<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>16
<FILENAME>ex99-3_form40f2008.txt
<DESCRIPTION>EXHIBIT 99.3
<TEXT>

                                                                    EXHIBIT 99.3
                                                                    ------------


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION
AND OPERATING RESULTS

The  management's  discussion and analysis of financial  position and operating
results is prepared as at March 4, 2009 and should be read in conjunction  with
our audited  consolidated  financial statements and the notes thereto as at and
for the year ended December 31, 2008. Unless the context otherwise dictates,  a
reference to Teck,  Teck Cominco,  the Company,  us, we or our,  refers to Teck
Cominco  Limited and its  subsidiaries  including  Teck Cominco  Metals Ltd.; a
reference to TCML refers to Teck Cominco Metals Ltd. and its subsidiaries;  and
a  reference  to Aur or Aur  Resources  refers to Aur  Resources  Inc.  and its
subsidiaries.  All dollar  amounts are in Canadian  dollars,  unless  otherwise
specified,  and are based on our  consolidated  financial  statements  that are
prepared in accordance with Canadian generally accepted  accounting  principles
(GAAP). The effect of significant  differences between Canadian and US GAAP are
disclosed  in  note  24  to  our  consolidated  financial  statements.  Certain
comparative  amounts  have been  reclassified  to conform  to the  presentation
adopted  for 2008.  In  addition,  in May 2007 our  Class A common  and Class B
subordinate  voting shares were split on a two-for-one  basis.  All comparative
figures related to outstanding  shares and per share amounts have been adjusted
to reflect the share split.

This  management  discussion  and  analysis  contains  certain  forward-looking
information and  forward-looking  statements.  You should review the cautionary
statement  on  forward-looking   information  under  the  caption  "Caution  on
Forward-Looking Information".

Additional  information about us, including our most recent annual  information
form,  is  available  free of charge on our  website  at  www.teck.com,  on the
Canadian Securities  Administrators'  website at www.sedar.com and on the EDGAR
section of the United States Securities and Exchange Commission's (SEC) website
at www.sec.gov.

BUSINESS UNIT RESULTS

The table below shows our share of production of our major  commodities for the
last five years and expected production for 2009.

FIVE-YEAR PRODUCTION RECORD AND 2009 PLAN (OUR PROPORTIONATE SHARE)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                              Units                                                                      2009
                                              (000's)      2004        2005         2006        2007        2008         Plan
------------------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>        <C>          <C>          <C>         <C>         <C>         <C>
Principal Products
  Copper contained in concentrate             tonnes        248         263          254         215         206          230
  Copper cathodes                             tonnes          -           -            -          37         107          100
                                                       -----------------------------------------------------------------------------
                                                            248         263          254         252         313          330
                                                       -----------------------------------------------------------------------------

  Metallurgical coal
    Direct share                              tonnes      9,277       9,948        8,657       9,024      11,282       20,000
    Indirect share                            tonnes      1,386       1,376        1,147       1,552       2,345            -
                                                       -----------------------------------------------------------------------------
                                                         10,663      11,324        9,804      10,576      13,627       20,000
                                                       -----------------------------------------------------------------------------

  Refined zinc                                tonnes        413         223          296         292         270          270
  Zinc contained in concentrate               tonnes        619         657          627         699         663          690

  Gold                                        ounces        261         245          263         285         279          160

Major by-Products
  Molybdenum contained in concentrate         pounds     11,631       9,482        7,929       7,133       7,119        8,500
  Refined lead                                tonnes         85          69           90          76          85           85
  Lead contained in concentrate               tonnes        119         110          129         146         133          125
===================================================================================================================================
</TABLE>

-------------------------------------------------------------------------------
                            Teck 2008 Management's Discussion and Analysis    1

<PAGE>

Notes to five-year production record and 2009 plan:

(1)   In August 2007, we acquired the Quebrada Blanca,  Andacollo and Duck Pond
      mines as a result  of our  acquisition  of Aur  Resources  Inc.  Quebrada
      Blanca and Andacollo  produce cathode  copper.  Duck Pond produces copper
      and zinc  concentrates.  In March 2004,  we increased our interest in the
      Highland  Valley  Copper mine from 63.9% to 97.5%.  We report 100% of the
      production of Quebrada Blanca and Andacollo, even though we own 76.5% and
      90%,  respectively of these operations because we fully consolidate their
      results in our financial statements.

(2)   The direct share of coal production  includes our proportionate  share of
      production  from the Teck Coal  Partnership  (formerly  Elk  Valley  Coal
      Partnership), which was 35% on February 28, 2003 and increased in various
      increments to 40% on April 1, 2006. Fording Canadian Coal Trust (Fording)
      owned the remaining  interest in the Teck Coal Partnership.  The indirect
      share of coal production was from our investment in units of Fording.  We
      owned approximately 9% of Fording from February 28, 2003 to September 27,
      2007 and on  September  27,  2007  increased  our  interest in Fording to
      19.95%. In October 2008, we acquired all of the assets of Fording,  which
      consisted primarily of its 60% interest in the Teck Coal Partnership.

(3)   In April 2007,  our Lennard  Shelf zinc mine and Pogo gold mine  achieved
      commercial  production.  The Lennard Shelf zinc mine ceased production in
      August 2008.

(4)   In 2005,  refined zinc and lead  production was affected by a three-month
      strike at our Trail metallurgical operation. In December 2004 we sold our
      Cajamarquilla zinc refinery.

(5)   Gold  production  for 2009  assumes  completion  of the sale of our Hemlo
      mines that was announced in February, 2009.

(6)   Asset sales and  financing  transactions  may affect our 2009  production
      plans and all 2009  production  estimates  are subject to change based on
      market conditions.


Our business is the  exploration  for and development and production of natural
resources. Through our interests in mining and processing operations in Canada,
the United States and South America we are an important  producer of copper and
the world's second largest zinc miner. We hold a 100% direct  ownership in Teck
Coal, the world's second largest producer of seaborne high quality coking coal.
Our principal  products are copper,  metallurgical  coal, zinc and gold.  Lead,
molybdenum,  various specialty and other metals,  chemicals and fertilizers are
by-products  produced at our operations.  We also sell electrical power that is
surplus to the requirements of our Trail metallurgical operations and own a 20%
interest in the Fort Hills oil sands  project  and a 50%  interest in other oil
sands leases in the Athabasca region of Alberta, Canada.

We manage our activities  along commodity lines and are organized into business
units as follows:

     COPPER       COAL        ZINC       GOLD       ENERGY       CORPORATE

Our energy business unit consists of our investments in our oil sands projects,
which are in various  stages of  exploration  and  development.  We continue to
regard  the Fort  Hills oil sands  project as an  attractive  long-term  asset.
However,  in light of the significant  cost of participation in a near-term oil
sands  project  at this  stage of the  business  and  commodity  cycle,  we are
exploring strategic  alternatives.  Our corporate business unit includes all of
our  activities in other  commodities,  our corporate  growth  initiatives  and
groups that provide administrative,  technical,  financial and other support to
all of our business units.

Average commodity prices and exchange rates for the past three years, which are
a key driver of our earnings, are summarized in the following table.

<TABLE>
<CAPTION>
                                                               US$                                        CDN$
====================================================================================================================================
                                                           %                 %                       %                  %
                                              2008       chg     2007      chg    2006    2008     chg     2007       chg     2006
------------------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>      <C>       <C>      <C>     <C>     <C>     <C>       <C>      <C>     <C>
Copper (LME Cash-$/pound)                     3.17       -2%     3.23      +6%    3.05    3.37      -3%     3.46        -    3.45
Molybdenum (Platts*-$/pound)                    29       -3%       30     +20%      25      31      -3%       32     +14%      28
Coal (realized-$/tonne)                        205     +109%       98     -13%     113     220    +110%      105     -20%     131
Zinc (LME Cash-$/pound)                       0.85      -42%     1.47      -1%    1.49    0.91     -42%     1.57      -7%    1.68
Lead (LME Cash-$/pound)                       0.95      -19%     1.17     +98%    0.59    1.01     -19%     1.25     +87%    0.67
Gold (LME PM Fix-$/ounce)                      872      +25%      697     +15%     604     931     +25%      746      +9%     683
Exchange rate (Bank of Canada)
    US$1 = CDN$                               1.07        -%     1.07      -5%    1.13
    CDN$1 = US$                               0.93        -%     0.93      +6%    0.88
====================================================================================================================================
</TABLE>
* Published major supplier selling price in Platts Metals Week.


-------------------------------------------------------------------------------
2    Teck 2008 Management's Discussion and Analysis

<PAGE>

Our revenue and  operating  profit  before  depreciation  and  amortization  by
business unit is summarized in the following table.

<TABLE>
<CAPTION>
====================================================================================================================================
                                                                Revenues                    Operating Profit before Depreciation
                                                                                                     and Amortization *
------------------------------------------------------------------------------------------------------------------------------------
($ in millions)                                         2008          2007          2006          2008          2007          2006
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>           <C>           <C>           <C>           <C>           <C>
Copper                                               $ 2,156       $ 2,186       $ 2,220       $ 1,146       $ 1,459       $ 1,697
Coal                                                   2,428           951         1,177         1,226           249           483
Zinc                                                   2,071         3,052         2,999           439         1,328         1,614
Gold                                                     249           182           143            84            35            31
------------------------------------------------------------------------------------------------------------------------------------
Total                                                $ 6,904       $ 6,371       $ 6,539       $ 2,895       $ 3,071       $ 3,825
====================================================================================================================================
</TABLE>

*    Operating  profit  before  depreciation  and  amortization  is a  non-GAAP
     financial  measure.  See USE OF NON-GAAP  FINANCIAL  MEASURES  section for
     further information.

COPPER

2008 PRODUCTION: 313,000 TONNES

In 2008, we produced copper  concentrates at Highland Valley Copper,  Duck Pond
and at Antamina, in which we have a joint-venture interest. Our Quebrada Blanca
and Carmen de Andacollo  mines in Chile  produce  cathode  copper.  Significant
by-product  zinc was produced in  concentrates  at both Duck Pond and Antamina,
and  by-product  molybdenum  in  concentrates  at  Highland  Valley  Copper and
Antamina.

During the year, we acquired the Relincho  copper  project in Chile through our
acquisition  of Global  Copper Corp.  We also  advanced  low-risk,  high return
capital  projects  that  will  increase  production  or mine  life at Carmen de
Andacollo  and  Highland  Valley  Copper,   and  completed  an  estimate  of  a
significant inferred resource at Quebrada Blanca.

Copper Production           Average Copper Price             Operating Profit
(000 tonnes)                       ($/lb)                    ($ in millions)*

[GRAPHIC OMITTED]           [GRAPHIC OMITTED]                [GRAPHIC OMITTED]

                               Copper Production
                                 (000 tonnes)
                               -----------------

                             2004       2005       2006       2007       2008
------------------------------------------------------------------------------
Contained in concentrate     247.6       263        254        215        206
Cathodes                                                        37        107

                              Average Copper Price
                                    ($/lb)
                              -------------------


                             2004       2005       2006       2007       2008
------------------------------------------------------------------------------
US Dollars                   1.35       1.67       3.05       3.23       3.17
Canadian Dollars             1.76       2.02       3.45       3.46       3.37

                                Operating Profit
                               ($ in millions)*
                               ----------------

                             2004       2005      2006        2007       2008
------------------------------------------------------------------------------
Contained in concentrate      730       1110      1697        1459       1146

*  Before depreciation and amortization


In 2008, our copper operations  accounted for 31% of our revenue and 40% of our
operating profit before depreciation and amortization.

<TABLE>
<CAPTION>
====================================================================================================================================
                                                                                           Operating Profit Before Depreciation and
                                                                 Revenues                                Amortization
------------------------------------------------------------------------------------------------------------------------------------
($ in millions)                                           2008          2007         2006           2008          2007          2006
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>          <C>          <C>              <C>          <C>          <C>
Highland Valley Copper                                  $  789       $ 1,115      $ 1,413          $ 426        $  776       $ 1,065
Antamina                                                   569           775          807            368           597           632
Quebrada Blanca                                            574           215            -            267            71             -
Andacollo                                                  142            46            -             72             9             -
Duck Pond                                                   82            35            -             13             6             -
------------------------------------------------------------------------------------------------------------------------------------
Total                                                  $ 2,156       $ 2,186      $ 2,220         $1,146        $1,459       $ 1,697
====================================================================================================================================
</TABLE>

-------------------------------------------------------------------------------
                            Teck 2008 Management's Discussion and Analysis    3

<PAGE>

<TABLE>
<CAPTION>
====================================================================================================================================
                                                                Production                                   Sales
------------------------------------------------------------------------------------------------------------------------------------
(000's tonnes)                                            2008          2007         2006           2008          2007          2006
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>           <C>          <C>            <C>           <C>           <C>
Highland Valley Copper                                     116           136          167            119           137           180
Antamina                                                    77            74           87             76            74            87
Quebrada Blanca                                             86            30            -             85            32             -
Andacollo                                                   21             7            -             21             7             -
Duck Pond                                                   13             5            -             13             5             -
------------------------------------------------------------------------------------------------------------------------------------
Total                                                      313           252          254            314           255           267
====================================================================================================================================
</TABLE>

MARKETS

Copper

While most base  metal  prices  peaked in 2007 and have since been in  decline,
copper  prices  peaked in July 2008 at an all time high of  US$4.07  per pound.
However,  during the last half of the year the price fell 69%,  resulting in an
average  annual  price of US$3.17 per pound in 2008.  This was slightly off the
2007 average of US$3.23 per pound.

In China, apparent annual consumption,  as reported by the International Copper
Study  Group  (ICSG),  was up 13%,  lower than their 2007  growth of 26%.  Weak
demand early in 2008 in Europe,  the United States and Japan  accelerated  as a
lack of confidence in global financial markets caused a pull back in investment
and spending around the world.

Copper  mine  supply was again  affected by large  unexpected  mine  production
losses.  In 2007,  global copper mine production losses from plan totalled over
1.0 million  tonnes of  contained  copper due to lower  grade ores,  labour and
weather  disruptions,  and  equipment  problems.  In  2008,  we  believe  these
disruptions   totalled  close  to  1.3  million  tonnes  of  contained  copper.
Announcements  of  economic  and  grade-related  production  cuts  for 2009 are
already more than 1.2 million tonnes of contained copper.

Copper  stocks on the London  Metals  Exchange  (LME) fell in the first half of
2008 by 40% to just over  100,000  tonnes.  Since the middle of July 2008,  LME
stocks nearly tripled to 340,000  tonnes,  the highest levels since early 2004.
Copper stocks on Shanghai Futures Exchange increased early in the year, up over
180%,  to a high of 68,000  tonnes,  but by the end of the year,  stood at only
18,000  tonnes.  At the end of 2008,  total global stocks were up 90,000 tonnes
compared to 2007, year end. Total global stocks (producer,  consumer,  merchant
and  terminal  stocks)  stood at 30 days of global  consumption  while  25-year
average levels are estimated at 32 days of global consumption.


COPPER PRICE AND
  LME INVENTORY            GLOBAL DEMAND FOR COPPER      REPORTED COPPER STOCKS

[GRAPHIC OMITTED]             [GRAPHIC OMITTED]            [GRAPHIC OMITTED]


                        Copper Price and LME Inventory
                        ------------------------------

                                 US$/pound   Tonnes (000's)
                  -----------------------------------------
                    Jan-04          1.10          363.6
                    Feb-04          1.25          285.2
                    Mar-04          1.36          189.2
                    Apr-04          1.34          152.7
                    May-04          1.24          133.9
                    Jun-04          1.22          104.6
                    Jul-04          1.27           88.5
                    Aug-04          1.29          105.0
                    Sep-04          1.31           93.6
                    Oct-04          1.37           78.9
                    Nov-04          1.42           60.0
                    Dec-04          1.43           48.9
                    Jan-05          1.44           45.7
                    Feb-05          1.48           54.0
                    Mar-05          1.53           44.8
                    Apr-05          1.54           60.0
                    May-05          1.47           45.2
                    Jun-05          1.60           29.5
                    Jul-05          1.64           30.9
                    Aug-05          1.72           65.7
                    Sep-05          1.75           83.3
                    Oct-05          1.84           62.6
                    Nov-05          1.94           71.2
                    Dec-05          2.08           89.6
                    Jan-06          2.15           97.6
                    Feb-06          2.26          108.9
                    Mar-06          2.31          121.9
                    Apr-06          2.90          117.7
                    May-06          3.65          112.2
                    Jun-06          3.26           93.6
                    Jul-06          3.50           97.5
                    Aug-06          3.49          125.4
                    Sep-06          3.45          117.6
                    Oct-06          3.40          130.5
                    Nov-06          3.19          155.4
                    Dec-06          3.03          182.8
                    Jan-07          2.57          211.8
                    Feb-07          2.57          208.0
                    Mar-07          2.93          178.1
                    Apr-07          3.52          157.2
                    May-07          3.48          128.9
                    Jun-07          3.39          114.7
                    Jul-07          3.62          101.8
                    Aug-07          3.41          139.1
                    Sep-07          3.47          130.8
                    Oct-07          3.63          167.0
                    Nov-07          3.16          189.2
                    Dec-07          2.99          197.5
                    Jan-08          3.20          178.8
                    Feb-08          3.58          143.7
                    Mar-08          3.83          112.5
                    Apr-08          3.94          110.5
                    May-08          3.80          125.0
                    Jun-08          3.75          122.6
                    Jul-08          3.82          142.4
                    Aug-08          3.46          204.0
                    Sep-08          3.17          198.6
                    Oct-08          2.23          230.7
                    Nov-08          1.68          291.7
                    Dec-08          1.39          339.8

                           Global Demand for Copper
                           ------------------------

                              Rest of the World              China
           -----------------------------------------------------------
           1982                     8.649                    0.380
           1983                     8.723                    0.380
           1984                     9.543                    0.390
           1985                     9.295                    0.420
           1986                     9.625                    0.450
           1987                     9.944                    0.470
           1988                    10.010                    0.465
           1989                    10.359                    0.528
           1990                    10.360                    0.512
           1991                    10.182                    0.590
           1992                    10.100                    0.911
           1993                    10.051                    0.984
           1994                    10.756                    0.798
           1995                    10.894                    1.152
           1996                    11.306                    1.276
           1997                    11.815                    1.269
           1998                    12.046                    1.422
           1999                    12.764                    1.506
           2000                    13.253                    1.877
           2001                    12.546                    2.357
           2002                    12.382                    2.775
           2003                    12.624                    3.097
           2004                    13.463                    3.565
           2005                    13.120                    3.815
           2006                    13.547                    3.967
           2007                    13.248                    4.600
           2008                    13.278                    4.807

                            Reported Copper Stocks
                            ----------------------

                         Tonnes            Days           25 yr average
      -------------------------------------------------------------------
      2004                884               19               32
      2005                860               19               32
      2006               1119               24               32
      2007               1421               29               32
      2008               1479               30               32



Continued  increases  in China's  smelting  capacity  pushed the global  copper
concentrate market further into deficit.  Although a surplus of copper metal is
expected in the global  marketplace in 2009, a continuation  of mine production
disruptions could again push the metal market into deficit.

