content_image/219695.jpg
## To the Shareholders 

## Letter from the CEO 

<img src='content_image/219695.jpg'>

It was 100 years ago, in 1913, that Teck-Hughes Gold Mines Ltd. was formed to develop a gold discovery on the shores of Kirkland Lake, Ontario. From those humble beginnings, Teck has evolved to become Canada’s largest diversified natural resource company. With 13 mines and one large metallurgical complex in Canada, the United States, Chile and Peru, and offices and exploration activities around the world, we celebrate our centennial year with a deep sense of pride in our past and confidence in our future. 

Throughout our company’s rich history, we have been supplying products the world needs to build a better quality of life for people around the globe. Today, while we continue to see volatility in the global economy, we remain committed to our core strategy of building long-life assets in stable jurisdictions. Our financial position is strong and the fundamentals that underpin demand for our products remain solid, making our long-term outlook bright. 

With a century of operating experience, we also know that responsible development is critical to our long-term success. We are focused on building strong relationships with communities, ensuring our people go home safe and healthy every day, and safeguarding the environment. We were pleased to be named to the Dow Jones Sustainability World Index for the third consecutive year. Our index score placed our sustainability performance in the top 2% of companies in the mining industry worldwide, with our environmental performance being ranked the highest in the sector. In January 2013, we were named the top-ranked Canadian company on the Global 100 Most Sustainable Corporations List, and were also the top-ranked global mining company. 

## Financial Performance and Operational Highlights 

I am pleased to report that we achieved record safety performance in 2012. Safety is a core value at Teck, and last year we recorded the lowest total reportable injury frequency in our history, representing a 9% improvement over the previous year and the fewest number of serious incidents on record. While our work is not done, this achievement reminds us that by focusing on health and safety, we can achieve our goal of operating without injuries. 

Our operating results in 2012 demonstrate the resiliency of our broadly diversified asset base and the benefits of our ability to expand production at key operations at relatively low capital cost. We achieved increased sales volume for steelmaking coal and copper compared to the previous year. Notably, we had record copper production in 2012 thanks to investments we have made at our Antamina, Carmen de Andacollo and Highland Valley Copper operations, and coal sales were our third-highest on record, despite challenging market conditions. In our energy business unit, we completed the purchase of SilverBirch Energy Corporation. This acquisition gives us full ownership of the Frontier project and provides us with an opportunity to explore new partnerships and other alternatives to move the project towards development. 

2012 was a year of global economic uncertainty, resulting in lower commodity prices, and our gross profit, before depreciation and amortization, was $4.0 billion in 2012 compared to the record $5.8 billion in 2011 and $4.4 billion in 2010. 

The 31% decrease compared to 2011 was primarily due to lower commodity prices, particularly coal, partly offset by higher sales volumes of both copper and coal. In 2012, we increased our annual dividend rate by 12.5% to $0.90 per share. Annual revenues in 2012 were $10.3 billion, down 10% from the previous year’s record revenues of $11.5 billion, again due mainly to lower commodity prices. 

