Transparency in all aspects of our performance — social, environmental and economic – is central to Teck’s values and an important part of our approach to responsible development. In this report and in our companion 2018 Annual Report, we detail Teck’s performance and how we are working to continually improve it.
The theme of our 2018 Sustainability and Annual Reports is Beyond. It’s about how our success hinges on our ability to look beyond the mine gate or office to the essential role we play in addressing the pressing challenges facing our world: climate change, water access and quality, and economic inequality, to name a few. The products of mining are foundational for our modern society, and providing these materials responsibly will contribute to a better world for everyone.
Societal expectations of responsible resource development are increasing, and we are responding. As an industry, we recognize that how we mine is now just as important as what we mine. That’s why at Teck we make sustainability a part of everything we do, because we know that responsible mining and mineral development are fundamental to our current and future success.
Looking at our financial and operating performance in 2018, we achieved revenues of $12.6 billion and cash flow from operations of $4.4 billion, thanks to solid operating results and strong steelmaking coal prices.
Mid-year, we completed commissioning at our Fort Hills oil sands mining and processing operation, a joint venture with Suncor Energy and Total E&P, with production reaching full capacity by the end of the year. Fort Hills will help to meet global energy demand responsibly. The carbon intensity of its product is lower than approximately half the oil currently refined in the United States, and is among the lowest of Canadian oil sands producers.
In August, we received regulatory approval for our Quebrada Blanca Phase 2 (QB2) project with a unanimous vote from Chilean authorities and, in December, our Board sanctioned the start of construction of QB2. Located in northern Chile, QB2 will provide significant economic and social benefits for the country and the region, and will help to meet growing global demand for copper.
In September and October, a joint federal-provincial public regulatory hearing was conducted for our Frontier oil sands project in Alberta. Our regulatory submission for Frontier was the most detailed and comprehensive in oil sands history, incorporating extensive environmental and social data, reflecting close to a decade of community engagement. In advance of the hearing, we entered into agreements covering all 14 Indigenous communities in the broader project area – a first for a major oil sands project at this stage.
In October, Dr. Norman B. Keevil, Chairman of the Board of Teck, retired from the role, with Dominic Barton, former Global Managing Partner of McKinsey & Company, stepping into the role of Chair. Over the course of a career that includes more than 50 years with Teck, Dr. Keevil has made enormous contributions to both Teck and the entire mining industry that will continue to benefit our company and communities for generations to come.
Safety is the first consideration in everything we do, and we are focused on continual improvement in our safety performance. In 2018, our High-Potential Incident Frequency was 28% lower than in 2017, and Total Recordable Injury Frequency remained the same as in 2017. Despite our progress, we were deeply saddened by two fatalities that took place this year, one at Fording River Operations and one at Elkview Operations. We have carried out in-depth investigations into the incidents to learn as much as possible and to implement measures to prevent reoccurrences. These fatalities are a powerful reminder that we must remain diligent in our efforts to achieve our vision of everyone going home safe and healthy every day.
Throughout the year, we were able to advance our work in sustainability while at the same time achieving strong operating and financial performance. Across our operations, we have reduced energy use by 2,220 terajoules and greenhouse gas emissions by 289,000 tonnes since 2011. We also improved the diversity of our workforce with women comprising 31% of total new hires. We continued to implement water quality improvement measures at our operations in the Elk Valley, and we recycled and reused water at our operations an average of three times.
Our social and environmental performance has been recognized once again by the Dow Jones Sustainability World Index, indicating that our sustainability practices are in the top 10% of the 2,500 largest companies in the S&P Global Broad Market Index for the ninth straight year. We were also named to the Global 100 Most Sustainable Corporations and the Best 50 Corporate Citizens in Canada by the Corporate Knights sustainability index.
Through our work with external partners, we are working to help solve global sustainability challenges. For example, in September, we committed $2.5 million to support life-saving zinc and oral rehydration salt treatments to save the lives of children in India in partnership with UNICEF. This investment builds upon the $5 million that Teck committed to UNICEF in 2013 through our Zinc & Health program, a program that has saved thousands of children’s lives to date.
The world around us is constantly evolving. Changing technologies, demographics, societal expectations and other factors are changing our business today and into the future. The most successful companies will be those that can best anticipate and adapt to these emerging trends. With that in mind, we are working to evaluate the most significant risks and opportunities facing us now and over the next two decades, and to set goals that will allow us to evolve our approach and meet these challenges head on. By doing so, we will be in the best possible position to successfully manage risks, turn opportunities into value and continue to provide the materials that build our world for decades to come.
Donald R. Lindsay
President and Chief Executive Officer
Vancouver, B.C., Canada
March 14, 2019