MOLYBDENUM

Molybdenum  prices  averaged  US$29 per pound in 2008,  slightly  lower than in
2007.  Molybdenum  prices  started the year at US$32.50  per pound and remained
between  US$30 and US$33 per pound until the end of October when within a month
they dropped by 70% to US$9 per pound.

-------------------------------------------------------------------------------
4    Teck 2008 Management's Discussion and Analysis

<PAGE>

Chinese exports remained  restricted as quotas were again reduced.  Global mine
production  was estimated to be below demand in 2008, and proposed new projects
were not due into the market until at least late 2009.  Many of these  projects
have now been deferred or delayed.

In late  September,  a global  decline in the demand  for steel  resulted  in a
dramatic and swift series of  production  cuts  designed to offset rising steel
inventories. These production cuts resulted in the deferral and cancellation of
many supply contracts to the steel industry. Although molybdenum was one of the
last  inputs  affected,   the  rapid  liquidation  of  high  priced  molybdenum
inventories caused the most significant decline of any metal in 2008.

With molybdenum  prices trading below US$10 per pound going into 2009,  several
major  projects  have  announced  economic  delays  and  deferrals.  Junior and
developing  primary  molybdenum  miners are now finding it  difficult  to raise
necessary  financing.  The  lack  of  investment  in new  projects  could  have
long-term effects on supply when demand recovers.


OPERATIONS

Highland Valley Copper Mine

We have a 97.5% interest in Highland  Valley  Copper,  located in south central
British  Columbia.  Operating  profit before  depreciation and amortization was
$426  million in 2008  compared  with $776  million in 2007 and $1.1 billion in
2006. The reduction in Highland  Valley's 2008 operating  profit was due mainly
to a 13% decrease in copper sales volumes driven by the lower production levels
and negative pricing adjustments of $185 million compared with positive pricing
adjustments of $18 million in 2007.

Highland  Valley  Copper is  executing a  two-phase  mine life  extension  that
requires  push backs of the east and west walls of the Valley  pit,  which will
facilitate  mining until 2019.  East wall  stripping will be completed in 2009,
enabling mining to 2013 with average production of 125,000 tonnes of copper per
year.  West wall  stripping  will start in late 2009,  although the majority of
west wall stripping originally planned for 2009 has been deferred to 2010. West
wall stripping is scheduled for completion in 2013. Mining equipment, including
two shovels,  eight haul trucks, a production loader, and several large support
equipment  units were added to the mine's fleet in 2008,  properly  positioning
Highland Valley to execute the life of mine plan extension requirements.

Highland  Valley's 2008 copper  production  was 119,300  tonnes,  which was 14%
lower than in 2007.  The lower  production  was due to a higher  proportion  of
material in the feed from the Lornex pit and the mill  processed  lower  grade,
softer ore in 2008 at lower  recoveries.  Molybdenum  production  was  slightly
higher than 2007 levels at 4.2 million pounds.

During the first half of 2009,  Highland  Valley Copper will continue to draw a
large  proportion of  clay-bearing  ore from the Lornex pit and  recoveries are
expected to remain  similar to 2008 levels.  Recoveries are expected to improve
to between  86% and 88% in the second  half of the year,  together  with higher
copper  grades.  Highland  Valley's  production in 2009 is estimated at 130,000
tonnes of copper and 6.5 million pounds of molybdenum.

Antamina Mine

We have a 22.5%  interest in the Antamina mine, a large copper and zinc mine at
high  elevation in Peru.  Our partners are BHP Billiton  (33.75%),  Xstrata plc
(33.75%) and Mitsubishi Corporation (10%). Our share of operating profit before
depreciation  and  amortization  was $368  million in 2008  compared  with $597
million in 2007 and $632  million in 2006.  The  reduction in  Antamina's  2008
operating  profit  compared with 2007 was due mainly to lower average  realized
metal prices, and higher operating and distribution costs.

Antamina's  copper  production in 2008 was 343,700 tonnes, or 4% higher than in
2007. Zinc production increased by 19% to 347,800 tonnes in 2008 as a result of
higher ore grades and the processing of a greater amount of copper-zinc ores in
the year.  Molybdenum production totalled 13.4 million pounds, 5% lower than in
2007. Ore throughput was affected by a winding  failure in the Semi  Autogenous
Grinding  (SAG) mill motor in late 2007 and early in 2008,  requiring mill down
time and reduced milling rates throughout the year.

-------------------------------------------------------------------------------
                            Teck 2008 Management's Discussion and Analysis    5

<PAGE>

Antamina  engaged in several  major  projects  during 2008,  including  further
raising  of the  tailings  dam,  finalization  and  commissioning  of a  pebble
crushing circuit,  commencement of new camp facilities, and the pre-feasibility
study of a significant expansion of milling and flotation capacity.  Antamina's
production in 2009 is expected to be 335,000  tonnes of copper,  400,000 tonnes
of zinc and 9 million pounds of molybdenum.

Work will continue on a SAG mill by-pass that will allow continued operation of
the ore  processing  circuit  during repair and  replacement  of SAG mill motor
components,  and the potential  expansion  project will be  progressed  through
further study and engineering design.

Quebrada Blanca Mine

Quebrada Blanca is located in northern Chile,  240 kilometres  southeast of the
City of Iquique,  at 4,400 metres  elevation.  We own 76.5% of Quebrada Blanca.
Our partners are Inversiones  Mineras S.A. (IMSA) 13.5% and Empresa Nacional de
Minera  (ENAMI) 10%. The  operation  mines ore from an open pit and leaches the
ore to produce  copper  cathodes  via a  conventional  solvent  extraction  and
electro-winning  processes  (SX-EW).  Plant capacity is 85,000 tonnes per year.
Operating profit before  depreciation and amortization was $267 million in 2008
compared  with  $71  million  in 2007  when  operating  results  reflected  our
ownership  from late August 2007. In addition,  we also recorded a $149 million
impairment charge against the goodwill allocated to Quebrada Blanca as a result
of the decline in copper prices.

The  Quebrada  Blanca  supergene  ore body has a mine life to 2014 with cathode
production  continuing until 2016.  Production from Quebrada Blanca in 2008 was
85,400 tonnes  representing  a new  production  record.  Similar  production is
expected for 2009.

Approximately  30,000 metres of in-fill drilling was completed to better define
the hypogene  resources  below the existing  supergene  pit. In March 2008,  we
announced a new 1.03 billion tonne  inferred  resource  grading 0.5% copper and
0.020%  molybdenum,  representing 11 billion pounds of contained copper and 450
million pounds of contained molybdenum.

A scoping study was commenced to evaluate development alternatives for a future
concentrator to exploit the hypogene  resource.  This work includes  evaluating
alternative  plant site  locations,  water supply  alternatives,  power supply,
concentrate  pipeline  routes and  potential  port sites.  The scoping study is
expected to be  completed  at the end of the first  quarter of 2009.  A limited
program including additional drilling and metallurgical  testing is planned for
2009.  As part of our capital  spending  reductions  for 2009, we have deferred
further work on the study for the potential hypogene project.

Carmen De Andacollo Mine

We have a 90%  interest  in Carmen de  Andacollo  mine in  Chile,  located  350
kilometres north of Santiago,  with the remaining 10% owned by ENAMI. Operating
profit before  depreciation  and  amortization was $72 million in 2008 compared
with $9 million in 2007 when  operating  results  reflected our ownership  from
late August 2007.  In  addition,  we also  recorded a $186  million  impairment
charge against the goodwill allocated to Carmen de Andacollo as a result of the
decline in copper prices.

Carmen de  Andacollo  was  awarded  the John T. Ryan  award in 2008 for  safety
performance  in 2007.  At the end of 2008,  the mine had  recorded  three years
without a lost-time accident.

Carmen de Andacollo  produced  21,100 tonnes of copper  cathode in 2008,  while
sales  volumes  were  similar  at 20,900  tonnes.  The  mine's  cathode  copper
production for 2009 is estimated at 17,000 tonnes.

The  development  of Carmen de Andacollo's  concentrate  project is progressing
according to plan. The  development  consists of the  construction  of a 55,000
tonne per day  concentrator  and  tailings  facility and is expected to produce
76,000  tonnes  (168  million  pounds) of copper  and 53,000  ounces of gold in
concentrate  annually,  on average, over the first 10 years of the project. The
capital  cost  forecast  for the  project  is US$410  million  using US$1 = 535
Chilean  pesos  exchange  rate,  of which  US$249  million  has been spent from
inception to December 31, 2008. The project is expected to be  commissioned  in
the fourth quarter of 2009 and achieve commercial  production in the first half
of 2010.

-------------------------------------------------------------------------------
6    Teck 2008 Management's Discussion and Analysis
<PAGE>

Duck Pond Operations

The Duck Pond  copper-zinc  operation  is located in central  Newfoundland  and
achieved  commercial  production in April 2007.  Duck Pond's  operating  profit
before  depreciation  and amortization was $13 million in 2008 compared with $6
million in 2007 when operating results reflected our ownership from late August
2007.  In  addition,  we also  recorded an  impairment  charge of $116  million
against  Duck Pond and wrote off $10  million  of  goodwill  as a result of the
decline in copper and zinc prices and the mine's short life.

Copper  production  was 12,800 tonnes while zinc  production was 19,000 tonnes.
Mill throughput and recovery targets were not achieved due to lack of available
ore feed from the underground  workings.  Production was also affected by lower
than planned feed grades due to dilution.

Development of the lower ore zones is expected to be complete by the end of the
second quarter of 2009, which will allow access to new production  areas.  Duck
Pond's  production  in 2009 is estimated at 17,000  tonnes of copper and 25,000
tonnes of zinc in concentrate.

TECHNOLOGY

Cominco Engineering Services Ltd. (Cesl)

Our  proprietary  hydrometallurgical  technology  has been  developed over many
years by CESL to  provide  an  environmentally  superior  method  for  treating
copper,  copper-gold and nickel-copper  concentrates,  particularly  those that
present  challenges  to  conventional  smelting due to their  composition.  Our
efforts are focused on the final  commissioning and start-up of the Vale 10,000
tonne per year copper plant in Carajas, Brazil, and the development and testing
of an appropriate flow sheet to process a bulk  copper-nickel  concentrate from
Mesaba in northern Minnesota. We continue to make process improvements,  and to
pursue  internal and third party  opportunities  where the CESL process and the
expertise  of  our  staff  can  offer  economic  solutions  for  projects  with
challenging metallurgical issues or other logistical problems.

EXPLORATION AND DEVELOPMENT

Chile,  Turkey,  Canada, the United States,  Mexico,  Peru, Brazil,  Argentina,
Australia and Namibia were the main jurisdictions for porphyry copper, porphyry
copper-gold,  sediment hosted copper, and iron oxide copper-gold exploration in
2008.  Approximately  $78 million in project  costs were incurred on our copper
projects in 2008.  Expenditures  on copper  exploration  will be  significantly
reduced in 2009 with the main focus on Chile.

Galore Creek Project

In August 2007, we formed a 50/50  partnership with NovaGold  Resources Inc. to
develop the Galore Creek  copper-gold  deposit in northwest  British  Columbia.
After  suspending  construction  activities  in November 2007 due to escalating
cost estimates and reduced  operating  margins,  studies were initiated in 2008
aimed at re-evaluating  and optimizing the project by defining a more realistic
and lower risk  development  alternative.  Alternative  plant site and tailings
locations were evaluated.

In February 2009, we amended certain  provisions of the  partnership  agreement
relating  to the  Galore  Creek  Project.  Under  the  amended  agreement,  our
remaining  committed  funding on Galore Creek has been reduced to approximately
$36 million,  which must be  contributed  by December  31,  2012.  While we are
making these  committed  contributions,  which will  represent  100% of project
funding,  we will have a casting vote on the Galore Creek management  committee
with respect to the timing and nature of expenses to be funded. The new funding
arrangements  replace the arrangements agreed by to us and NovaGold in November
2007,  pursuant to which we had committed to spend an additional $72 million on
studies to reassess the Galore Creek  Project,  of which $15.8 million had been
spent to December 31, 2008,  in addition to our share of other  project  costs.
The project remains on care and maintenance.

-------------------------------------------------------------------------------
                            Teck 2008 Management's Discussion and Analysis    7
<PAGE>

Relincho Project

The Relincho copper project, located in central Chile, was acquired from Global
Copper Corp. in August 2008. A total of 49,100  metres of in-fill  drilling was
completed on the property in 2008.  In the third  quarter,  a scoping study was
initiated  to  investigate  various  development   alternatives,   to  identify
potential  power and water  sources,  and to  consider  access and  concentrate
transport aspects.  The scoping study is expected to be completed at the end of
the first quarter of 2009.

Mesaba Project

A variety  of work was  carried  out on the  Mesaba  copper-nickel  project  in
northern  Minnesota  in 2008. A total of 13,900  metres of resource  definition
drilling  was  completed  in 2008.  Drilling  was also  carried  out to provide
material for a bulk sample.  This sample was treated at a research  facility in
Minnesota  to  produce  nine  tonnes  of  copper-nickel  concentrate  which was
delivered to our CESL test facility. This sample is being processed through the
hydrometallurgical  pilot plant at CESL to assess the  feasibility of treatment
for the production of copper and nickel.

Carrapateena Project

A preliminary scoping study was carried out to assess the potential development
of an  underground  copper-gold  mine at the  Carrapateena  property  in  South
Australia.  Drilling on the project was completed in February  2008. A resource
update was completed in the fall.  The  mineralized  zone occurs at depths from
500 to 1,000 metres which precludes open pit mining.  Preliminary metallurgical
test work,  environmental  baseline  studies  and capital  and  operating  cost
estimates were carried out as part of the study.

We have the right to  acquire  100% of the  project  by making a payment to the
vendor equal to 66% of its fair market  value with credit for our  expenditures
on the project to date.  We are in  discussions  with the vendor  regarding the
exercise of our option.

Petaquilla

In March  2008,  we  exercised  our right to acquire a 26%  interest  in Minera
Petaquilla  S.A.  (MPSA),  the  Panamanian  company  that holds the  Petaquilla
concession, by committing to participate in development work plans and budgets.
We agreed  with Inmet  Mining  Corporation  (Inmet),  which  holds a 48% equity
interest in MPSA, on an interim basis,  that Inmet would act as the operator of
the project and would fund project expenditures on our behalf.

In 2008,  Inmet  acquired all of the  outstanding  common  shares of Petaquilla
Copper Ltd.,  which owns a 26% interest in MPSA.  As part of our plan to reduce
our debt,  we  withdrew  from the  Petaquilla  project in  accordance  with the
arrangements  between  us and  Inmet  and  therefore  have no  further  funding
obligations in respect of this project.  As a result, we recorded an impairment
charge of $22 million in the fourth quarter of 2008.

COAL

2008 PRODUCTION: 23 MILLION TONNES (100% BASIS)

Through October 29, 2008, our coal business  included a 52% direct and indirect
interest  in  the  Teck  Coal   Partnership   (formerly  the  Elk  Valley  Coal
Partnership).  We increased our ownership to 100%,  effective October 30, 2008,
with the purchase of the assets of Fording Canadian Coal Trust.

Teck Coal operates five metallurgical coal mines in British Columbia and one in
Alberta. Together, these mines represent the world's second largest exporter of
seaborne hard coking coal, substantially all of which is used in the production
of steel.

-------------------------------------------------------------------------------
8    Teck 2008 Management's Discussion and Analysis
<PAGE>

In 2008, our coal operations  accounted for 35% of revenue and 42% of operating
profit before depreciation and amortization.

<TABLE>
<CAPTION>
===================================================================================================================================
($ in millions)                                                                           2008               2007               2006
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                    <C>                  <C>              <C>
Revenues                                                                               $   2,428            $   951          $ 1,177
Operating profit before depreciation and amortization                                  $   1,226            $   249          $   483
Capital expenditures                                                                   $     118            $    35          $    18

Production volumes-100% basis (000's tonnes)                                              23,009             22,561           21,790
Sales volumes-100% basis (000's tonnes)                                                   22,978             22,677           22,614
===================================================================================================================================
</TABLE>

MARKETS

High quality hard coking coal was in strong demand from integrated  steel mills
at the beginning of 2008.  High steel prices and production  levels were driven
largely by the construction boom in China and other developing  nations,  while
the steel  industry  was running at full  capacity in the mature  economies  of
Western Europe and the United States.

Concurrently,  the supply of high  quality  hard  coking  coal,  which had been
failing  to keep pace with  demand by the  second  half of 2007 due to mine and
infrastructure  capacity  constraints,  was  disrupted  by severe  flooding  in
Australia in January  2008.  The  confluence  of strong  demand and  diminished
supply  resulted in the  tripling of coal price  settlements  for the 2008 coal
year,  which  runs  April 1,  2008  through  March 31,  2009.  At the time coal
settlements were completed, our average contracted US dollar coal price for the
2008 coal year was expected to be US$275 per tonne.

