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In 2012, we produced 24.7 million tonnes of steelmaking coal, the majority of which was shipped to the Asia-Pacific region. Our proven and probable reserves of more than 1 billion tonnes of coal position us to continue to meet global demand. In addition, our measured and indicated resources now total over 3.6 billion tonnes and our inferred resources over 2 billion tonnes of raw coal. 

Our current production capacity is approximately 27 million tonnes and is expected to grow to 28 million tonnes by the end of 2013. However, to align production rates with anticipated demand and to effectively manage inventories, we plan to produce 24.0 to 25.0 million tonnes of coal in 2013. 

With current expansion plans underway at our six producing mines and the potential restart of our Quintette mine, we expect to reach an annualized production rate above 30 million tonnes of coal per year by the end of 2014, subject to permitting and customer demand. 

In 2012, our coal business unit accounted for 45% of revenue and 51% of gross profit before depreciation and amortization. 

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## Operations 

Decreased gross profit before depreciation and amortization primarily reflects significantly lower coal prices, partially offset by higher production and sales volumes. The average realized selling price in 2012 decreased to US$193 per tonne, compared with US$257 per tonne in 2011 and US$181 per tonne in 2010. 

Gross profit declined in 2012, due primarily to lower coal prices and higher transportation costs. Transportation unit cost increases resulted from lower than planned shipping volumes, the use of additional terminals to supplement capacity during outages resulting from expansion programs or incidents at our traditional terminals, as well as from inflation and annual contractual rate adjustments with our rail and port service providers and higher than normal proportion of coal sold inclusive of ocean freight. These costs were partially offset by higher sales volumes and lower mine operating unit costs, which resulted from a successful cost reduction program initiated at all coal mines in August 2012. 

Coal sales volumes of 24.0 million tonnes increased 8% from 2011. 

