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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