During 2008,  the financial  crisis and resulting  loss of consumer  confidence
worldwide  affected the mainstream  economy and caused a sudden reversal in the
steel markets.  By the end of 2008, most  integrated  steel mills were reducing
their  production  levels and raw  material  consumption  in  response to fewer
orders  and lower  steel  prices.  With the  large  Australian  coal  producers
generally  having  recovered  from the flooding early in the year, the seaborne
metallurgical  coal  market  ended  2008 in a  state  of  oversupply.  Recently
announced production cuts by metallurgical coal producers are expected to bring
production levels closer to demand in the near term.

As steel  production  was  curtailed and the steel mills were faced with excess
raw material stockpiles, they began to defer coal shipments on short notice. We
responded  by  replacing a portion of these  sales  through the sale of thermal
coal under market tenders at  then-prevailing  spot prices.  Accordingly,  coal
sales volume of 23 million  tonnes was at the low end of our guidance range and
our average selling price of US$205 per tonne for calendar year 2008 was at the
top end of our guidance range.

Our US dollar coal prices and volumes for the 2008 coal year remain fixed under
contract through March 31, 2009.  However,  our customers largely determine the
timing of  deliveries  and it is not  uncommon  for coal  sales  volumes  to be
carried over and delivered in the following coal year. A significant  amount of
carryover  tonnage is  anticipated  at the end of the 2008 coal year due to the
reduction in coal  shipments  in late 2008 and  anticipated  shipments  through
early 2009. Contract  negotiations for the 2009 coal year, which may impact the
pricing  on the  remaining  2008  coal  year  carryover  tonnage,  have not yet
concluded.  Current  market  sentiment  indicates  that US dollar  prices  will
decrease  substantially  for the 2009 coal year. The tonnage levels  contracted
for 2009 will also be impacted by the expected  lower steel  production and the
duration of the global economic downturn.

It is  anticipated  that the global steel and  metallurgical  coal markets will
continue  to  experience  extreme  volatility  in the coming  years.  The rapid
urbanization  and  industrialization  of the developing  nations is expected to
continue, which should drive demand for steel and high quality hard coking coal
once the current economic crisis passes. The development of new sources of high
quality  hard  coking coal is expected to slow in the near term due to the lack
of  available  investment  capital  and lower coal  prices,  which will  likely
contribute  to  imbalances  in supply  and demand in the  future.  Furthermore,
metallurgical  coal  suppliers  now  appear to be  responding  more  quickly to
situations of oversupply with production  cuts,  which should result in shorter
pricing downturns than were experienced in the past.

-------------------------------------------------------------------------------
                            Teck 2008 Management's Discussion and Analysis    9
<PAGE>

OPERATIONS

Coal sales  volumes  of 23 million  tonnes  increased  marginally  from 2007 as
continuing strong demand and fewer weather-related disruptions during the first
three quarters of 2008 were offset by a marked  reduction in deliveries in late
2008 as our  customers  took less coal in response  to lower steel  production.
Average US dollar coal prices for the 2008  calendar year doubled to US$205 per
tonne due to the very high-price  settlements for the 2008 coal year that began
April 1, partially  offset by the carry over of  approximately 3 million tonnes
of 2007 coal year  business  and some  incremental  thermal  coal sales made at
prevailing  spot prices in late 2008.  Average  realized  Canadian  dollar coal
prices  also  more  than  doubled  to $220  per  tonne  in 2008 as the  average
US/Canadian dollar exchange rate was similar year-over-year.

Teck Coal's  operating  profit before  depreciation  and  amortization was $1.2
billion  in  2008,  up  significantly  from  $249  million  in 2007  due to the
substantial  increase in the coal price and our  acquisition  of Fording's  60%
interest in Teck Coal in October  2008 that  provided  ten months of  operating
profit at the 40% ownership  level and two months at 100% compared with 40% for
all of 2007.  This was  partially  offset by the effect of higher strip ratios,
increases in labour, fuel and other input costs and higher port loading charges
at  Westshore  Terminals,  which are  variable in part with  average coal sales
prices.  In addition,  contractual  rail rates were higher for  eastbound  coal
shipments, which represent approximately 10% of our sales volumes.

ZINC

2008 PRODUCTION:           663,000 TONNES OF ZINC IN CONCENTRATE
                           270,000 TONNES OF REFINED ZINC

Our zinc business unit includes our Trail  refining and smelting  complex,  the
Red Dog Operations and the Pend Oreille Operations. Our Lennard Shelf operation
in Western  Australia was  permanently  closed in August 2008, and Pend Oreille
was placed on care and maintenance in February 2009.


ZINC PRODUCTION                 AVERAGE ZINC PRICE            OPERATING PROFIT
(000 TONES)                          ($/LB)                   ($ IN MILLIONS)*

[GRAPHIC  OMITTED]                [GRAPHIC  OMITTED]         [GRAPHIC OMITTED]

                                Zinc Production
                                   (000 TONES)
                                ---------------

                                2004       2005      2006      2007      2008
------------------------------------------------------------------------------
Refined                          296        223       296       292       270
Contained in concentrate       571.3        568       558       625       566
Other divisions                   48         45        35        74        97

                              Average Zinc Price
                                    ($/lb)
                              ------------------

                                2004       2005      2006      2007      2008
------------------------------------------------------------------------------
US Dollars                      0.48       0.63      1.49     1.47       0.85
Canadian Dollars                0.62       0.76      1.68     1.57       0.91


                               Operating Profit
                               ($ in millions)*
                               ----------------

                                2004       2005      2006      2007      2008
------------------------------------------------------------------------------
Operating Profit                 459        594       1614     1328       439


*  Before depreciation and amortization

In 2008, our zinc operations  accounted for 30% of revenue and 15% of operating
profit before depreciation and amortization.

<TABLE>
<CAPTION>
===================================================================================================================================
                                                                                                  OPERATING PROFIT (LOSS) BEFORE
                                                                   REVENUES                       DEPRECIATION AND AMORTIZATION
------------------------------------------------------------------------------------------------------------------------------------
($ in millions)                                            2008         2007          2006          2008          2007      2006
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>          <C>           <C>          <C>            <C>       <C>
Trail                                                    $1,442       $1,839        $1,802       $  208         $  396    $  442
Red Dog                                                     703        1,434         1,539          240            885     1,138
Pend Oreille                                                 41           70            88         (15)             17        52
Lennard Shelf                                                26           47             -         (18)              3         -
Other                                                        50           49            38            7             11         7
Inter-Division Sales                                      (191)        (387)         (468)           17             16      (25)
------------------------------------------------------------------------------------------------------------------------------------
Total                                                    $2,071       $3,052        $2,999       $  439        $ 1,328   $ 1,614
===================================================================================================================================
</TABLE>

-------------------------------------------------------------------------------
10    Teck 2008 Management's Discussion and Analysis

<PAGE>

<TABLE>
<CAPTION>
===================================================================================================================================
                                                                   Production                                 Sales
------------------------------------------------------------------------------------------------------------------------------------
(000's tonnes)                                               2008         2007          2006        2008         2007          2006
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>          <C>           <C>         <C>          <C>           <C>
Refined zinc
  Trail                                                       270          292           296         266          292           290
===================================================================================================================================

Contained in concentrate
  Red Dog                                                     515          575           558         529          576           536
  Pend Oreille                                                 35           29            34          35           29            35
  Lennard Shelf                                                16           21             -          18           18             -
  Other business units                                         97           74            35          96           73            36

===================================================================================================================================
   Total                                                      663          699           627         678          696           607
===================================================================================================================================
</TABLE>

MARKETS

ZINC

Even with a global slowing in zinc  consumption,  growth  estimates for zinc in
2008 are estimated at 1.5% according to the  International  Lead and Zinc Study
Group  (ILZSG).  China  accounted  for all the  growth,  more  than  offsetting
declines in the United States, Japan and Western Europe.

London Metal  Exchange (LME) stocks rose by 164,350 tonnes to 253,500 tonnes in
2008.  Total reported  refined  inventories  (LME,  Shanghai  Futures  Exchange
(SHFE), Producer, Consumer and Merchant) at year end were about 796,000 tonnes,
or 25 days of global  consumption,  still well below the 25-year  average of 39
days.

Prices of US$1.08  per pound at the start of the year fell to US$0.51 per pound
by year end. In 2008, zinc prices averaged  US$0.85 per pound, a decline of 42%
from the 2007 average of US$1.47 per pound.

China imported 11% more zinc concentrates than in 2007 due to growth in refined
production and capacity, while domestic mine production was reported to be flat
versus 2007.  In 2008,  China was a net  importer of 112,000  tonnes of refined
zinc, versus net exports of 126,000 tonnes in 2007.


ZINC PRICE AND LME INVENTORY      GLOBAL DEMAND FOR ZINC    REPORTED ZINC STOCKS

     [GRAPHIC OMITTED]               [GRAPHIC OMITTED]       [GRAPHIC OMITTED]

                         Zinc Price and LME Inventory
                         ----------------------------

                                    US$/pound    Tonnes (000's)
                     ------------------------------------------
                         Jan-04       0.46           758.3
                         Feb-04       0.49           722.6
                         Mar-04       0.50           716.3
                         Apr-04       0.47           760.7
                         May-04       0.47           728.7
                         Jun-04       0.46           731.1
                         Jul-04       0.45           706.1
                         Aug-04       0.44           737.2
                         Sep-04       0.44           736.6
                         Oct-04       0.48           705.7
                         Nov-04       0.50           674.0
                         Dec-04       0.54           629.4
                         Jan-05       0.57           617.6
                         Feb-05       0.60           604.6
                         Mar-05       0.62           574.1
                         Apr-05       0.59           545.0
                         May-05       0.56           524.8
                         Jun-05       0.58           611.6
                         Jul-05       0.54           582.5
                         Aug-05       0.59           560.2
                         Sep-05       0.63           531.3
                         Oct-05       0.68           488.3
                         Nov-05       0.73           439.5
                         Dec-05       0.83           394.1
                         Jan-06       0.95           372.9
                         Feb-06       1.01           329.7
                         Mar-06       1.10           285.1
                         Apr-06       1.40           260.7
                         May-06       1.62           238.8
                         Jun-06       1.46           217.2
                         Jul-06       1.51           185.2
                         Aug-06       1.52           173.5
                         Sep-06       1.54           142.4
                         Oct-06       1.73           107.6
                         Nov-06       1.99            85.8
                         Dec-06       2.00            88.5
                         Jan-07       1.72            97.7
                         Feb-07       1.50            94.3
                         Mar-07       1.48           106.3
                         Apr-07       1.61            96.4
                         May-07       1.74            76.6
                         Jun-07       1.63            73.0
                         Jul-07       1.61            65.9
                         Aug-07       1.47            65.0
                         Sep-07       1.31            61.4
                         Oct-07       1.35            71.7
                         Nov-07       1.15            80.0
                         Dec-07       1.07            89.2
                         Jan-08       1.06           111.3
                         Feb-08       1.11           123.3
                         Mar-08       1.14           124.4
                         Apr-08       1.03           126.5
                         May-08       0.99           143.6
                         Jun-08       0.86           153.6
                         Jul-08       0.84           157.3
                         Aug-08       0.78           160.5
                         Sep-08       0.79           155.1
                         Oct-08       0.59           182.0
                         Nov-08       0.52           193.1
                         Dec-08       0.50           253.5

                     Global Demand for Zinc (tonnes 000's)
                     -------------------------------------

                                 Rest of World     China
                       -----------------------------------
                        1982        5.598          0.304
                        1983        5.859          0.322
                        1984        6.013          0.337
                        1985        5.998          0.349
                        1986        6.165          0.382
                        1987        6.313          0.409
                        1988        6.463          0.385
                        1989        6.324          0.391
                        1990        6.120          0.500
                        1991        6.112          0.530
                        1992        6.046          0.551
                        1993        6.079          0.530
                        1994        6.305          0.655
                        1995        6.769          0.750
                        1996        6.722          0.829
                        1997        6.992          0.830
                        1998        7.115          0.920
                        1999        7.282          1.200
                        2000        7.658          1.350
                        2001        7.420          1.500
                        2002        7.627          1.750
                        2003        7.688          2.155
                        2004        7.957          2.690
                        2005        7.570          3.041
                        2006        7.857          3.115
                        2007        7.712          3.597
                        2008        7.397          4.014

                             Reported Zinc Stocks
                             --------------------

                           Tonnes   Days       25 yr average
                 -------------------------------------------
                   2004     1040     36               39
                   2005     828      29               39
                   2006     547      18               39
                   2007     635      21               39
                   2008     836      27               39


The zinc concentrate  market in 2008 was close to a balanced  market.  Smelters
had sufficient concentrates to supply their needs but no significant stockpiles
were built.  The  profitability of zinc mining came under pressure as the price
of zinc fell steadily  throughout  the year.  Closures of mines and  production
cutbacks began in July 2008. As the price  declined  through the balance of the
year, mine closures  accelerated,  reducing  production by an estimated 580,000
tonnes in 2008.

The closures and cutbacks affected refined production, and we estimate close to
200,000 tonnes of refined zinc was cut from 2008 global planned production.

-------------------------------------------------------------------------------
                            Teck 2008 Management's Discussion and Analysis   11
<PAGE>

LEAD

The global  market  for  refined  lead  moved  into  surplus in 2008 after four
consecutive  years of deficits.  As a result,  lead prices fell  throughout the
year to US$0.43 per pound.  The LME cash price  average of US$0.95 per pound in
2008 was down from the 2007 average of US$1.17 per pound. LME stocks at the end
of 2008 remained similar to 2007 levels at 45,200 tonnes.


LEAD PRICE AND LME INVENTORY     GLOBAL DEMAND FOR LEAD     REPORTED LEAD STOCKS

     [GRAPHIC OMITTED]            [GRAPHIC OMITTED]          [GRAPHIC OMITTED]

                         Lead Price and LME Inventory
                         ----------------------------

                                   US$/lb   Tonnes (000's)
                     ------------------------------------
                        Jan-04      0.34         89.1
                        Feb-04      0.40         76.8
                        Mar-04      0.40         74.3
                        Apr-04      0.34         70.3
                        May-04      0.37         59.6
                        Jun-04      0.39         45.5
                        Jul-04      0.43         37.2
                        Aug-04      0.42         36.3
                        Sep-04      0.42         53.4
                        Oct-04      0.42         49.6
                        Nov-04      0.44         41.3
                        Dec-04      0.44         40.7
                        Jan-05      0.43         35.7
                        Feb-05      0.44         33.6
                        Mar-05      0.46         33.3
                        Apr-05      0.45         33.6
                        May-05      0.45         32.3
                        Jun-05      0.45         42.1
                        Jul-05      0.39         64.7
                        Aug-05      0.40         54.2
                        Sep-05      0.42         39.8
                        Oct-05      0.46         49.4
                        Nov-05      0.46         39.8
                        Dec-05      0.51         43.6
                        Jan-06      0.57         59.8
                        Feb-06      0.58         77.4
                        Mar-06      0.54         89.6
                        Apr-06      0.53         99.8
                        May-06      0.53        111.1
                        Jun-06      0.44        111.4
                        Jul-06      0.48        101.7
                        Aug-06      0.53         78.7
                        Sep-06      0.61         60.7
                        Oct-06      0.69         45.2
                        Nov-06      0.74         43.8
                        Dec-06      0.78         41.1
                        Jan-07      0.76         39.1
                        Feb-07      0.81         32.1
                        Mar-07      0.87         33.3
                        Apr-07      0.91         41.6
                        May-07      0.95         47.6
                        Jun-07      1.10         45.1
                        Jul-07      1.40         37.6
                        Aug-07      1.41         25.4
                        Sep-07      1.46         22.2
                        Oct-07      1.69         39.4
                        Nov-07      1.51         44.0
                        Dec-07      1.18         45.5
                        Jan-08      1.18         48.7
                        Feb-08      1.39         45.8
                        Mar-08      0.99         49.1
                        Apr-08      1.28         56.4
                        May-08      1.01         66.2
                        Jun-08      0.85        101.9
                        Jul-08      0.88         91.0
                        Aug-08      0.87         81.9
                        Sep-08      0.85         64.3
                        Oct-08      0.67         48.6
                        Nov-08      0.59         64.3
                        Dec-08      0.44         45.2

                             Global Demand for Lead
                                (tonnes 000's)
                            ------------------------

                                  Rest of World             China
               ---------------------------------------------------
               1982                  4.934                  0.191
               1983                  4.932                  0.210
               1984                  5.030                  0.224
               1985                  4.967                  0.243
               1986                  5.054                  0.249
               1987                  5.124                  0.256
               1988                  5.164                  0.250
               1989                  5.387                  0.250
               1990                  5.215                  0.244
               1991                  5.078                  0.250
               1992                  5.044                  0.261
               1993                  4.903                  0.305
               1994                  5.199                  0.295
               1995                  5.365                  0.445
               1996                  5.505                  0.470
               1997                  5.568                  0.485
               1998                  5.560                  0.505
               1999                  5.718                  0.524
               2000                  5.925                  0.590
               2001                  5.780                  0.700
               2002                  5.686                  0.950
               2003                  5.641                  1.183
               2004                  5.786                  1.510
               2005                  5.828                  1.973
               2006                  5.856                  2.213
               2007                  5.600                  2.573
               2008                  5.212                  3.211


                             Reported Lead Stocks
                             --------------------

                            Tonnes           Days       25 yr average
         ------------------------------------------------------------
           2004              293              15                27
           2005              288              14                27
           2006              270              12                27
           2007              264              12                27
           2008              274              12                27


For the seventh consecutive year, global refined lead consumption was above the
25-year trend growth of 1.6% per year. China's growth was greater than the rest
of the world combined,  as China's  electric bike fleet increased the number of
bikes sold by an estimated 10%.  Electric bikes in China now account for 27% of
China's refined lead consumption.  The export taxes instituted by China in 2007
continued  to have an effect on lead  exports  from  China.  China  exported on
average 17,000 tonnes per month in 2007,  while in the first six months of 2008
exports  averaged  4,000  tonnes per month.  In the second half of 2008,  China
turned from an exporter of refined lead to an importer.

