Westshore Denis Horgan · October, 2013 Westshore Terminals Investor UPDATE Westshore Terminals...

October, 2013

Westshore Terminals

Investor UPDATE

Westshore Terminals

Denis Horgan Vice President & General manager

Glenn Dudar Production Manager

Denis F. Horgan, BComm, CA

Bachelor of Commerce, University College Dublin, Ireland

Became member Institute of Chartered Accountants BC 1981

Joined Westshore as Controller 1988

Appointed Vice President & General Manager Westshore 2004

Vice President &

General Manager

Forward-looking statements

The foregoing statements concerning tonnages, coal prices, exchange rates, loading rates,

taxation and variability of distributions, and the expected timing of changes relating to those factors,

are forward-looking statements that reflect the current expectations of the Limited Partnership and

Westshore with respect to future events and performance. Wherever used, the words “may,” “will,”

“anticipate,” “intend,” “expect,” “plan,” “believe,” and similar expressions identify forward-looking

statements. Forward-looking statements should not be read as guarantees of future performance or

results, and will not necessarily be accurate indications of whether, or the times at which, such

performance or results will be achieved.

Forward-looking statements are based on information available at the time they are made,

assumptions made by management, and management’s good faith belief with respect to future

events, and are subject to the risks and uncertainties outlined in the Partnership’s annual

information form that could cause actual performance or results to differ materially from those

reflected in the forward-looking statements. All such statements will be

impacted by and are subject to the risks set out under Risk Factors in

the Limited Partnership’s annual information form.

Highlights

● Largest of three terminals on North American West Coast ● Capacity to increase to 36 million tonnes per year ● Customer contracts to 2021-22 ● Port Metro Vancouver lease to 2051

How we’ve fared

0

5

10

15

20

25

22.5 23.5

21.4 22.2 23.3

19.4 19.3

21.2 21.9 21.2

18.9

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

21.1 20.1

24.7

30 27.3

21.1

26.1

Million tonnes

2013 performance

22.5 million tonnes to end of September

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000 January

February

March

April

May

June

July

August

September

Million tonnes

Record month in August 3.2 million tonnes

Coal mine customers

cc

Rail carriers

55%

31%

14%

The coal mix

Energy coal shipments more than doubled since 2008

%

shipped

2012

Japan

Korea

Taiwan

Europe

South America

China

Other South Korea still No. 1

2002

Top global exporters 2012

Rank Country Total

1 Indonesia 348 million tonnes

2 Australia 316mt

3 Russia 129mt

4 USA 114mt

5 South Africa 77mt

6 Colombia 76mt

Canada shipped 37 million tonnes in 2012

Top coal importers 2012 (est.)

Rank Country Energy Steelmaking TOTAL

1 PR China 218 million tonnes 71mt 289mt

2 Japan 132mt 52mt 184mt

3 India 123mt 37mt 160mt

4 S. Korea 94mt 31mt 125mt

5 Taiwan 56mt 8mt 64mt

6 Germany 36mt 9mt 45mt

7 U.K. 40mt 5mt 45mt

-- World Coal Association

Supply constraints, boom and bust cycles have characterized coal markets in last decade

Coal market transformed post 2004

$0

$50

$100

$150

$200

$250

$300

$350

2000 2002 2004 2006 2008 2010 2012

US

$/t

HCC JFY reference SSCC SHCC ULV PCI Thermal

Low trade growth

Lack of supply investment

Emergence of China and India

Supply constraints

Volatility in coal prices

Mine margin growth

China

slowdown

Supply surge

-- Wood Mackenzie Coal Market Service

China, India leading the way

• Despite China’s rapid urbanization

over past decade (reaching 52.6% in

2012) it is still lower than USA,

Canada and Australia who

are above 80%.

• Currently, China’s urbanization rate

comparable to Japan’s in the 1950s.

• Previously, China was a drag on

Asia’s urbanization statistics. Today,

it is the driving force with room for

further urbanization.

Global urbanization: China leading Asia

Source: United Nations

16

Xinjiang

Tibet

Qinghai

Sichuan

Inner Mongolia

Henan

Shanxi

Guangxi Guandong

Fujian

Zhejiang

Jiangsu

Shandong

Laioning

Jilin

Heilongjiang

Guizhou Hunan

Hubei

Jiangxi

Anhui

Shaanxi Gansu

Ningxia

WISCO Fangchenggang Project 1st phase of 9.2Mt crude steel approved but not commenced yet. 200Kt bulk cargo discharging port will complete in 2013.

Bao Steel Zhanjiang Project 1st phase with capacity of 10Mt crude steel. #1BF started construction in May 2013 and to be completed by the end of 2015. #2BF to start construction in June 2014 and complete in Sept 2016.

Ningde Steel Base In proposal.

Relocating to China’s coastline improves access to seaborne raw materials

Qinghai

Sichuan

Yunnan

Beijing

Hebei 40%

45%

50%

55%

60%

65%

0

100

200

300

400

500

600

700

800

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Total Coastal provinces Coastal %

An Steel Baiyunquan Project Planned 13Mtpa steel capacity. Phase 1 (6.5Mt) finished in 2009. Phase 2 planned.

