1. The Economic Importance of the Coal Industry in B.C. and Canada Michelle Mondeville Director of Communications and Stakeholder Relations, Coal Association of Canada

2. Canadian Coal Mines 2

3. Coal Production (2011) Almost 68 million tonnes of coal produced 27 million tonnes (40%) mined in B.C. 89% of Canadian MET coal production in B.C. 3 ProvinceMet. CoalThermal CoalTotal BC9110 AB279 Sask-33 NS-22 TOTALS111324

4. Production Volumes and Coal Prices 2011 was a historical milestone  total value of Cdn. coal production reached $7.0 billion  a three-fold increase from $1.6 billion in 2001  represented 22% of total B.C. exports  $1 billion in capital investment Prices for thermal and metallurgical coal increased at a strong pace between 2008-2011  annual average growth rate of 15% over past 10 years  depressed prices since  Longer term prospects promising again 4

5. 5 Coal Prices

6. Impact of Coal Production on Our Economy Coal industry contributed an estimated $5.2 billion to Canada’s GDP and $3.2 billion in B.C. Total Cdn. coal export sales reported at $8.0 billion  over $7.0 billion in B.C. Coal exports grew over 300% over the last decade  16% average annual growth rate 6

7. Impact of Coal Production on Our Economy 7 Canada the third largest exporter of MET coal after Australia and the U.S. Major buyers of Canadian coal:  Japan (27%)  South Korea (24%)  Europe (16%)  China (10%)

8. Employment Coal employment (direct and in-direct)  42,000 people across Canada  26,000 people in B.C. Many are highly skilled workers Average coal industry salaries over double the average national wage and amongst the highest in the mining sector Salary rates increased 37% over the past 10 years. 8

9. Government/Community Contributions Government Revenues  2011 tax payments made by the coal mining industry to all levels of government were $715.2 million  $399 million in tax revenue generated by economic activity  $316.2 million in mineral taxes paid to the B.C. Government  Payments to governments support public infrastructure, such as roads, hospitals, schools and programs, which contribute to our well being and quality of life Coal companies and employees also actively involved in contributing to local communities 9

10. PwC Reports…..Bottom Line Canada and B.C. would be disadvantaged financially and socially without the coal industry - all facets of the economy benefit from a thriving coal industry 10

11. What does the future hold for met coal? Global steel production has grown strongly since 2000 WCA predicts 3% growth in steel markets in 2013/4 A significant amount of steel is needed for the future. Emerging urbanizing economies will need steel for infrastructure, housing and transportation 11

12. What does the future hold for coal? 12 201020152020202520302035 China 150-300Mt India >400-600Mt Indonesia >100-150Mt Other Asia >80-150Mt Africa >>400Mt Other >100Mt “The path expected for emerging economies as they urbanise is likely to lead to a intensity per capita of around 350- 450kg as limitations on land require further increases in building height. Don’t forget China is not finished yet and India and others have not really started!” – Neil Bristow

13. Canadian Coal’s Strategic Advantage Canada outperforms peers on met coal margins Growing port capacities Proximity to fast growing Asian economies Reliable alternative to large Australian and Indonesian thermal coal suppliers 13

14. Canadian Coal’s Strategic Advantage (Ports) 14 Canadian port capacity and throughput (Mt)

15. 15 Canadian Coal Challenges

16. Criticisms of coal Myth: Coal isn’t safe  Fact: Thousands of people (mine workers to train operators to terminal operators) work at coal sites without issue Myth: Coal is toxic  Fact: Coal is not classed as a dangerous or hazardous material by Transport Canada. It’ s not on the International Agency for Research on Cancer’s list of carcinogenic agents. Nor is coal carcinogenic to humans Myth: Coal exacerbates climate change (and industry should be shut down)  Fact: Coal is critical for developing nations to rise out of poverty; to support economic development and growth 16

17. Coal is essential for developing nations 1.3 billion without electricity Coal – reliable energy where it is most needed India – 70% of electricity comes from coal 300 million in India have no electricity 17

18. Setting the Record Straight Coal Alliance Member  coordinated public and media outreach  web and social media  Website: coalalliance.ca Vote Mining: Raised the profile and importance of mining during the recent BC election  candidate outreach  Public education  web and social media 18

19. Conclusion Canada would be disadvantaged if we didn’t produce and sell our coal - from the contribution to GDP, trade balance, jobs and communities….coal positively impacts all facets of our economy and society Share your knowledge of the coal industry and the important contributions it makes locally and globally For more information:  Download our PwC Reports at www.coal.ca (see Resources)www.coal.ca  Follow us on Twitter  Attend our conference (Sept, 2014 in Vancouver) 19

20. Thank you! Michelle Mondeville Director of Communications and Stakeholder Relations Coal Association of Canada mondeville@coal.ca 780.993.6651 (cell) www.coal.ca 20