OPERATIONS

Trail Operations

Our Trail Operations,  located in British Columbia,  include one of the world's
largest fully-integrated zinc and lead smelting and refining complexes, and the
Waneta hydroelectric dam and transmission system. The metallurgical  operations
at Trail produce refined zinc and lead, and a variety of precious and specialty
metals, chemicals and fertilizer products. The Waneta dam provides power to the
metallurgical operations. Surplus power is sold through the transmission system
to customers in British Columbia and the United States.

Trail metal  operations  contributed  $146 million to operating  profits before
depreciation  and amortization in 2008 compared with $336 million in 2007, with
the  reduction  due  primarily to lower prices for both lead and zinc and lower
zinc sales.  These lower zinc sales were partially  offset by higher lead sales
volumes  and higher  contribution  margins  from  specialty  metals and sulphur
products.

Refined zinc production of 270,000 tonnes was 22,000 tonnes lower than in 2007.
A series of technical and operational problems in the leaching and purification
areas, which were resolved early in the third quarter, affected production.

Additionally, in response to changing market conditions we reduced refined zinc
production  by  approximately  4,000 to 5,000 tonnes per month,  commencing  in
November 2008. This 20% curtailment,  which will remain in place until at least
May 2009,  leaves the operation with  sufficient  metal to meet customer needs.
Refined  lead  production  will not be  affected.  Power sales are  expected to
increase by  approximately  15 gigawatt hours per month during the curtailment,
improving profitability.

Refined lead  production of 85,000 tonnes exceeded 2007 levels by 8,600 tonnes,
but was lower than plan due to  operational  issues in the drossing  plant.  We
achieved  a refined  germanium  production  record  through  improved  recovery
initiatives.

The Waneta dam is one of several hydroelectric  generating plants in the region
operated  through  contractual  arrangements  under which we currently  receive
approximately  2,750 gigawatt hours of energy entitlement per year,  regardless
of the water flow available for power generation. We sell energy surplus to our
needs to third parties at market rates.

-------------------------------------------------------------------------------
12    Teck 2008 Management's Discussion and Analysis
<PAGE>

Higher average power prices boosted  operating  profit before  depreciation and
amortization  from surplus  power sales to $62 million in 2008 from $60 million
the  previous  year.  Sales  volumes  were down 11% as a result  of  generation
reductions in the spring during off peak hours when prices were low.

Capital  expenditures  for the year totalled $44 million.  The most significant
projects completed were the replacement of an acid storage tank and upgrades to
the  silver  refinery   ventilation  and  security   controls.   The  remaining
expenditures  were directed to upgrade  projects,  each  totalling less than $2
million.  In addition,  we completed  upgrade work on the Waneta dam electrical
infrastructure at a cost of $6 million.

In 2009,  we expect to produce  85,000  tonnes of refined lead and 17.6 million
ounces of silver.  We are  curtailing  refined zinc  production by about 20% or
about  4,000 to 5,000  tonnes  per  month  until at least  May,  at which  time
production rates may be increased  depending on market conditions.  Our current
forecast for refined zinc production is 270,000 tonnes.

Red Dog Operations

Red Dog's location in northwest  Alaska exposes the operation to severe weather
and winter ice conditions,  which can significantly impact production and sales
volumes and operating costs. In addition, the mine's bulk supply deliveries and
all  concentrate  shipments  occur  during a short ocean  shipping  window that
normally  runs from early  July to late  October.  Because of this short  ocean
shipping  window,  Red Dog's sales volumes are normally  higher in the last six
months of the year, which can result in significant volatility in its quarterly
earnings, depending on metal prices.

Zinc  and  lead   production  in  2008  declined  by  10%  due  to  lower  mill
availability. The availability was reduced by mechanical problems including the
failure  of a crusher  shaft.  Site  operating  costs  increased  9% over 2007,
resulting in a 20% increase in unit operating costs due to both higher fuel and
supply costs, and lower concentrate production.

Red Dog's 2008  shipping  season began on July 11 and was  completed on October
27. Final tonnages shipped for 2008 were 916,000 tonnes of zinc concentrate and
245,000  tonnes  of  lead  concentrate.  Due to  sea-ice  and  adverse  weather
conditions,  the  last  vessel  departed  without  a full  shipment.  Metal  in
concentrate  available  for sale from January 1, 2009 to the  beginning of next
year's shipping  season is 221,000 tonnes of zinc in concentrate.  All off site
lead inventories had been sold as at December 31, 2008.

In accordance  with the operating  agreement  governing Red Dog, the royalty to
NANA  Regional  Corporation  Inc.  (NANA)  is now at  25%  of net  proceeds  of
production.  The NANA royalty  charge in 2008 was US$92  million  compared with
US$190  million in 2007.  The net proceeds  royalty  will  increase by 5% every
fifth  year to a  maximum  of  50%.  The  increase  to 30% of net  proceeds  of
production  will occur in 2012.  NANA has advised us that it ultimately  shares
approximately   62%  of  the  royalty  with  other   Regional   Alaskan  Native
Corporations  pursuant to section 7(i) of the Alaskan Native Claims  Settlement
Act.

Red Dog's  operating  profit  before  depreciation  and  amortization  declined
significantly  to $240  million  in 2008  from  $885  million  in 2007 and $1.1
billion in 2006. The reduction in 2008 operating  profit compared with 2007 was
due mainly to the lower  realized  price of zinc and lead and a 9% reduction in
zinc sales volumes reflecting the lower production levels.

Capital  spending in 2008  included  US$15  million for tailings dams and US$26
million on other sustaining  capital projects and US$4 million for drilling and
other costs on the Aqqaluk deposit.

We continue  with the  long-term  dewatering  of our nearby  shallow  shale-gas
exploration wells. The five-hole system  commissioned in the first half of 2008
is operated continuously  throughout the year. Although additional drilling and
capital  expenditures  are on hold, we will continue to operate the  dewatering
system  in 2009  with gas flow  tests  conducted  when the  formation  has been
sufficiently  dewatered.  The flow  tests  will form the  basis  for  decisions
related to the economic  feasibility of converting from  diesel-fired  power to
natural gas obtained from the shale formations.

We  expect  2009  production  to be  approximately  570,000  tonnes  of zinc in
concentrate and 125,000 tonnes of lead in concentrate.

-------------------------------------------------------------------------------
                            Teck 2008 Management's Discussion and Analysis   13
<PAGE>

WATER DISCHARGE AND AQQALUK PERMITTING

The  approval  process  for  the  Aqqaluk  Supplemental   Environmental  Impact
Statement  (SEIS) and the  time-table  for the  issuance  of the renewal of our
operation's  water discharge  permit remain largely on schedule.  We anticipate
that the renewed  permit will be issued during the third  quarter of 2009.  The
issuance of the permit is subject to approval by any party who has commented on
the draft  SEIS.  The 2007  renewal of our water  permit was  appealed  and the
permit was subsequently  withdrawn over procedural  concerns.  An appeal of the
pending permit is also possible. This could result in a stay of the issuance of
the permit  and delay  access to the  Aqqaluk  deposit.  At current  production
rates,  we estimate that the main pit will be exhausted by the end of the first
quarter of 2011.  If the permit is  delayed  beyond the first  quarter of 2010,
production at Red Dog could be limited or curtailed.

The mine is operating  under a consent decree as the existing  permit  contains
end-of-pipe  limitations on total  dissolved  solids (TDS) that the mine cannot
meet on a sustained basis. TDS are non-toxic salts created because of the water
treatment  process to eliminate  metals from the mine's  discharge  water.  The
largest  constituent of this TDS is gypsum, a common component in "hard" water.
Pending  approval of the SEIS and the issuance of the renewal  permit,  we will
continue to operate  under the  existing  water  discharge  permit.  The mine's
discharge   complies  with  the  criteria  in  the  consent  decree  and  those
anticipated in the renewed discharge permit, which the EPA has determined to be
fully  protective of the environment.  However,  there can be no assurance that
the past and ongoing violations of the existing permit will not result in other
civil claims.  Appeals of the SEIS, renewed permit or other permits could delay
the mining of Aqqaluk beyond 2010.

In addition to  treating  mill  effluent  and runoff  from areas  disturbed  by
mining,  we collect  and treat  run-off  from areas where  naturally  occurring
acidic drainage historically impacted water quality. As a result, water quality
has improved  and fish now spawn in areas where  pre-mining  conditions  caused
fish mortality.

Pend Oreille Operations

Our Pend Oreille mine, located in north-eastern Washington State, produces zinc
and lead  concentrates,  which are delivered to our Trail smelter 80 kilometres
to the northwest, in British Columbia.

Mine  production  in 2008 was  35,000  tonnes of zinc and 5,700  tonnes of lead
compared  with  28,800  tonnes of zinc and 4,200  tonnes of lead in 2007.  Zinc
production  was  6,200  tonnes  higher  in 2008  than in  2007 as a  result  of
increased throughput and higher-grade ore, coupled with better mill recoveries.

The  mine  incurred  a $15  million  operating  loss  before  depreciation  and
amortization  in 2008  compared  with a profit  of $17  million  in 2007 due to
significantly lower zinc and lead prices.

Due to reduced  metal demand and  persistent  weakness in zinc prices,  we also
recorded a pre-tax  impairment charge of $51 million and the mine was shut down
in February 2009, affecting  approximately 165 employees.  We have transitioned
the operation to care and maintenance with a view to a potential restart in the
event of a significant market improvement.

Lennard Shelf Operations

In August,  2008, together with our partner Xstrata Zinc, we permanently closed
the Pillara mine at Lennard  Shelf in Western  Australia.  Production  from the
Pillara mine was 30,800 tonnes of zinc and 9,000 tonnes of lead in  concentrate
in 2008  compared with 42,100 tonnes of zinc and 12,400 tonnes of lead in 2007.
Our share of the operating loss in 2008, before  depreciation and amortization,
was $18 million  compared with a profit of $3 million in 2007. We also recorded
a pre-tax impairment charge of $12 million due to the closure.

Technology Marketing

The Product Technology Centre (PTC) in Mississauga,  Ontario, supports our zinc
customers by developing and implementing technologies and alloys for continuous
and general galvanizing. In addition, the group supports the zinc

-------------------------------------------------------------------------------
14    Teck 2008 Management's Discussion and Analysis
<PAGE>

market in  collaboration  with the  International  Zinc Association by pursuing
independent research and development related to zinc-based batteries.

In lead, the battery technology group at PTC develops and markets  technologies
that improve the  manufacture of lead acid  batteries by decreasing  weight and
contained  lead,  and improving  performance.  The new  Continuous  Paste Mixer
(CPM(TM))  was  brought  to market in 2008 and shows a  considerable  amount of
promise.  PTC works with our wholly owned  subsidiary  H. Folke  Sandelin AB in
Sweden in the  development  of the extruder  (CRX(TM)) for the  manufacture  of
positive and negative  plates for lead acid  batteries.  Sandelin,  the leading
producer  of  continuous  extruders  for the lead  sheathing  of power  cables,
benefitted from the strong cable business in 2008.

EXPLORATION

Alaska,  Ireland, and Australia were the main jurisdictions for sediment hosted
and Irish-type  zinc  exploration.  Approximately  $16 million in project costs
were incurred for zinc projects in 2008.  Encouraging drill results  warranting
further  exploration  were  returned  from the  Noatak  project  in the Red Dog
district (Alaska) and the Limerick district of Ireland.  An early-stage project
for sediment-hosted zinc was initiated in northern Queensland, northeast of the
Century mine. Zinc exploration in 2009 will be significantly  reduced,  focused
on core assets and internal opportunities.

GOLD

2008 PRODUCTION: 279,000 OUNCES

In February 2009, we announced the sale of our 50% interest in the Williams and
David Bell mines in  Ontario.  Upon  closing,  which is  expected in the second
quarter of 2009, our gold business will consist of our 40% interest in the Pogo
mine in Alaska, our 78.8% interest in the Morelos development project in Mexico
and our 60%  interest  in the Agi Dagi and Kirazli  projects in Turkey.  We are
pursuing the potential sale of our gold assets.

In 2008,  our gold  operations  accounted for 4% of revenue and 3% of operating
profit before depreciation and amortization.

<TABLE>
<CAPTION>

====================================================================================================================================
                                                                                              Operating Profit Before Depreciation
                                                                  Revenues                              and Amortization
------------------------------------------------------------------------------------------------------------------------------------
($ in millions)                                           2008          2007          2006          2008          2007          2006
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>           <C>            <C>           <C>           <C>
Pogo                                                     $ 130         $  59         $   -          $ 55          $ 16          $  -
Hemlo                                                      119           123           143            29            19            31
------------------------------------------------------------------------------------------------------------------------------------
Total                                                    $ 249         $ 182         $ 143          $ 84          $ 35          $ 31
------------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                                                 Production                                  Sales
------------------------------------------------------------------------------------------------------------------------------------
(000's ounces)                                            2008          2007          2006          2008          2007          2006
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>            <C>          <C>            <C>           <C>
Pogo                                                       139           104            45           141            93            39
Hemlo                                                      130           169           205           127           165           207
Other business units                                        10            12            13            10            13            11
------------------------------------------------------------------------------------------------------------------------------------
Total                                                      279           285           263           278           271           257
====================================================================================================================================
</TABLE>

MARKETS

Gold  prices  averaged  US$872  per troy  ounce  in 2008,  up 25% from the 2007
average. Growth in gold as an investment continues to be the main driver of the
strong  prices.  A falling US dollar  and  rising  oil  prices saw gold  prices
increase early in the year to their historic high of US$1,023 per troy ounce in
March. The US dollar strengthened over the summer and

-------------------------------------------------------------------------------
                           Teck 2008 Management's Discussion and Analysis    15
<PAGE>

gold prices retreated to near US$700 per troy ounce. A flight from equities and
commodities  in the fourth  quarter  pushed gold prices back up to about US$900
per troy ounce.

Global mine  production  fell by 4% in 2008 to 2,385  tonnes while scrap supply
rose 13% and net official  sector sales fell by 43%.  Overall supply fell 4% to
3,772  tonnes.  Supply is  expected to be  marginally  higher in 2009 with mine
supply and scrap supply up marginally  and net official  sector sales likely to
remain flat.

Global fabrication  demand declined by 8% in 2008 to 2,824 tonnes,  with an 11%
fall in jewellery demand  accounting for most of the drop. Demand for jewellery
in the US fell 25%,  Europe fell 14% and the Indian Sub Continent fell 16% on a
year-over-year  basis.  Expectations  for 2009 are for  continued  weakness  in
fabrication  demand.  However,  persistent  global  financial  uncertainty  may
continue to provide support for gold as an investment vehicle.


Gold Production            Average Gold Price               Operating Profit
(000 ounces)                      ($/oz)                     ($ in millions)*

[GRAPHIC  OMITTED]          [GRAPHIC  OMITTED]             [GRAPHIC OMITTED]


                                Gold Production
                                  (000 ounces)
                                ---------------

                            2004     2005     2006     2007     2008
         ------------------------------------------------------------
         Gold Division     247.4      230      250    272.6    268.8
         Other Divisions    13.7       15       13     12.4     10.1


                               Average Gold Price
                                     ($/oz)
                               ------------------

                           2004     2005     2006      2007     2008
         ------------------------------------------------------------
         US Dollars         406      445      604       697      872
         Canadian Dollars   528      538      683       746      930


                               Operating Profit
                                ($ in millions)*
                               ----------------

                          2004     2005     2006      2007     2008
         ------------------------------------------------------------
         Operating Profit  54       30        31        35       84

         *  Before depreciation and amortization

OPERATIONS

Pogo Mine

The Pogo gold mine is located 145 kilometres southeast of Fairbanks, Alaska. We
hold a 40% interest and are the operator of the mine.  Pogo is a joint  venture
with Sumitomo  Metal Mining Co. Ltd. (51%) and Sumitomo  Corporation  (9%). The
mine reached commercial production in April 2007.

Pogo's 2008 gold production was 347,000 ounces. This significant  increase over
2007 production of 260,000 ounces was primarily due to successfully stabilizing
operations  following  start up. Site operating  costs  increased by 31%, which
were partly due to higher energy and mine consumable costs as well as increased
mill throughput.

Our share of the operating profit before  depreciation and amortization was $55
million in 2008  compared to $16 million in 2007.  A higher gold price  largely
contributed  to the  improved  operating  profit.  Gold  production  in 2009 is
expected to be 355,000 ounces with higher ore throughput  being offset by lower
grades.  Capital  expenditures are estimated at US$9 million  primarily for the
replacement of mine equipment and infrastructure.

Current proven and probable  reserves  provide  sufficient ore through to 2016.
Exploration is currently focused on near mine targets to extend the life of the
existing operation.

Hemlo Operations

The Hemlo  operations,  which consist of the Williams and David Bell mines, are
located  approximately 350 kilometres east of Thunder Bay, Ontario. In February
2009, we announced the sale of our 50% interest in the Hemlo  operations to our
joint venture partner,  Barrick Gold  Corporation for US$65 million.  We expect
the  transaction to close in the second quarter 2009,  which will result in the
recognition of approximately $60 million pre-tax gain on closing.

Hemlo's 2008 gold  production  was 260,000  ounces  representing a 23% decrease
from 2007.  The decline in production  was due primarily to lower ore grade and
decreased throughput, reflective of a declining grade and production profile of
a maturing operation.

Our share of Hemlo's operating profit before  depreciation and amortization was
$29 million in 2008 compared to $19 million in 2007 and a $31 million in 2006.

-------------------------------------------------------------------------------
16    Teck 2008 Management's Discussion and Analysis
<PAGE>

EXPLORATION AND DEVELOPMENT

Turkey, Canada and Mexico were the main jurisdictions for gold exploration with
expenditures totalling approximately $15 million.

