to ramp up to a new record level. It takes a bit of capital not a huge amount and it takes some time and orders – there is leap time for orders, equipment and things like that and there is no question that eventually you get there but we just do not know what the timetable is going to be. The bottom line is coal is going to remain quite tight because of these issues throughout the industry which will likely have an effect on price and where we end up exactly I know everyone will be trying to put some numbers in their model and we cannot be too precise on these numbers at the moment. Oscar Cabrera – Merrill Lynch: Fair enough, thank you.

Thank you. Our next question is from Jeff Cramer from UBS. You may go ahead. Jeff Cramer – UBS: Hi, good morning. Just wanted to follow up a little more on kind of the rate of change in demand and shipments into China, do you see that continuing to increase in July on the coal side?

We do not have that clear visibility on July at this stage. A lot of it depends on the mines in (inaudible) province that are closed and whether they would re-open or not and we will have to watch that day by day. We have people in China that pay close attention to this but at the moment the forecasts are that on an annualized basis that they are going to import something more than 20 million tons. Jeff Cramer – UBS: Okay. I guess as far as other parts of Asia that you export into, what are you seeing as far as changes in demand now?

Some of our core customers there have accelerated shipment partly due to their worry that China is going to capture more than they had anticipated, so that has been quite encouraging and quite positive for us. But for the overall tonnage for the year, I am not sure that there is significant changes versus the contract that we had already settled but the timing has clearly been a bit faster so whether that has an effect at the end of the year, too early to say. I mean I should comment, I know the nature of your question, I understand why you asked them but trying to do it on a month-to-month basis is just a little difficult. I think you have to look at over a longer period of time. Jeff Cramer – UBS: Sure, I appreciate that. Your shipments are guided to 6 million tons in the third quarter, some of that falling tonnage form the fourth quarter and we know fourth quarter may go a bit slower traditionally on a seasonal basis but that is the reason for the potential gap between the two.

No, it would be the exact opposite, I should be clear on that. We are remaining with the 6 million ton guidance for the third quarter our issue will be making the production not the sales. Sales are definitely there and in excess of that and so we believe the fourth quarter will be higher than the third quarter and it will be able to get the production by then. It is not an issue of sales, we backed off from getting more sales because we cannot meet the sales now. Jeff Cramer – UBS: Okay and just partly on the two labor negotiations that are going on right now, is there any reason to think those would end amicably?

No, the discussions are going just fine. Jeff Cramer – UBS: Okay, thank you.

Thank you. Our next question is from Kerry Smith from Haywood Securities. You may go ahead. Kerry Smith – Haywood Securities: Thanks operator. Don have you seen any re-land at all in coal sales into Europe and North America?

Moderate but there is no doubt that Asia is the strength in the market. There are some interesting signs like we have made shipments to customers that went for a long time and that sort of thing but there is not enough to say that there has been a significant output. Kerry Smith – Haywood Securities: Okay and would there be any, maybe Ron can answer this, would there be any carryover tonnage in Q3 from the ’08 contract?

Yes. Kerry Smith – Haywood Securities: And can you give me any indication as to how many tons that might be?

I think the way I would like to leave it and I am looking at Bob here in the Calgary office but we have announced the total carryover tonnage, we do have the schedule quarter by quarter with our customers and how that goes, but again, because of the variability of ships arriving and that sort of stuff, if we gave you one number Murphy’s law is it would end up being wrong. So I think it is best to stay with the total over the longer period of time that we have disclosed because we have a much higher level of confidence in that. Kerry Smith – Haywood Securities: Okay, and just finally the –

And then I should point out obviously that carryover tonnage number has increased again from the last number we have disclosed and that is another indication that has drawn the market. Kerry Smith – Haywood Securities: What is the last carryover number you gave? Just remind me.

It was 2.3 – it started at 1.5 million tons, then 2.3 million tons and now 3 million tons. Kerry Smith – Haywood Securities: Right, okay.

And you know the margin on that is quite significant, so we are -- Kerry Smith – Haywood Securities: Right, right, okay. And just finally, is there any – as know as the debt gets – or as the term facility gets retired or paid down, is there a point at which it is paid down so that you would no longer have any restrictions on your M&A capability and the cash report, are those restrictions in place until it is completely retired?

Well, the term loan has the restrictions that it has and they would remain in place as long as it is outstanding. We intend to pay it off as soon as we can. We don't have any M&A claims in any event, because we have got tremendous internal growth as it is. We are sort of past the phase of adding resources to the company. If you go back over three or four years, we were resource challenged in 2005 and particularly on the copper side, but we have tripled the resources in copper and now moved into a phase where it is congregating those resources to production cash flow and Andacollo is a good example of that. We had only 35% of the Elk Valley coal four years ago, now we have got 100% and we're focusing more on increasing production and capturing the additional sales. So, we don't really see any need for M&A for the foreseeable future for quite some time. Kerry Smith – Haywood Securities: Okay, great. Thanks a lot.