Capital Steel Caofeidian Project Planned 20Mtpa steel capacity. Phase 1 (10Mt) completed in 2010 and Phase 2 under preparation.

Shandong Steel Rizhao Project Planned 21.35Mt crude steel. Phase 1 (8.5Mt) approved in Feb 2013.

China’s steel industry: Moving to the Coast

Sources: NBS, CISA

India’s hot metal production An emerging powerhouse

Hot metal production in India is expected to grow by from 46Mt to 123Mt between 2013 and 2030

India overtook South Korea as the third largest importer of seaborne metallurgical coal in 2011

Seaborne imports are expected to increase from 35Mt to 86Mt between 2013 and 2030

17

India’s Hot Metal Capacity – Projects and Operations

Sources: WSA, Wood Mackenzie

Canadian steelmaking and energy coal exports expected to increase

Canada has high quality and well-known steelmaking coal brands

Reliable alternative supplier

Further foreign investment likely as Canadian Govt. seen as reliable partner

West Coast port capacities will grow

-- sources Wood Mackenzie & Tex Report

Global coal outlook

Canadian thermal and metallurgical coal exports expected to increase

0

10

20

30

40

50

60

70

80

2013 2015 2017 2019 2021 2023 2025

Mill

ion t

onnes

Therm Met

Though it has been delayed, Coalspur’s new Vista mine will

facilitate increased thermal coal exports

Steel makers in mature Asian countries have strong dependency on premium coking coals, making

Canada a logical supplier

Canadian coal exports 2013-2025 (Mt)

Revenues

Year $ million

2010 223.5

2011 212.8

2012 240.7

2013 (YTD June)

136.2

Profit from operating activities

Year $ million

2010 86.0

2011 97.8

2012 107.0

2013 (YTD June)

73.2

Average revenue

Year $ per tonne

2010 8.86

2011 7.39

2012 8.91

2013 (YTD June)

9.27

Glenn Dudar Bachelor Applied Science

(Electrical Engineering) UBC 1995

Electrical Engineer at Placer Dome Canada

Production Manager at Sifto Salt, Goderich ON., for 8 years

Joined Westshore as an Operations Superintendent, 2005

Promoted to Production Manager June, 2013

Production Manager

6th December, 2012

7th December, 2012

asegwsngb

The morning after

● Over 100 metres of causeway, trestle,

power, water and conveyor ripped out by an

errant dry bulk vessel around 1 a.m.

New rollers lighter and more efficient

Two months later

fgn

First ship

Back in service two months to the day –rebuild beat even the best estimates of our insurers insurers

Insurance claim $49 million Fully operational

Two major shutdowns in 2012

March-April transfer chute installation over 16 days/more than half the site idle for first time ever

Site shutdowns

Successful six-week shutdown from October 1:

- Replaced single dumper with new twin set; added exit and entry train positioners - Installed new chutes in three older stacker-reclaimers

Second shutdown

Environmental action

$8.5 million dust suppression upgrade completed in June

Environmental upgrade

94 new Nelson Big Guns replace old Rainbird ground-level sprays

Added nine more Big

Bertha water towers

Environmental upgrade

MAMUs now out in community

MOOG surveillance of coal train dusting underway

Enhanced treatment

Treated water will be used

again in ground level

sprays

Enhanced treatment

New $5.5 million

water recycling system

Sharing our message

Being proactive in the community

Further major capacity increase not economic – looking at optimizing existing site

Our future capacity

Reinvesting in the future

$230 million rejuvenation over 4 years

Project begins in 2014

Office relocation

Replacement of three aging stacker-reclaimers

Replacement of shiploader on Berth 1

Other conveyor improvements

Relocation of major shops, warehouse & offices 2014

Competitive environment

Up to six U.S. West Coast coal export terminals proposed – only 2 or 3 left

Westshore

Terminals

Thank you

Westshore Terminals

Appendix Coal’s other challenge

Investment in clean coal technologies

CCT & CCS 25% climate change answer

Global investment necessary to combat climate change

CCS seriously underfunded

Coal’s other challenge - to be appreciated

The 21st Century built on coal

Coal generates 41% of world’s electricity

Coal is used in production of 68% of world’s steel

Coal is poverty alleviation’s greatest hope

Investments in clean coal technologies

Supercritical

and ultra

supercritical

power plants

in operation

or under

construction

Source: IEA

Energy

Technology

Perspectives

2010

Contribution of different technologies to reductions in CO2 emissions of the power sector

In the power sector about 25% of the answer to climate change lies

in coal. Effective climate policies should not dismiss this potential.

CCT & CCS provide 25% of climate change answer

Global investments necessary to effectively combat climate change

…but in comparison to other low-carbon technologies CCS is seriously underfunded

Public funding on low carbon

• Nuclear:

$45 billion annually

• Renewables:

$27 billion annually

• CCS:

$12.2 billion since 2005

Public funding support commitments

to CCS demonstration