Progress  on the  Morelos  project in Mexico was  inhibited  by road  blockades
raised by a minority group of local landholders. Feasibility level drilling was
completed on the Guajes West zone, but completion of in-fill drilling on the El
Limon zone was  prevented by the  blockades.  Feasibility  engineering  was not
started  pending  resolution of the community  issues.  Preliminary  geological
modelling work on the Agi Dagi - Kirazli  project in Turkey was updated in 2008
to include  results from an additional 81 drill holes.  No  engineering or mine
planning work has yet been carried out for the project.

ENERGY

Our energy  business  includes a 20% interest in the Fort Hills Energy  Limited
Partnership,  which is developing  the Fort Hills oil sands project  located in
Northern  Alberta,  and our 50%  interest  in various  oil sand  leases that we
jointly  own with UTS  Energy  Corporation  (UTS).  Our share of the  estimated
recoverable bitumen resources increased to approximately 1.7 billion barrels.

Our oil sands  projects  are  expected  to be  long-life  assets  with  limited
operating risks.  These projects are based on substantial  resources,  will use
conventional  technology,  build on our core  skills of  large-scale  truck and
shovel  mining  operations,   include  partners  with  synergistic  skills  and
abilities, and are located in a politically stable jurisdiction.

FORT HILLS OIL SANDS PROJECT

The Fort  Hills oil sands  project  includes  approximately  24,720  contiguous
hectares of oil sands leases located about 90 kilometres north of Fort McMurray
in Northern Alberta. An upgrader that would be located in Sturgeon County, just
north of Edmonton has been deferred by the partners.  We hold a 20% interest in
the Fort  Hills  Energy LP (the Fort  Hills  Partnership),  which owns the Fort
Hills  project,  with 20% being held by UTS and the  remaining  60% held by the
project operator, Petro-Canada Limited.

In 2005, we acquired a 15% interest in the Fort Hills  Partnership  by agreeing
to fund 34% of the first $2.5 billion of project expenditure,  or $850 million,
and our 15% pro-rata share  thereafter.  In 2007,  Teck and  Petro-Canada  each
subscribed for an additional 5% interest in the Fort Hills Partnership. We will
earn our  additional  interest  by funding a further  $375  million of the Fort
Hills  Partnership  expenses beyond the existing earn-in  obligations.  We will
satisfy our $375 million  commitment  by  contributing  27.5% of the Fort Hills
Partnership expenses beyond the initial $2.5 billion and up to project spending
of $7.5  billion.  Thereafter  we will fund our 20% pro rata  share of  project
spending.

Our 20% interest in Fort Hills  represents  776 million  barrels of recoverable
bitumen based on Sproule  Unconventional  Limited's (Sproule) December 31, 2008
best estimate of the  contingent  bitumen  resource of 3.88 billion  barrels of
recoverable  bitumen,  with a low estimate of 2.10  billion  barrels and a high
estimate of 4.35 billion barrels, all on a 100% basis.

In 2008, our spending on the Fort Hills Project was $434 million,  bringing our
cumulative spending to $667 million at the end of 2008.  Activities planned for
2009 include engineering studies,  specifically for the review and finalization
of the FEED stage  engineering,  site preparation and early works. Our share of
funding for the project in 2009, including our earn-in commitments, is expected
to be approximately $330 million.

In November  2008,  together  with our partners in the Fort Hills  Project,  we
announced  that we will  defer the final  investment  decision  for the  mining
portion of the project until a cost estimate consistent with the current market
environment  can be  established.  The partners now  anticipate  making a final
investment  decision in 2009. The upgrader  portion of the project has been put
on hold and a decision on whether to proceed with the upgrader  will be made at
a later date. As a result of the decision to defer the upgrader  portion of the
project,  we recorded a $90 million  after-tax  impairment  charge  against our
investment in Fort Hills.

-------------------------------------------------------------------------------
                            Teck 2008 Management's Discussion and Analysis    17
<PAGE>

The partners remain  committed to the retention of the oil sands leases and are
holding  discussions  with the Government of Alberta on the current lease term.
Proceeding with the project is also subject to certain regulatory approvals. In
October  2008,  the  Alberta  Energy  Resources  Conservation  Board (the ERCB)
released  its  decision  regarding  the proposed  mine  amendment  requested by
Petro-Canada on behalf of the Fort Hills  Partnership.  The decision,  which is
subject to Order in Council,  provides  for the  required  revision to the mine
footprint to enable construction to proceed for the first phase of the mine and
extraction portion of the Fort Hills project.  The ERCB has requested a revised
assessment  of the  cumulative  effects and mine plan by  December  31, 2009 to
facilitate  the  request  to  increase  the  total  recoverable  resource.  The
regulatory  hearing on the Sturgeon  County upgrader was convened in the second
half of 2008 and the ERCB  decision  report was released in January  2009.  The
decision, which is subject to Order in Council, found the upgrader to be in the
public  interest  and  approved  the  project  subject  to  conditions  and the
commitments made by Petro-Canada.

We remain committed to our  diversification  strategy including our development
of oil sands as part of the formation of the Energy  business unit. We continue
to regard Fort Hills as an attractive,  long-term asset.  However,  in light of
the significant  cost of participation in a near-term oil sands project at this
stage  of  the  business  and  commodity  cycle,  we  are  exploring  strategic
alternatives in connection with this asset.

TECK/UTS JOINT VENTURE

We have jointly acquired,  with UTS, oil sands leases located east and north of
the Fort Hills Project totalling  approximately  124,000 hectares.  To date, we
have spent $348 million for our 50% share of the  acquisition,  exploration and
engineering costs of these leases. We expect to spend approximately $24 million
for our share of studies and exploration drilling planned for 2009. The planned
2008/2009 exploration program consists of approximately 60 strategically placed
wells with a view to maximize the resource potential per well.

In March 2008, a Public Disclosure Document was released describing preliminary
development  plans for two new oil sands mines.  The Equinox oil sands project,
which we formerly  referred to as Lease 14, is located  immediately west of the
Fort Hills Project and the Frontier oil sands  project,  which  includes  Lease
311, is approximately 10 kilometres north of the Equinox Project. The filing of
the Public Disclosure Document begins the formal regulatory process for the two
projects.

FRONTIER AND EQUINOX PROJECTS

The Equinox oil sands project consists of  approximately  2,890 hectares of oil
sands leases (Lease 14) and is immediately west of the Fort Hills Project.  Our
50%  interest  in  the  Equinox  Project  represents  166  million  barrels  of
recoverable  bitumen  based on a  contingent  resource  estimate of 330 million
barrels of recoverable  bitumen defined by 124 core holes. The joint venture is
proceeding with a Design Basis Memorandum (DBM) study to assess the feasibility
of  developing  the  Equinox  Project as a  stand-alone  50,000  barrel per day
bitumen mining/extraction  operation. The DBM study is expected to be completed
in the  first  quarter  of 2009 and will also  provide  a basis  for  assessing
development of the larger Frontier Project.

The Frontier oil sands project consists of approximately 26,410 hectares of oil
sands  leases,  including  Lease  311,  and is  located on the west side of the
Athabasca River  approximately 10 kilometres north of the Equinox Project.  The
joint  venture  completed 353 core holes in the first quarter of 2008, of which
325 core holes were located in the Frontier  Project area.  Full assay and test
results have been completed on the cores from the 2007/2008 winter  exploration
program,  the  geological  model has been  updated  and a  contingent  resource
estimate has been  prepared for the southern  portion of the Frontier  Project.
For  the  year  ended  December  31,  2008,  Sproule,  as  independent  reserve
evaluators, presented contingent resource estimates for the southern portion of
the Frontier project.  Our 50% interest in the Frontier Project  represents 774
million barrels of recoverable  bitumen based on Sproule's Best Estimate of the
contingent  bitumen  resource of 1.55 billion  barrels of recoverable  bitumen,
with a low estimate of 980 million  barrels and a high estimate of 2.55 billion
barrels,  on a 100% basis.  Engineering  studies  are  expected to start on the
Frontier  Project in the second  quarter  2009  assessing  various  development
options for a stand-alone  mine/extraction operation in the range of 100,000 to
160,000 barrels of bitumen per day.

The joint  venture  also holds  additional  oil sands  leases  both east of the
Athabasca  River  (60,000  hectares)  and west of the  Athabasca  River (34,700
hectares).  Preliminary  exploration  drilling  programs have been conducted on
some of these leases.  Further  exploration  core holes are planned  during the
2008/2009 winter drilling program.

-------------------------------------------------------------------------------
18    Teck 2008 Management's Discussion and Analysis
<PAGE>

A bulk-sampling  program  completed during the first quarter of 2008,  provided
oil sands ore for extraction and froth  treatment  pilot testing started during
the second half of 2008, to develop design  parameters for both the Equinox and
Frontier projects.  The pilot testing and analysis are expected to be completed
in 2009.

In  September  we  completed  the  transition  to become  operator of the joint
venture,  a  responsibility  that was  previously  undertaken by UTS. The joint
venture  continues  to advance the project  through the  regulatory  permitting
process and has  ongoing  consultations  with  stakeholders  including  project
update meetings with key stakeholder groups.

CONTINGENT RESOURCE ESTIMATES

Volumes of contingent  bitumen  resources  are  calculated at the outlet of the
proposed  extraction plant.  There is no certainty that it will be commercially
viable to produce any portion of the contingent bitumen resources.

Contingent  resources  are  defined  in the  Canadian  Oil and  Gas  Evaluation
Handbook as  published  by the  Canadian  Section of the  Society of  Petroleum
Evaluation Engineers as those quantities of petroleum estimated,  as of a given
date, to be potentially  recoverable from known accumulations using established
technology  or  technology  under  development,  but  which  are not  currently
considered to be  commercially  recoverable  due to one or more  contingencies.
Contingencies  may include  factors  such as  economic,  legal,  environmental,
political and regulatory  matters or a lack of markets.  It is also appropriate
to classify as  "contingent  resources"  the estimated  discovered  recoverable
quantities associated with a project in the early project stage.

There is no certainty that any of the Fort Hills Project,  the Equinox  Project
or the  Frontier  Project  will  produce any  portion of the volumes  currently
classified as "contingent resources". The primary contingencies which currently
prevent the  classification  of the  contingent  resources  disclosed  above as
reserves consist of: current uncertainties around the specific scope and timing
of the  development of each of the Fort Hills Project,  the Equinox  Project or
the Frontier Project;  lack of regulatory approvals for certain aspects of such
projects;  the  uncertainty  regarding  marketing plans for production from the
subject  areas;   improved   estimation  of  project  costs;   commodity  price
fluctuations;  in the case of the Fort Hills Project, the acceptance within the
Fort Hills partnership of the updates to the Fort Hills Project scope,  timing,
costs estimates and final Board of Directors approval of each of the Fort Hills
partnership   general  and  limited   partners;   and  those  other  risks  and
contingencies  described below under "Cautionary  Statement on  Forward-Looking
Information" and in the public filings described there. Contingent resources do
not  constitute,  and  should  not be  confused  with,  reserves.  There  is no
certainty  that it will be  commercially  viable to produce  any portion of the
contingent bitumen resources.

REGULATORY DEVELOPMENTS

In January 2008,  the  Government of Alberta  announced a plan to reduce carbon
emissions  intensity to 50% below 1990 levels by 2020.  Major  emitters  (those
over 100,000 tonnes per year) are required to reduce their emissions  intensity
by  12% as  compared  to  their  established  baseline.  For  new  construction
projects,  the plan is applicable  three years after start up. We are reviewing
the effect of this legislation on our oil sands projects.


CORPORATE

OTHER EXPLORATION AND DEVELOPMENT PROPERTIES

Nickel

Nickel laterite  (Brazil) and sulphide  (Canada) were the main targets in 2008.
Approximately  $7 million in project costs were incurred.  The company will not
be undertaking any significant nickel exploration in 2009.

A limited  amount of work was done on the Santa Fe and Ipora  lateritic  nickel
project  in  Brazil in 2008.  Mechanical  and  magnetic  upgrading  tests  were
completed on sample  material from pits.  Reclamation  work on all pits,  drill
sites and drill access roads is in progress.  Geological  and resource  reports
were filed for each  exploration  permit to meet tenure  requirements.  Surface
access contracts for exploration were  renegotiated with land owners. A limited
program of  baseline  environmental  studies  was  ongoing  in 2008.  The three
partners  have elected to put the project on care and  maintenance  in 2009 and
will undertake limited programs to maintain tenure and environmental  licenses.
As a result of the low  nickel  price,  we  recorded a $35  million  impairment
charge against the project.

-------------------------------------------------------------------------------
                            Teck 2008 Management's Discussion and Analysis   19
<PAGE>

DIAMONDS

Approximately $3 million was spent on diamond exploration in Canada,  mainly on
the Darby project in Nunavut.  Three new zones of kimberlite  occurrences  were
discovered. We will not be undertaking exploration for diamonds in 2009.

SEAFLOOR EXPLORATION

Approximately  $16  million was spent on seafloor  exploration  in  territorial
waters  off Papua New Guinea  and  Tonga.  The  target  was  dormant or extinct
"vents" on the seafloor that have deposited fields of high grade copper,  zinc,
gold, and silver  mineralization.  We operate the seaborne  programs,  and have
been earning into a potential  joint  venture with  Nautilus  Minerals  Inc. We
discovered a total of 12 new sulphide  occurrences,  four in Tonga and eight in
the  Bismarck  Sea off Papua New Guinea.  Average  metal grades from the Tongan
discoveries were 16 grams per tonne of gold, 8% copper, 12% zinc, and 184 grams
per tonne of silver. Average metal grades for 3 of the Bismarck Sea discoveries
were 1 gram per tonne of gold, 1.8% copper, 15.5% zinc, and 198 grams per tonne
of silver.

In January 2009, we advised Nautilus that we would not continue with the option
to earn into a joint  venture on  tenements in PNG and Tonga under the existing
terms in the regional  agreement.  In doing so, we  relinquished  our rights to
tenements in those  countries but retained our option to  participate in future
seafloor  exploration in Fiji, New Zealand,  Japan,  and the Northern  Marianna
Islands as defined in the regional agreement with Nautilus.


APPLIED RESEARCH AND TECHNOLOGY (ART)

Our Applied  Research and  Technology  Group (ART) in Trail,  British  Columbia
develops tests and implements technologies for new projects and operations. The
group works  closely  with our  operations  to define best  practices,  provide
technology  transfer,  and  assist  with  continuous  improvement,   unit  cost
reduction and value creation.

ART has expertise in applied  mineralogy,  mineral processing and environmental
technology.  In the growth area,  these skills are used to characterize new ore
bodies and verify  existing ones, or provide  alternative  processing  options.
Currently  much of this  work is  focused  on our oil  sands  projects  and the
Aqqaluk ore body at Red Dog. Continuous  improvement  projects are developed in
collaboration  with  operations  where value is created  through reduced costs,
improved recovery,  increased concentrate grade and other overall efficiencies.
New  technologies  are  applied to  improve  environmental  performance  at our
operations and mitigate potential  impacts.  Much of the work focuses on issues
related to water  treatment,  the potential for acid rock drainage and the safe
stabilization of deleterious elements.


-------------------------------------------------------------------------------
20    Teck 2008 Management's Discussion and Analysis
<PAGE>

FINANCIAL OVERVIEW

FINANCIAL SUMMARY

<TABLE>
<CAPTION>
====================================================================================================================================
 ($ in millions, except per share data)                                                   2008               2007            2006
------------------------------------------------------------------------------------------------------------------------------------
 REVENUE AND EARNINGS
<S>                                                                                   <C>              <C>               <C>
     Revenues                                                                         $    6,904       $    6,371        $    6,539
     Operating profit before depreciation and amortization                            $    2,895       $    3,071        $    3,825
     EBITDA                                                                           $    2,924       $    2,615        $    3,829
     Net earnings from continuing operations                                          $      677       $    1,661        $    2,395
     Net earnings                                                                     $      659       $    1,615        $    2,431
 CASH FLOW
     Cash flow from operations                                                        $    2,132       $    1,761        $    2,910
     Capital expenditures                                                             $      939       $      571        $      391
     Investments                                                                      $   12,298       $    3,911        $      272
 BALANCE SHEET
     Cash and temporary investments                                                   $      861       $    1,408        $    5,281
     Total assets                                                                     $   31,533       $   13,573        $   11,447
     Debt, including current portion                                                  $   12,874       $    1,523        $    1,509
 PER SHARE AMOUNTS
     Net earnings from continuing operations
        Basic                                                                         $     1.50       $  3.85           $     5.68
        Diluted                                                                       $     1.49       $  3.83           $     5.52
     Net earnings
        Basic                                                                         $     1.46       $  3.74           $     5.77
        Diluted                                                                       $     1.45       $  3.72           $     5.60
     Dividends declared per share                                                     $     0.50       $  1.00           $     1.00
====================================================================================================================================
</TABLE>

Our revenues and earnings depend on prices for the commodities we produce, sell
and use in our  production  processes.  Commodity  prices are determined by the
supply of and demand for raw materials, which are influenced by global economic
growth.  We normally  sell the products  that we produce at  prevailing  market
prices or at prices negotiated on annual contracts,  particularly metallurgical
coal. Prices for these products,  particularly for exchange-traded commodities,
can  fluctuate  widely and that  volatility  can have a material  effect on our
financial results.

We record our financial results using the Canadian dollar and accordingly,  our
operating results and cash flows are affected by changes in the Canadian dollar
exchange rate  relative to the  currencies  of other  countries.  Exchange rate
movements,  particularly  as they affect the US dollar,  can have a significant
impact on our  results  as a  significant  portion of our  operating  costs are
incurred in Canadian and other currencies and most of our debt and revenues are
denominated in US dollars.

Our net  earnings for 2008,  which  included  $856  million of after-tax  asset
impairment  losses,  were $659  million or $1.46 per share  compared  with $1.6
billion or $3.74 per share in 2007 and $2.4 billion or $5.77 per share in 2006.