Thank you. (Operator instructions). Our first question is from Ian Howat from National Bank Financial. You may go ahead. Ian Howat – National Bank Financial: Yes, hi. Just a couple of follow-ups. Did I correctly hear you say that the carryover is now going to be 3 million tons, I don't see it in the release, but --

That is correct. Ian Howat – National Bank Financial: Okay. And then, again going forward, you don't foresee reaching those 30 million – or it is not in the plan currently to reach the 30 million ton level for some significant period of time?

Yes, that would take a while. You know, that is probably a – Ian Howat – National Bank Financial: Four or five years?

Four or five years, that is right. Ian Howat – National Bank Financial: Okay. And lastly, when you are at a dam [ph] is there any potential for actually increasing the electricity capacity of that to your benefit?

I will turn that one back to Vancouver but not much to –

Ian, it is Greg. We did those upgrades of the four turbine units over the last six or seven years I guess so we have increased the capacity there already. So, at this point, there is not much more we could do at – as we needed to increase power production. Ian Howat – National Bank Financial: And there is no more water available that you could access? Like downstream or anything else?

No. In fact, there is a – we sold, you may recall we sold a number of years ago the expansion rates on the small amount of water that is available to a – (inaudible) British Columbia and if they proceed with that and I think it is likely they will probably in the middle part of this decade, that will reduce power available from them. Ian Howat – National Bank Financial: Okay, thanks very much.

Ian, just to follow up. The 3 million carryover tons that is in the coal year, I should point out -- Ian Howat – National Bank Financial: Okay, all right. Thanks very much.

Thank you. Our next question is from Greg Barnes from TD Newcrest. You may go ahead. Greg Barnes – TD Newcrest: I saw you making some encouraging noises about zinc too in the press release. How is zinc demand shaping up for you?

Well, better than expected, though obviously we haven't seen a major recovery in the US yet but we can give some positive indications, demand has exceeded supply for three straight months now. We have still got the curtailment underway. At some point, we will take a look at that closely, we wouldn't want to go too quickly, but at the same time, our inventories have run down to quite low levels and our customers obviously have quite low inventories and are asking for kind of one-day delivery. So it has tightened up quite a bit, but we're going to watch it quite carefully. Greg Barnes – TD Newcrest: And on the coal inventories, you drew them down I think by about 700,000 tons in Q2, are you below comfortable levels now and what tonnage do you have in inventory at the mine and at the port?

That is just fine, down here we are actually at levels that we are fairly comfortable with. We are a little less than a million ton out of the coast, but that is a level that we are fairly comfortable with. At the mine site, it is not at bad levels either. Greg Barnes – TD Newcrest: Okay. And just finally for Ron, on your US dollar hedging, you said you have hedged about $800 million US to reflect your costs.

No, that is what is outstanding at the end of June, Greg. Greg Barnes – TD Newcrest: Okay. I think Fording used to hedge basically all of the US dollar revenue exposure from coal, are you planning to do the same or – what are you looking at?

We have basically done the same thing there, but we are hedging the exposure versus the 100%. So we factored US dollar operating costs, those types of things out of there and have hedged about 80% of that exposure over the coal year. Greg Barnes – TD Newcrest: Okay, are you planning to do more or not?

We will look at it down the road. Greg Barnes – TD Newcrest: Okay, thank you.

Thank you. Our next question is from Ralph Lafferty from Credit Suisse. You may go ahead. Ralph Lafferty – Credit Suisse: Hi, guys, thanks for taking my question. Ron, can you help us out on the tax rate guidance. It is not clear that 24% effective tax rate in the quarter, how much of that was the forty tax pools and how much of that was the FX gains being taxed at a lower rate. Can you help us with a number going forward? Thanks.

It is John Gingell the controller here in Vancouver. The tax pools don't really affect the overall tax rate, they affect the cash portion of it. The FX gain was about 12% of that number, so we would have been about 36% otherwise. Ralph Lafferty – Credit Suisse: And so 36% you would reckon is a good rate going forward?

It really depends on where our income is derived from, but that has traditionally been around that level. Ralph Lafferty – Credit Suisse: John, maybe just to elaborate on how that FX gain is taken out effectively so that it reduces the tax rate.

The FX gain is a capital item, so it is taxed at one half the rate that it otherwise might and so that is 15% in Canada. Ralph Lafferty – Credit Suisse: Okay, I got it, thank you, great.

Thank you. There are no more further questions registered. I would like to turn the meeting back to Mr. Lindsay for some closing remarks.

Thank you very much all for attending and we look forward to speaking with you again.

That ends the conference for today. You may now disconnect and have a wonderful day.