New Water Quality Measures in the Elk Valley

Teck Resources Limited today announced that Environment and Climate Change Canada has issued a Direction under the Fisheries Act (the “Direction”) to Teck Coal Limited (“Teck”), setting out measures to be taken to improve water quality and prevent calcite deposition in the Elk Valley in waters affected by Teck’s Fording River and Greenhills operations.

The measures set out in the Direction are complementary to measures already included in the Elk Water Quality Plan (“EVWQP”) being implemented by Teck. 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 geo-synthetic cover trial in the Greenhills creek drainage. The headwaters of Greenhills Creek have been identified as the location where a geo-synthetic cover over waste rock has the greatest technical potential as a source control measure. If the cover trial is successful, there may be potential for geo-synthetic covers to be deployed in a limited number of other specific settings in the Elk Valley to supplement other source control measures already under development.

Certain of the measures in the Direction, including the cover trial, will require incremental spending beyond that already associated with the EVWQP. The aggregate cost of those incremental measures, over an approximate 10-year period, is preliminarily estimated at approximately $350-400 million, with expected spending in 2021 of approximately $17 million. This cost estimate is based on limited engineering, and the feasibility of certain measures has not yet been confirmed. The results of environmental monitoring may dictate that certain of the measures do not need to be fully implemented, or that other measures will be required. The ultimate costs of these measures and other work required under the EVWQP may vary substantially from current estimates, either up or down. The issuance of the Direction does not resolve the potential charges under the Fisheries Act previously notified to Teck. Discussions with respect to those charges continue.

The Elkview Phase 2 Saturated Rock Fill and Fording River South Active Water Treatment Facility, both already under construction, are scheduled to come on stream in the fourth quarter of 2020 and first quarter of 2021, respectively. When operating at full capacity these two facilities will bring total water treatment capacity up to 47.5 million litres per day from the current capacity of 7.5 million litres per day, materially reducing selenium and nitrate loading in the Elk Valley watershed. The new measures required under the Direction, together with the existing treatment and mitigation steps under the EVWQP represent a thorough Federal and Provincial regulatory scheme to address water quality issues in the Elk Valley. Teck continues to invest in innovative technical solutions to address water quality issues and construction of additional treatment capacity. As well, further studies to better understand water quality, source control and treatment options are scheduled for 2021 and beyond.