Our earnings in 2008 were negatively  affected by non-cash  after-tax asset and
goodwill  impairment  charges  totalling  $856  million  taken  against (i) the
goodwill  related to the three copper mines we acquired  from Aur in 2007 ($345
million), (ii) the deferral of the upgrader portion of our Fort Hills oil sands
project ($90 million) (iii) our Lennard Shelf, Pend Oreille and

-------------------------------------------------------------------------------
                            Teck 2008 Management's Discussion and Analysis   21
<PAGE>

Duck Pond mines ($116 million),  (iv) our Petaquilla  copper project in Panama,
Santa Fe  nickel  project  in  Brazil  and other  exploration  properties  ($60
million) and (v) $245 million in respect of marketable  securities  that we own
in various  development  stage companies,  whose decline in value is considered
other-than-temporary. The Lennard Shelf zinc mine was closed in August 2008 and
the Pend Oreille zinc mine was put on care and maintenance in February 2009 due
to low zinc prices.

Prior to our  acquisition  of Fording's  coal assets,  we owned a 52% effective
interest in Teck Coal,  comprised  of a 40% direct  interest in Teck Coal and a
19.6% interest in the  outstanding  units of Fording.  These prior  investments
were acquired at a cost of approximately $1.3 billion.  Upon acquisition of the
additional  48%,  we  retained  independent  valuation  experts  from  a  large
international accounting firm to assist us in the allocation of our investments
to individual assets and liabilities.  This allocation resulted in $883 million
of  goodwill.  This  goodwill  arose  primarily  as a result of the  accounting
requirement  to record  the net  future  income and  resource  tax  liabilities
associated  with  the  Fording  purchase  on an  undiscounted  basis as well as
changes in expected  future coal prices and  US/Canadian  dollar exchange rates
between the date of the  acquisition  announcement in July 2008 and the closing
of the  acquisition  on October  30,  2008.  We  subsequently  tested  goodwill
relating to Teck Coal for impairment. This test compared the fair value of 100%
of these operations to our carrying value as a whole and takes into account the
lower cost base for our  pre-existing  interest.  Based on expected future cash
flows from 100% of the coal  operations,  the estimated  fair value of the coal
assets exceeds the carrying amount; therefore, we have determined that goodwill
relating to Teck Coal is not impaired.

In  addition,   2008  earnings   included  $329  million  of  negative  pricing
adjustments brought about by the sharp decline in base metal prices,  occurring
mainly in the fourth quarter of the year.

Our  earnings in 2007 were  affected by a $33 million  equity loss ($50 million
pre-tax)  related to our  investment  in the Galore  Creek  project  where mine
construction  was  suspended  due to  escalating  capital costs and a number of
asset write downs totalling $51 million after taxes. The equity loss represents
our after-tax share of the Galore Creek partnership's estimated  demobilization
costs.  The asset  write  downs  relate  to our  investment  in Tahera  Diamond
Corporation,  which was written down due to the severe  financial  difficulties
facing the company.  Due to difficult mining conditions and low ore grades that
impacted their ongoing  profitability,  we also wrote down the property,  plant
and equipment at our Pend Oreille and Lennard  Shelf zinc mines.  We also had a
$59 million  cumulative foreign exchange loss related to the repatriation of US
dollars to Canada to provide  funds for our  acquisition  of Aur. We also had a
$46  million  loss on our  contingent  receivable  related  to the  sale of our
Cajamarquilla refinery compared with a $36 million gain in 2006.

In addition,  we recorded after-tax negative pricing adjustments of $66 million
during 2007 compared with $113 million of positive  adjustments in 2006. An $80
million gain on the reduction of future tax liabilities due to the reduction in
federal income tax rates in Canada and after-tax  gains of $36 million on asset
sales partially offset these effects.

Our 2006 net earnings  included  after-tax gains of $126 million on the sale of
investments, including $103 million on the sale of our investment in Inco.


-------------------------------------------------------------------------------
22    Teck 2008 Management's Discussion and Analysis
<PAGE>

The table below shows the impact of these items on our earnings.

<TABLE>
<CAPTION>
                                                                                    2008                2007               2006
===================================================================================================================================
<S>                                                                           <C>                 <C>                <C>
 Net earnings as reported                                                     $      659          $    1,615         $     2,431
 Add (deduct) the after-tax effect of:
 Derivative (gains) losses, including
          discontinued operations                                                   (167)                 32                 (36)
 Asset impairment and equity losses                                                  266                  84                   -
 Goodwill impairment                                                                 345                   -                   -
 Impairment of marketable securities                                                 245                   -                   -
 Asset sales and other                                                                73                 (36)               (126)
 Realization of cumulative translation adjustment loss                                 -                  59                   -
 Tax items                                                                           (50)                (80)                (26)
 ----------------------------------------------------------------------------------------------------------------------------------
                                                                                      712                  59               (188)
 ----------------------------------------------------------------------------------------------------------------------------------
  Adjusted net earnings *                                                           1,371               1,674              2,243
 Negative (positive) pricing adjustments                                              329                  66               (113)
 ----------------------------------------------------------------------------------------------------------------------------------
 COMPARATIVE NET EARNINGS *                                                   $    1,700          $     1,740         $    2,130
===================================================================================================================================
</TABLE>
*    Adjusted net earnings and comparative net earnings are non-GAAP  financial
     measures.  See Use of  Non-GAAP  Financial  Measures  section  for further
     information.

Pricing  adjustments  generally  increase  earnings in a rising commodity price
environment and decrease earnings in a declining price environment.  They are a
normal part of our business but we exclude  them from  comparative  earnings in
the table above to provide a better understanding of how our company performed.

In the latter part of 2008 general  conditions in credit  markets  deteriorated
substantially, which had a serious impact on the global economy and contributed
to a  significant  and rapid decline in the demand for and selling price of our
products.  Average  base metal  prices  were down  significantly  in the fourth
quarter of 2008,  with two of our major  products,  copper  and zinc,  dropping
significantly  from prices at the end of September 2008,  resulting in negative
pricing  adjustments  of $474 million  ($270  million  after-tax) in the fourth
quarter alone.

Our earnings in 2008 before  non-recurring  items and pricing  adjustments were
$1.7 billion  compared with $1.7 billion in 2007 and $2.1 billion in 2006.  Net
earnings for 2008 were $659 million compared with $1.6 billion in 2007 and $2.4
billion in 2006.

Earnings  were lower in 2008 due mainly to lower  earnings  from our copper and
zinc business units as a result of the lower average base metal prices,  with a
significant  portion of the decline coming in the last half of the year and the
asset  impairment  charges that we recorded in the fourth  quarter of the year.
This was partially  offset by a substantial  increase in operating  profit from
our coal business unit due to the  significant  increase in coal prices and our
acquisition of Fording's 60% interest in Teck Coal in October 2008.

Cash flow from operations in 2008,  before changes in non-cash  working capital
items,  was $3.7 billion compared with $2.0 billion in 2007 and $2.6 billion in
2006. The changes in cash flow from operations are due mainly to the volatility
in commodity  prices and changes in the  Canadian/US  dollar  exchange rate. In
2008, our earnings  included a $1.5 billion  non-cash  future tax provision and
$881 million of non-cash asset impairment  charges and a provision  against our
marketable  securities.  The decrease in 2007 from 2006 was mainly due to lower
zinc and coal prices and the strengthening of the Canadian dollar.

Cash flow from  operations,  after changes in non-cash  working  capital items,
less scheduled debt repayments,  dividends and sustaining capital expenditures,
was $1.3 billion in 2008 compared with $1.1 billion in 2007 and $2.1 billion in
2006.  At December  31,  2008,  our cash and  temporary  investments  were $861
million.  Total debt was $12.9 billion and our debt to  debt-plus-equity  ratio
was 54% compared with 16% at December 31, 2007.

-------------------------------------------------------------------------------
                            Teck 2008 Management's Discussion and Analysis   23
<PAGE>

OPERATING PROFIT

Our  operating   profit  is  made  up  of  our  revenues  less  the  operating,
depreciation and amortization expenses at our producing operations.  Income and
expenses from our business  activities that do not produce commodities for sale
are included in our other income and expenses.

Our principal commodities are copper,  metallurgical coal, zinc and gold, which
accounted for 27%, 35%, 15% and 5% of revenues respectively in 2008. Molybdenum
is a significant by-product of our copper operations, and lead is a significant
by-product of our zinc operations, respectively accounting for 3% and 5% of our
2008  revenues.  In addition,  our Antamina  copper mine produces a significant
volume of zinc  concentrate.  Other  products  produced  at various  operations
include  silver,  various  specialty  metals,  chemicals and  fertilizers,  and
electricity, and in total accounted for 10% of our revenue in 2008.

Our  acquisitions  of Aur in August 2007 and the Fording coal assets in October
2008 had a significant impact on our revenues, operating expenses and operating
profits.  In 2008,  our results  included a full year of results from the three
mines we acquired  from Aur  compared  with just over four  months in 2007.  In
addition,  our 2008 operating  profit  includes our 40% share of the results of
Teck Coal until the end of October and 100%  thereafter  compared with only our
40%  direct  interest  for all of 2007.  Accordingly,  these  two  acquisitions
account for a portion of the  increase in  revenues,  operating  expenses,  and
depreciation and amortization.  Our operating profit was negatively affected by
the decline in base metal prices that occurred during 2008.


2008 REVENUE BY DIVISION    2008 REVENUE BY COMMODITY     2008 OPERATING PROFIT
                                                              BY DIVISION*
[GRAPHIC OMITTED]               [GRAPHIC OMITTED]          [GRAPHIC OMITTED]


                           2008 Revenue by Division
                           ------------------------

                                     2007             2008
                  -----------------------------------------
                  Copper            2,186            2,156
                  Zinc              3,052            2,071
                  Coal                951            2,428
                  Gold                182              249

                           2008 Revenue by Commodity
                           -------------------------

                                     2007             2008
                  -----------------------------------------
                  Copper           1,753            1,827
                  Moly               222              182
                  Zinc             1,995            1,056
                  Lead               605              373
                  Coal               952            2,428
                  Gold               229              332
                  Other              615              706

                      2008 Operating Profit by Division*
                      ----------------------------------

                                     2007             2008
                  -----------------------------------------
                  Copper            1,459            1,146
                  Zinc              1,328              439
                  Coal                249            1,226
                  Gold                 35               84
                  -----------------------------------------
                                    3,071            2,895
                  =========================================

                  *  Before depreciation and amortization

Our  revenues  are  affected  by sales  volumes,  which are  determined  by our
production  levels and demand for the commodities we produce,  commodity prices
and currency exchange rates.

Our consolidated  revenues were $6.9 billion in 2008 compared with $6.4 billion
in 2007 and $6.5 billion in 2006.  Our 2008 revenues  increased by $502 million
as a result of  having a full year of  revenue  from the three  mines  acquired
through  our  acquisition  of Aur and the effect of  significantly  higher coal
prices  and 100% of the  revenues  of Teck Coal for the last two  months of the
year.  This was  partially  offset by the decline in average base metal prices,
particularly  copper,  zinc and lead in the fourth quarter of 2008 resulting in
significant negative pricing adjustments and lower zinc sales volumes.

At December 31, 2007,  outstanding  receivables  included 180 million pounds of
copper  provisionally  valued at an average of US$3.04  per pound,  296 million
pounds of zinc valued at an average of US$1.05 per pound and 74 million  pounds
of lead provisionally  valued at an average of US$1.15 per pound.  During 2008,
the copper  receivables  were settled at an average  final price of US$3.55 per
pound,  zinc  receivables were settled at an average final price of US$1.08 per
pound and lead at US$1.25  per pound,  resulting  in positive  after-tax  final
pricing  adjustments  of  $57  million  in  the  year  compared  with  negative
adjustments  of  $56  million  in  2007.  We  also  recorded  negative  pricing
adjustments  of $386  million for sales  recorded  during  2008,  most of which
occurred  in the fourth  quarter due to the  significant  decline in base metal
prices.  At December 31,  2008,  outstanding  receivables  included 164 million
pounds of copper  provisionally  valued at an average of US$1.40 per pound, 195
million pounds of zinc valued at an average of US$0.54 per pound and 45 million
pounds of lead valued at an average of US$0.42 per pound.

-------------------------------------------------------------------------------
24    Teck 2008 Management's Discussion and Analysis
<PAGE>

Our  operating  costs  include  all of the  expenses  required  to produce  our
products, such as labour, energy, operating supplies, concentrates purchased at
our Trail  refining  and  smelting  operation,  royalties,  and  marketing  and
distribution  costs  required  to sell and  transport  our  products to various
delivery points. Due to the geographic locations of many of our operations,  we
are highly dependent on third parties for the provision of rail, port and other
distribution  services. In certain  circumstances,  we negotiate prices for the
provision of these services where we may not have viable  alternatives to using
specific  providers,   or  may  not  have  access  to  regulated   rate-setting
mechanisms.  Contractual  disputes,  demurrage charges,  rail and port capacity
issues,  availability  of vessels  and  railcars,  weather  problems  and other
factors can have a material  effect on our ability to transport  materials from
our suppliers and to our customers in accordance with schedules and contractual
commitments.

The  magnitude  of our  operating  costs is dictated  mainly by our  production
volumes, the costs of labour,  operating supplies and concentrate purchases; by
strip  ratios,  haul  distances  and ore  grades;  and by  distribution  costs,
commodity  prices  and  costs  related  to  non-routine  maintenance  projects.
Production  volumes mainly affect our variable  operating and our  distribution
costs.  In addition,  production  may also affect our sales  volumes and,  when
combined with  commodity  prices,  affects  profitability  and  ultimately  our
royalty expenses.

Our operating expenses were $4.0 billion in 2008, compared with $3.3 billion in
2007 and $2.7  billion  in 2006.  Like  many of our  competitors,  we have been
facing  rising  costs  for  labour,  fuel and  energy,  consumables  and  other
operating  supplies.  In  addition  to  general  cost  increases,   significant
increases in our 2008 operating expense include $236 million from having a full
year of expenses  from the three mines  acquired  from Aur in August 2007,  and
$173 million  related to an extra two months of expenses for the additional 60%
of Teck Coal that we acquired from Fording on October 30, 2008.

We determine our depreciation  and amortization  expense using various methods.
Plant and equipment are depreciated and amortized on a straight-line basis over
their estimated useful lives at our refining and smelting  operations in Trail.
Plant  and   processing   facilities   at  our  mines   are   amortized   on  a
units-of-production  basis  over  the  lesser  of  their  useful  lives  or the
estimated proven and probable ore reserves. Mobile equipment is depreciated and
amortized using operating  hours and buildings,  and other site  infrastructure
over  their  estimated   useful  lives.   Accordingly,   our  depreciation  and
amortization expense varies to some degree with our production volumes. In 2008
our  depreciation  expense was $513 million  compared with $333 million in 2007
and  $264  million  in  2006.  The  main  reasons  for the  increase  were  our
acquisitions  of Aur in August  2007 and the  Fording  assets in October  2008.
These two  acquisitions  resulted in an additional $170 million of depreciation
and amortization compared with 2007.

OTHER EXPENSES

<TABLE>
<CAPTION>
==================================================================================================================================
($ in millions)                                                                           2008               2007             2006
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                    <C>                <C>              <C>
General and administrative                                                                $ 89            $   109          $    96
Interest and financing                                                                     182                 85               97
Exploration                                                                                135                105               72
Research and development                                                                    23                 32               17
Asset impairment                                                                           589                 69                -
Other expense (income)                                                                     (31)              (170)            (316)
Provision for income and resource taxes                                                    658                795            1,213
Non-controlling interests, net of tax                                                       82                 47               19
Equity loss (earnings), net of tax                                                         (22)                 5              (32)
Loss (earnings) from discontinued operations, net of tax                                    18                 46              (36)
----------------------------------------------------------------------------------------------------------------------------------
                                                                                       $ 1,723            $ 1,123          $ 1,130
==================================================================================================================================
</TABLE>

General and  administration  expense was $89 million in 2008 compared with $109
million  in 2007 and $96  million  in 2006.  The  decrease  is mainly  due to a
decline in our share  price,  which  resulted in a reduction of our stock based
compensation  expense. The increase in 2007 over 2006 was due to an increase in
general business activities.

Our interest expense of $182 million in 2008 was significantly  higher than the
$85 million for 2007, due mainly to the additional  debt we incurred to finance
our  acquisition  of Fording's  coal assets.  Interest  expense in 2007 was $12
million  lower than 2006 due to our lower average debt levels,  lower  interest
rates and the strengthening of the Canadian dollar.

-------------------------------------------------------------------------------
                            Teck 2008 Management's Discussion and Analysis   25
<PAGE>

We must  continually  replace  our  reserves  as they are  depleted in order to
maintain  production levels over the long term. We endeavour to do this through
our exploration and development program and through acquisition of interests in
new  properties  or in  companies  that own such  properties.  Exploration  for
minerals and oil and gas is highly  speculative  and the projects  involve many
risks. The vast majority of exploration projects are unsuccessful and there are
no assurances  that current or future  exploration  programs will find deposits
that are ultimately brought into production.

Our main  exploration  efforts in 2008 were focused on copper in North America,
South America,  and Namibia and zinc in Alaska,  Australia and Ireland. We also
participated in several equity  financings with junior companies  exploring for
the same commodities in favourable jurisdictions.  Exploration expense was $135
million in 2008  compared  with $105  million in 2007 and $72  million in 2006.
Increased exploration  activities and the increase in costs of contractors were
the main reasons for the rising exploration  expense in 2008 and 2007. The 2008
expenditures  include development  projects such as Quebrada Blanca,  Relincho,
Mesaba and  Carrapateena  (totalling  approximately  $44  million) and seafloor
exploration ($16 million).

Our  research  and  development  expenditures  are  focused  on  advancing  our
proprietary CESL hydrometallurgical technology, the development of internal and
external  growth  opportunities,  and the  development  and  implementation  of
process and environmental  technology improvements at operations.  In 2008, our
research  and  development  expenditures  were $23  million  compared  with $32
million in 2007 and $17 million in 2006.

Asset  impairment  charges  totalling  $589 million  before taxes  included the
following:

o    $345 million of goodwill arising out of the acquisition of Aur Resources,

o    $179 million in respect of our Duck Pond,  Lennard  Shelf and Pend Oreille
     mines.  The Lennard  Shelf mine ceased  operations in August 2008 and Pend
     Oreille was put on care and maintenance in February 2009, and

o    $22 million to write-off our investment in the  Petaquilla  copper project
     in Panama,  $35 million on the Santa Fe nickel  project in Brazil,  and $8
     million for other exploration properties.

The asset  impairment  charges in 2007 were taken against the Lennard Shelf and
Pend Oreille zinc mines and our  investment  in Tahera  Diamonds,  which sought
creditor  protection  in  early  2008  and has been  operating  under  Canada's
Companies' Creditors Arrangement Act since that time.

Other  income,  net of other expense was $31 million in 2008 compared with $170
million in 2007 and $316  million  in 2006.  Other  income and  expense in 2008
included $285 million of gains on our derivative contracts,  mainly from copper
and zinc  contracts,  $56 million of interest  income and a $69 million foreign
exchange  translation  gain.  This  was  partially  offset  by $71  million  of
reclamation  and  environmental  expenses  and a $292  million  write  down  of
marketable securities that we own in various development stage companies, whose
decline in value is  considered  other-than-temporary.  These  investments  are
marked to market each period through other comprehensive income and this charge
represents a transfer from other  comprehensive  income to regular earnings and
does not affect their  carrying  value or our  shareholders'  equity.  In 2007,
interest  income was $177 million and we had $55 million of gains from the sale
of investments.  With the decline in the zinc price in the latter part of 2007,
our  derivative  liability on the Duck Pond zinc  positions  was reduced by $53
million.  Offsetting  this other  income was a $59 million  cumulative  foreign
exchange  loss related to the  repatriation  of US dollars to Canada to provide
funds for the  acquisition  of Aur,  $26 million of  reclamation  at our closed
operations  and $25 million on non-hedge  derivative  losses mainly on our gold
positions.

Income  and  resource  taxes  were  $658  million  in 2008,  or 47% of  pre-tax
earnings.  This is substantially higher than the Canadian statutory tax rate of
31% as there is no tax recovery for our write downs related to goodwill and the
write  downs  of our  investments  are  taxed  at lower  capital  gains  rates.
Offsetting  these  items  were net tax  items  of $50  million  related  to the
resolution  of  previously   uncertain  tax  provisions  and  income  tax  rate
reductions.

Our non-controlling  interest expense relates to the ownership interests in our
Highland Valley,  Quebrada  Blanca,  Carmen de Andacollo and Elkview mines that
are held by third parties.  The $35 million  increase in 2008 was due mainly to
our partners  sharing in a full year of earnings  from the Quebrada  Blanca and
Carmen de Andacollo  mines  compared  with just over three months in 2007 as we
acquired those mines from Aur in late August 2007. The minority partners in the
Elkview mine also benefitted from the higher 2008 coal year prices.

-------------------------------------------------------------------------------
26    Teck 2008 Management's Discussion and Analysis
<PAGE>

We account for our investments in Fording (until October 30, 2008),  Fort Hills
Limited  Partnership and the Galore Creek  Partnership using the equity method.
In September 2007, we increased our interest in Fording to 19.95% by purchasing
an additional  16.65 million units for $599 million.  Our equity  earnings from
Fording were $89 million in 2008,  $28 million in 2007 and $32 million in 2006.
2008  includes  our share of  earnings  until we acquired  Fording's  assets on
October  30,  2008.  The  increase  over 2007 was due to our  higher  ownership
interest for the entire year and the substantial  increase in coal prices. This
increase  was  partially  offset by foreign  exchange  losses.  Our 2008 equity
earnings from the Galore Creek  Partnership was $18 million compared with a $33
million  equity  loss in 2007  related  to our  share of  demobilization  costs
resulting  from the  decision  to  suspend  construction  of the  Galore  Creek
project.  Demobilization  activities  have gone  better  than  expected in 2008
resulting in a reduction of the  provision  for these costs,  which is the main
reason for the equity  earnings in 2008.  The equity  earnings from Fording and
Galore were offset by an $85 million  equity loss from our  investment  in Fort
Hills. The equity loss from Fort Hills related to asset impairment charges as a
result of the  deferral of the  upgrader  portion of the  project and  contract
termination charges.

Our  earnings  from  discontinued  operations  relate to a price  participation
provision in a 2004 agreement to sell our Cajamarquilla  zinc refinery.  We are
entitled to additional  consideration  of US$365,000  for each US$0.01 by which
the average  annual price of zinc exceeds  US$0.454 per pound.  This zinc price
participation  expires at the end of 2009.  The changes  between  2006 and 2008
relate  primarily  to  changes  in the  zinc  price  and new  accounting  rules
implemented  in 2007.  In 2006, we accrued $36 million,  net of taxes,  for the
additional  consideration  based on the average annual zinc price for the year.
Effective  January 1, 2007,  upon adoption of the new  accounting  standard for
financial  instruments,  we recorded an asset of $139 million by increasing our
retained  earnings in respect of the  contingent  receivable,  which was valued
based on the zinc price  forward  curve at December 31, 2006.  The new standard
for financial  instruments required us to mark this receivable to market at the
end of each quarter.  With the decline in the zinc price that  occurred  during
2007 from historical highs in late 2006, the mark-to-market  adjustment in 2007
resulted in a $46 million  after-tax  reduction in the  receivable and with the
continuing decline in the zinc price, the mark-to-market adjustment in 2008 was
$18 million.  In January 2007, we received  approximately US$36 million for the
2006 price participation payment and in January 2008 we received  approximately
US$38 million for the 2007 payment. The amount due for 2008 is US$14 million.

FINANCIAL POSITION AND LIQUIDITY

Our  primary  sources  of  liquidity  and  capital  resources  are our cash and
temporary investments,  cash flow provided from operations,  including expected
tax refunds,  and the proceeds of potential asset sales,  which must be used to
pay down our bridge facility.

Our cash position  decreased during the year by $558 million to $850 million at
December  31,  2008.  During  2008,  funds on hand  and  funds  generated  from
operations were reinvested in capital equipment,  investments and our oil sands
projects in the amount of $1.6 billion. We also paid down debt of approximately
$1.2  billion,   including  $374  million   assumed  as  part  of  the  Fording
transaction.  The cash portion of the Fording  transaction  was fully funded by
the new bridge and term facilities.

Total debt  balances  were $12.9  billion at December 31, 2008,  of which $11.2
billion  (US$9.3  billion)  relates to the  financing  incurred  to acquire the
Fording  assets,  $7.8  billion  of the debt is due in  2009.  We also had bank
credit  facilities  aggregating  $1.3 billion,  97% of which mature in 2012 and
beyond.  Our unused credit lines under these  facilities after drawn letters of
credit amounted to $1.1 billion.  Our senior  unsecured debt is currently rated
Ba3 by  Moody's  Investor  Services,  BBB- by  Standard  and  Poor's and BBB by
Dominion Bond Rating Service, all with negative outlooks.

OPERATING CASH FLOW

Cash flow from  operations  was $2.1 billion in 2008 compared with $1.8 billion
in 2007 and $2.9 billion in 2006. Factors which affected cash flow included the
effect of sharp declines in commodity prices,  which led to pricing adjustments
on our receivables of $255 million from September to December, inclusive.

The  acquisition  of Fording's  assets also added directly to our cash flows in
November and December  2008.  Operating  profits from the acquired  assets were
$186 million in the year,  which  included a non-cash  charge against income of
$188 million related to acquisition accounting for inventories. These valuation
adjustments  reduced our recorded earnings from sales of acquired  inventories,
but not our cash flow. In addition,  as part of the  acquisition of the Fording
assets,  we assumed US$1.4 billion of US dollar forward sales contracts with an
average exchange rate of C$1.01 per US$1.00. Settlement of these contracts used
$123 million of cash in the fourth quarter of 2008.

-------------------------------------------------------------------------------
                            Teck 2008 Management's Discussion and Analysis   27
<PAGE>

INVESTING ACTIVITIES

Capital  expenditures  were $939 million in 2008 and  included  $394 million on
sustaining capital, $358 million on development projects,  $137 million for the
acquisition  of  the  Relincho   copper  project  (plus  6.9  million  Class  B
subordinate  voting  shares  valued at $287  million)  and $50  million  on our
non-Fort  Hills oil sands  properties.  The largest  components  of  sustaining
expenditures  were $118  million at Teck Coal,  $50  million at  Antamina,  $48
million at Red Dog and $44 million at Trail.  Development expenditures included
$170  million for  preparatory  stripping  and capital  equipment  for Highland
Valley Copper's mine life extension project and $178 million on the development
of the hypogene deposit at Carmen de Andacollo.

Investments in 2008 totalled $12.3 billion,  of which $11.6 billion was for the
acquisition  of the Fording  assets and $505 million was our share of costs for
our investments in Fort Hills and the Galore Creek project.

FINANCING ACTIVITIES

The major financing activity in 2008 was the debt incurred to partially finance
our acquisition of Fording's assets in October 2008. The acquisition  financing
included a US$5.8 billion  364-day  bridge  facility due October 29, 2009 and a
US$4 billion three year  amortizing  term loan  facility  repayable in 11 equal
quarterly  instalments  starting in April  2009.  During the last two months of
2008, we repaid US$460  million  ($573  million) on the bridge  facility and we
paid US$150 million ($183 million) to retire the revolving credit facility that
we assumed upon our  acquisition of Aur Resources in 2007. The repayment of the
Aur revolving  credit  facility in the third quarter,  released  US$153 million
($187 million) of cash  collateral that was held as security for that facility,
which we previously  included in other assets on our balance sheet as this cash
was not available for general corporate purposes.  In addition,  we also repaid
US$305 million ($374  million) of long-term debt we assumed on the  acquisition
of  Fording  and  $98  million  of  the  6.75%  debentures  we  assumed  on our
acquisition of Aur.

LIQUIDITY RISK

On September 30, 2008, we entered into definitive  financing agreements related
to bridge and term loan facilities and the conditions precedent to our purchase
of the assets of the Fording  Canadian Coal Trust  ("Fording") and our lenders'
funding  obligations were  substantially  satisfied.  Our original plan for the
acquisition  was  to  refinance  a  substantial   portion  of  the  acquisition
facilities  prior to or shortly after closing of the  transaction  with various
types of long-term  debt and to repay the balance with cash flow from operating
activities prior to the maturity of the term facility. In the fourth quarter of
2008 and prior to the  closing  of the  transaction,  conditions  in the credit
markets deteriorated  substantially,  effectively closing the credit markets to
us. These credit market  conditions had a serious impact on the global economy,
which has  contributed to a significant and rapid decline in the demand for and
selling  price of the base  metal  products  we  produce.  As a result of these
conditions, which have continued into 2009, our credit ratings were lowered and
our share price has declined substantially.

Current weak global economic conditions and the downgrade in our credit ratings
make  access to the credit and  capital  markets  difficult  for us,  which may
compromise  our  ability  to  repay  or  refinance  all  or a  portion  of  the
acquisition  loans as they become due. We are currently in compliance  with the
financial covenants under our credit agreements, which establish a maximum debt
to total  capitalization ratio of 60% at the end of each calendar quarter until
it declines to 50% at  September  30, 2009.  At December 31, 2008,  our debt to
total  capitalization  ratio  was  54%.  To  maintain  our  current  production
forecasts for 2009, we expect capital spending of approximately $500 million in
2009 and with the  re-scaling of that project,  our  contributions  to the Fort
Hills Energy  Limited  Partnership  are expected to decline to $330 million for
our share of the remaining  costs  necessary to get to a sanctioning  decision.
Based on expected  free cash flow we will not  generate  sufficient  funds from
operations to repay the entire obligation on the bridge facility that is due on
October 29, 2009,  and will need to generate funds from other sources to do so,
or will need an extension or refinancing of the bridge loan.

As at December 31, 2008, US$5.3 billion of the bridge facility and US$4 billion
of the term facility were  outstanding.  All of the bridge  facility and US$1.1
billion of the term facility is due on or before October 29, 2009.

To address our near-term liquidity requirements, we have begun discussions with
our lenders to negotiate  amendments to the bridge  facility to provide us with
additional time to generate cash and/or access appropriate sources of long-term
financing to repay the bridge  facility.  There can be no assurance  that these
negotiations will be successful.  We have also taken a number of other steps to
assist us in  meeting  our  repayment  obligations,  including  suspending  the
dividends on

-------------------------------------------------------------------------------
28    Teck 2008 Management's Discussion and Analysis
<PAGE>

our Class A common and Class B subordinate voting shares,  reducing capital and
discretionary  spending,  expediting  tax  refunds  of  $1.1  billion,  closing
unprofitable  operations  and  reducing  the size of our  global  workforce  by
approximately  13%. To date we have sold our  interest in the  Lobo-Marte  gold
property for US$40 million and 5.6 million Kinross  shares,  and have announced
the sale of our interest in the Hemlo mines for US$65  million and our indirect
interest in a Peruvian  company,  Sociedad  Minera El Brocal S.A.A.,  for US$35
million.  We are also pursuing  other  potential  asset sales.  There can be no
assurance that we will be able to complete further  sufficient asset sales on a
timely basis.

Our ability to repay or refinance the bridge facility prior to its maturity and
make the quarterly instalment payments on the term facility depends on a number
of factors, some of which are beyond our control.  These include general global
economic, credit and capital market conditions,  and the demand for and selling
price of our  products,  in  particular  metallurgical  coal.  There  can be no
assurance that our credit ratings will not be downgraded  further,  which would
further  increase  our costs of  borrowing  and  further  limit our  ability to
refinance our existing debt. There is no assurance that the expected cash flows
from  operations  in  combination  with asset sales and other steps being taken
will  allow us to meet  these  obligations  as they  become  due,  that we will
continue to meet the financial  covenants under our various lending agreements,
or that we will be  successful  in  renegotiating  or  refinancing  the  bridge
facility.  Accordingly,  it is  possible  that we  could be in  default  of our
various  lending  agreements  prior to the end of 2009,  which could  result in
outstanding  obligations  becoming  immediately  due and payable  unless we can
obtain waivers from the lenders.

Although  we have  approximately  $1.1  billion in unused  credit  lines  under
various bank credit  facilities,  there can be no assurance,  given our current
financial  condition,  that these  credit  lines will be  available to us if we
should need to draw on them, or that our maturing credit lines of US$50 million
and  miscellaneous  letters of credit totalling $258 million will be renewed in
the ordinary  course.  Our existing debt obligations will constrain our capital
spending and that may have an adverse effect on our operations. Our debt levels
will also limit our ability to expand our operations or make other  investments
that would enhance our competitiveness.

In a cyclical industry such as ours,  history has shown that periodic spikes in
commodity  prices can result in  substantial  increases in our  company's  cash
flow.  Many of our major  operations  are  long-life  assets  with  significant
reserves  and  resources  and have lives  exceeding  20 years  based on current
production  levels.  If we are to realize the benefit of the economic  recovery
when it occurs,  we must more closely  match the term of our debt  structure to
the life of our  assets.  We  believe  that our access to  financial  resources
through  capital  markets  transactions  has  been  limited  mainly  due to the
effective  closure of the  capital  markets  brought  about by the  significant
deterioration  in the  financial  markets in the latter half of 2008,  which we
believe has also  contributed to the significant  decline in the demand for and
selling price of our products.  Accordingly,  there is some risk that the steps
described above will not be successful in allowing us to meet our  obligations,
which may require us to sell core assets or raise debt or equity capital, which
management  believes  would enable us to satisfy our  obligations  as they fall
due. However,  these actions may have a material adverse effect on our business
and on the market prices of our equity and debt securities.

<TABLE>
<CAPTION>
QUARTERLY EARNINGS AND CASH FLOW

=========================================================================================|==========================================
(in millions except for per share data)                           2008                   |                    2007
-----------------------------------------------------------------------------------------|------------------------------------------
                                               Q4            Q3         Q2         Q1    |    Q4          Q3         Q2         Q1
-----------------------------------------------------------------------------------------|------------------------------------------
<S>                                          <C>          <C>         <C>        <C>        <C>         <C>        <C>        <C>
Revenues                                     $1,663       $1,800      $1,870     $1,571  |  $1,538      $1,932     $1,561     $1,340
Operating profit before depreciation and                                                 |
   amortization                                 372          817         984        722  |     568         987        832        684
Net earnings (loss)                            (607)         424         497        345  |     280         490        485        360
Earnings (loss) per share                     (1.28)        0.95        1.12       0.78  |    0.64        1.15       1.14       0.83
Cash flow from operations                       598          873         500        161  |     602         814        193        152
=========================================================================================|==========================================
</TABLE>

In the fourth quarter of 2008 general conditions in credit markets deteriorated
substantially, which had a serious impact on the global economy and contributed
to a  significant  and rapid decline in the demand for and selling price of our
products. Average base metal prices were down significantly from average prices
in the fourth quarter of 2007, with two of our major products, copper and zinc,
down 45% and 55% respectively. The decline in prices was most pronounced in the
fourth quarter,  and resulted in negative  pricing  adjustments of $474 million
($270 million after-tax).

-------------------------------------------------------------------------------
                            Teck 2008 Management's Discussion and Analysis   29

<PAGE>

Revenues from  operations were $1.7 billion in the fourth quarter of 2008, $125
million  higher  than  the  comparable  period  in  2007.  Revenues  from  coal
operations  increased by $845 million,  with $561 million  attributable  to our
increased  ownership interest in Teck Coal and the balance due to significantly
higher coal prices  compared with a year ago. This was offset by  significantly
lower copper and zinc prices and negative  pricing  adjustments of $474 million
(before $38 million of royalty  charge  recoveries)  recorded by our copper and
zinc operations.

Despite the challenging global economic  conditions,  we generated $598 million
of cash from  operating  activities.  Fourth quarter  earnings were  negatively
affected by after-tax,  non-cash asset and goodwill  impairment charges of $844
million and negative  pricing  adjustments of $270 million brought about by the
sharp  decline  in  commodity  prices.  The net loss for the  quarter  was $607
million, or $1.28 loss per share.

Our copper business unit generated an operating profit before  depreciation and
negative  pricing  adjustments of $205 million in the fourth  quarter  compared
with $367 million in 2007.  Copper prices declined sharply by approximately 50%
since the end of the  third  quarter,  resulting  in $335  million  (2007 - $90
million)  of  negative  copper  pricing  adjustments.  After  depreciation  and
negative  pricing  adjustments,  the copper business unit incurred an operating
loss of $214  million  compared  with a $235  million  operating  profit in the
fourth quarter of 2007.  This does not include gains  totalling $199 million on
our  copper  derivative  contracts,  which are  included  in other  income  and
expenses.

Operating   profit  from  our  coal  business  unit  was  $516  million  before
depreciation  in the  fourth  quarter,  which  included  one month of  earnings
reflecting  our 40%  interest in Teck Coal and two months  reflecting  our 100%
interest  starting from October 30, 2008, our  acquisition  date of the Fording
assets.  Deducted from operating profits in the fourth quarter was $188 million
as a one-time fair value adjustment made to coal inventories on the acquisition
of Fording.  The revaluation  established a higher value for coal  inventories,
based on current contract prices at the date of acquisition. The adjustment did
not affect cash flows.  On a 100% basis,  coal sales  volumes  were 4.7 million
tonnes in the fourth quarter  representing a 22% decline from the same period a
year ago, as our customers  significantly reduced their coal deliveries in late
2008 in response to lower steel  production.  Coal prices  averaged  US$247 per
tonne  which was  significantly  higher  than US$93 per tonne  realized  in the
fourth quarter of 2007, but lower than our settled 2008 coal year average price
of US$275 per  tonne.  This  resulted  from the sale of  approximately  500,000
tonnes of lower priced thermal and residual 2007 coal year tonnages sold in the
quarter at lower prices.

The operating profit before  depreciation and pricing adjustments from our zinc
business unit was $62 million in the quarter  compared with $283 million in the
fourth quarter of 2007, mainly as a result of significantly lower zinc and lead
prices and lower zinc sales  volumes.  Our $82  million  operating  loss in the
fourth quarter included $101 million of negative pricing  adjustments  compared
with $52 million in the fourth quarter of 2007. The Trail metallurgical complex
reduced its refined zinc production by approximately  4,000 to 5,000 tonnes per
month  effective in late  November in response to poor market  conditions.  The
duration of this curtailment will depend on market conditions,  but will likely
continue  for at least six months.  In addition,  we announced in  mid-December
that due to reduced metal demand and  persistent  weakness in zinc prices,  the
Pend  Oreille  mine  will be  placed  on  care  and  maintenance  by the end of
February,  2009.  Gains totalling $45 million on our zinc derivative  contracts
are included in other income and expense.

Our gold business  unit  performed  well in the fourth  quarter and provided an
operating  profit of $12 million in the quarter compared with $8 million in the
same  period a year ago.  The  increase in  operating  profit was due to higher
realized gold prices.

OUTLOOK

The  information  below is in addition to the  disclosure  concerning  specific
operations included above in the Operations and Corporate  Development sections
of this document and in addition to the  discussion  of our ongoing  efforts to
refinance the debt incurred on the  acquisition of Fording's  assets  described
above under the heading "Financial Position and Liquidity".

GENERAL ECONOMIC CONDITIONS

Current problems in credit markets and deteriorating global economic conditions
have led to a  significant  weakening of exchange  traded  commodity  prices in
recent  months,  including  base metal prices.  Volatility in these markets has
also been  unusually  high.  It is  difficult in these  conditions  to forecast
commodity prices or customer demand for our products.  Credit market conditions
have also increased the cost of obtaining  capital and limited the availability
of funds.  Accordingly,  management  is  reviewing  the  effects of the current
conditions on our business.

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30    Teck 2008 Management's Discussion and Analysis
<PAGE>

COMMODITY PRICES AND 2009 PRODUCTION

Commodity prices are a key driver of our earnings and despite the sharp decline
in metal and commodity prices that occurred in the second half of 2008, current
prices are still above  historic  averages.  On the supply side,  the depleting
nature of ore  reserves,  difficulties  in finding new ore bodies,  progressing
through the permitting process,  finding skilled resources to develop projects,
infrastructure  constraints and significant cost inflation may continue to have
a  moderating  impact  on the  growth  in future  production.  Although  we are
concerned about current global economic conditions,  particularly in the United
States,  we believe that,  over the longer term, as China and India continue to
industrialize,  those two economies will continue to be major positive  factors
in the future  demand for  commodities.  We believe  that the  long-term  price
environment for the products that we produce and sell remains favourable.

Based on our expected 2009 production and prices prevailing at December 31, the
sensitivity  of our annual  earnings to a 1% change in commodity  prices before
pricing adjustments is as follows:

                                                       Effect of 1% change
                                    2009               on Annual After-Tax
                         Production Plan                          Earnings
-------------------------------------------------------------------------------
Coal (tonnes)                 20,000,000                      $ 21 million
Copper (tonnes)                  330,000                      $  6 million
Zinc (tonnes)                    960,000                      $  4 million
Lead (tonnes)                    210,000                      $  1 million
Gold (ounces)                    160,000                      $  1 million
Molybdenum (pounds)            8,500,000                      $  1 million
-------------------------------------------------------------------------------

Notes:

(1)  The effect on our earnings of commodity  price and exchange rate movements
     will vary from quarter to quarter depending on sales volumes.
(2)  Zinc includes  270,000  tonnes of refined zinc and 690,000  tonnes of zinc
     contained in concentrates. (3) Lead includes 85,000 tonnes of refined lead
     and 125,000 tonnes of lead contained in concentrates.  (4) Asset sales and
     financing  transactions  may affect our 2009 production plans and earnings
     sensitivities.
     Gold production for 2009 assumes completion of the sale of our Hemlo mines
     that was announced in February, 2009.
(5) All production estimates are subject to change based on market conditions.

In addition,  as a result of the Fording  transaction our earnings will be more
sensitive to changes in the Canadian/US  dollar exchange rate.  Based on prices
and the exchange  rate  prevailing  at December 31, 2008,  our current rates of
production and designation of approximately one-half of our US dollar debt as a
hedge  of  our  US  dollar   denominated   foreign   operations,   post-Fording
acquisition,  a 1% weakening of the Canadian dollar against the US dollar would
decrease 2009 earnings by approximately $50 million,  after taking into account
our US dollar forward sales contracts.

At December 31, 2008,  outstanding  receivables  included 164 million pounds of
copper  provisionally  valued at an average of US$1.40  per pound,  195 million
pounds of zinc valued at an average of US$0.54 per pound and 45 million  pounds
of lead  provisionally  valued at an average of US$0.42 per pound.  Final price
adjustments  on these  outstanding  receivables  will  increase or decrease our
revenue in 2009 depending on metal prices at the time of settlement.

Copper and zinc prices are currently  trading  approximately  50% and 40% lower
than 2008 average prices, respectively. Molybdenum prices are approximately 65%
lower than 2008 average  prices and lead prices are trading 50% lower than 2008
averages.  Gold  prices  are  approximately  10% higher  than the 2008  average
prices.  Partly  offsetting  the lower  commodity  prices is a weaker  Canadian
dollar,  which is currently trading at an exchange rate of $1.25 against the US
dollar compared with US$1 averaging C$1.07 in 2008.

Our copper  production  for 2009 is expected to increase by 5% from 2008 levels
to 330,000 tonnes.  Highland Valley's copper production is expected to increase
by approximately  10,000 tonnes from 2008, as grades and recoveries at the mine
are expected to improve during 2009.

-------------------------------------------------------------------------------
                            Teck 2008 Management's Discussion and Analysis   31
<PAGE>

Our zinc contained in  concentrate  production in 2009 is expected to be 27,000
tonnes  higher than in 2008.  Red Dog is expected  to  increase  production  by
58,000  tonnes  as a result  of  higher  ore  grades,  while  our share of zinc
production  from  Antamina and Duck Pond will  increase by 19,000 tonnes due to
ore body  sequencing.  These  production  increases  will be partly offset as a
result of the  closure of Lennard  Shelf and Pend  Oreille  mines in 2008 which
result in production losses of 50,000 tonnes.

Due to sea ice  conditions,  Red Dog has a shipping window that normally starts
in early July and ends in late October.  If ice or other weather conditions are
such that the shipping season is delayed, our quarterly sales patterns can vary
substantially. Sales and profits of the Red Dog mine follow a seasonal pattern,
with higher sales  volumes of zinc and most of the lead sales  occurring in the
last five months of the year following the  commencement of the shipping season
in July.

Refined zinc  production  from our Trail  metallurgical  complex is expected to
remain  similar  in 2009 at  270,000  tonnes  despite  implementing  production
curtailments  in late 2008 in response to changing market  conditions.  Current
premiums for zinc metal and customer deliveries suggest ongoing weakness in the
zinc metal markets.

Coal marketing  discussions are beginning for the 2009 coal year that commences
April 1, 2009. Integrated steel mills have curtailed production  significantly,
reducing demand for raw material inputs including  metallurgical  coal. Current
market sentiment is that US dollar coal prices will decrease substantially from
the 2008 coal year.  Our coal  sales  volumes  are  currently  estimated  at 20
million tonnes in 2009.  Coal sales volumes and price guidance for 2009 will be
confirmed after contracts for the 2009 coal year have been settled. Coal prices
in the first  quarter of 2009 are expected to decline  from the fourth  quarter
average  price of US$247 per tonne to  approximately  US$190 per tonne due to a
higher  percentage of sales of lower priced  thermal coal. At December 31, 2008
there was  approximately  500,000  tonnes of  carryover  remaining  under lower
priced 2007 coal year contracts,  substantially  all of which is expected to be
delivered in the first quarter of 2009.  Further,  the winter months  typically
present  challenging  shipping  conditions for Teck Coal that could potentially
impact first quarter results and further increase the amount of carryover.  Our
westbound  rail  contract with CP Rail for the movement of coal to the ports in
greater Vancouver expires at the end of March 2009.

Our  share  of gold  production  is  expected  to be  160,000  ounces  in 2009,
comprised  of  approximately  140,000  ounces from our 40% interest in Pogo and
20,000 ounces of by-product production from our other mining operations. We are
also pursuing the potential sale of our gold assets.

CAPITAL EXPENDITURES

Our 2009 capital expenditures,  excluding the Fort Hills oil sands project, are
expected to be approximately $500 million, including $250 million of sustaining
capital expenditures and $250 million on development projects.  Our development
expenditures  estimate  of $250  million  includes  $190  million for Carmen de
Andacollo's  hypogene  project  and $30  million  for  Highland  Valley's  mine
expansion.  We also expect to spend  approximately $330 million on our share of
costs for the Fort Hills oil sands project.  We are reviewing our discretionary
capital  spending in light of current market  conditions and our debt reduction
targets.

ASSET SALES

In January  2009,  we sold our 60% interest in the  Lobo-Marte  gold project in
Chile to  Kinross  Gold  Corporation  (Kinross)  for US$40  million in cash and
approximately  5.6 million Kinross common shares.  We will also receive a 1.75%
net smelter return royalty, which shall not exceed US$40 million, in respect of
60% of production from  Lobo-Marte,  payable when gold prices exceed US$760 per
ounce.  We  expect to record a  pre-tax  gain in the first  quarter  of 2009 of
approximately CDN$160 million on the transaction.

In February, 2009 we announced the sale of our interest in the Hemlo gold mines
for US$65  million.  The  transaction  is subject to customary  conditions  and
regulatory  approvals  and is expected to close in the second  quarter of 2009,
but will have an  effective  date of January 1, 2009.  We expect to recognize a
pre-tax gain of approximately CDN$60 million on closing.

We also  announced  in  February  2009 the  sale of our  indirect  interest  in
Sociedad Minera El Brocal S.A.A. for US$35 million.  Closing, which is expected
in the first  quarter of 2009, is also subject to customary  conditions  and we
expect to recognize a pre-tax gain of CDN$42 million upon closing.

We are  pursuing  other  asset  sale  initiatives  with a view  toward  further
reducing our outstanding debt.

-------------------------------------------------------------------------------
32    Teck 2008 Management's Discussion and Analysis
<PAGE>

FINANCING AND EXCHANGE RATES

In order to finance  the Fording  transaction  we arranged  debt  financing  of
US$9.8  billion,  of which US$9.3 billion is outstanding.  Interest  charges on
these  facilities  are based on LIBOR or US prime rates and our credit  rating.
The  additional  debt will result in a  substantial  increase  to our  existing
interest  expense.  To the extent that we refinance  or  otherwise  amend these
facilities, we expect our interest expense to increase further.

Our US dollar  denominated debt will be subject to revaluation based on changes
in the  Canadian/US  dollar  exchange  rate. We have  designated  approximately
one-half  of our US dollar  denominated  debt as a hedge  against our US dollar
denominated foreign operations.  As a result,  approximately 50% of any foreign
exchange  gains or losses  arising on our debt will be recorded in net earnings
with the remainder in other comprehensive  income. The earnings impact of these
revaluations  will be reduced as we pay down the debt,  although  exchange rate
fluctuations  will  also  affect  our debt to  equity  ratio  and our  interest
expense.

OTHER INFORMATION

The government of British Columbia introduced legislation to implement a carbon
tax on virtually all fossil fuels effective July 1, 2008. The tax is imposed on
fossil  fuels  used in BC and is  based  on a $10 per  tonne  of  CO2-emmission
equivalent, increasing by $5 per tonne each year until it reaches $30 per tonne
in 2012.  Based on our recent  historical  fuel use  figures,  we expect to pay
carbon tax of  approximately  $5 million for 2008,  increasing to approximately
$26 million per year by 2012.  Our expected  carbon tax cost is  primarily  the
result of our use of coal, diesel fuel and natural gas.

The BC government has also expressed its intention to implement a cap and trade
mechanism to further reduce greenhouse gas emissions. However, it has indicated
that the carbon tax and the cap and trade  system will be  integrated  to avoid
double taxation. We will monitor this issue as legislation is developed.

FINANCIAL INSTRUMENTS AND DERIVATIVES

We hold a number of financial instruments and derivatives, the most significant
of which are marketable  securities,  foreign exchange forward sales contracts,
fixed price forward metal sales  contracts,  settlements  receivable  and price
participation  payments on the sale of the  Cajamarquilla  zinc  refinery.  The
Cajamarquilla price participation  payments are economically similar to a fixed
price forward  purchase of zinc. The financial  instruments and derivatives are
all recorded at fair values on our balance  sheet with gains and losses in each
period  included in other  comprehensive  income,  net earnings from continuing
operations and net earnings from discontinued  operations as appropriate.  Some
of our gains and losses on metal-related  financial instruments are affected by
smelter price participation and are taken into account in determining royalties
and other expenses.  All are subject to varying rates of taxation  depending on
their nature and jurisdiction.

The  after-tax  effect of  financial  instruments  on our net  earnings for the
following periods is set out in the table below:

<TABLE>
<CAPTION>
=======================================================================================================
  ($ in millions)                                     2008                 2007                 2006
-------------------------------------------------------------------------------------------------------
<S>                                              <C>                 <C>                   <C>
 Positive (negative) price adjustments
      On prior year's sales                      $      57           $      (56)            $     42
      On current year's sales                         (386)                 (10)                  71
 ------------------------------------------------------------------------------------------------------
                                                      (329)                 (66)                 113
 Other financial instruments
      Derivative gains                                 185                   14                    -
      Cajamarquilla sale price participation
          (discontinued operations)                    (18)                 (46)                  36
 ------------------------------------------------------------------------------------------------------

                                                       167                  (32)                  36

 ------------------------------------------------------------------------------------------------------
 Total                                           $    (162)          $      (98)            $    149
 ======================================================================================================
</TABLE>

-------------------------------------------------------------------------------
                            Teck 2008 Management's Discussion and Analysis   33
<PAGE>

CRITICAL ACCOUNTING ESTIMATES

In  preparing  financial  statements,  management  has to  make  estimates  and
assumptions that affect the reported amounts of assets,  liabilities,  revenues
and expenses.  Based on historical  experience,  current  conditions and expert
advice,  management makes  assumptions that are believed to be reasonable under
the circumstances. These estimates and assumptions form the basis for judgments
about the carrying  value of assets and  liabilities  and reported  amounts for
revenues  and  expenses.   Different  assumptions  would  result  in  different
estimates, and actual results may differ from results based on these estimates.
These estimates and  assumptions are also affected by management's  application
of accounting policies. Critical accounting estimates are those that affect the
consolidated financial statements materially and involve a significant level of
judgment by management. Management's critical accounting estimates apply to the
assessment  for  the  impairment  of  property,  plant  and  equipment  and the
valuation  of  other  assets  and  liabilities  such as  inventory,  plant  and
equipment,   goodwill,   investments,   restoration  and  post-closure   costs,
accounting for income and resource taxes,  mineral reserves,  contingencies and
pension and other post-retirement benefits.

PROPERTY, PLANT AND EQUIPMENT

We capitalize  development  costs of mining  projects when resources as defined
under  National  Instrument  43-101 are  present  and it is  expected  that the
expenditure can be recovered by future exploitation or sale. Once available for
use, these costs are amortized  over the proven and probable  reserves to which
they relate,  calculated on a units of production  basis. The estimation of the
extent  of  reserves  is a  complex  task in which a number  of  estimates  and
assumptions are made.  These involve the use of geological  sampling and models
as well as  estimates  of future  costs.  New  knowledge  derived  from further
exploration  and development of the ore body may affect reserve  estimates.  In
addition,  the estimation of economic reserves depends on assumptions regarding
long-term commodity prices and in some cases exchange rates, which may prove to
be incorrect.

Where impairment  conditions may exist, the expected  undiscounted  future cash
flows from an asset are  compared  with its carrying  value.  These future cash
flows are developed  using  assumptions  that reflect the  long-term  operating
plans for an asset,  given  management's best estimate of the most probable set
of economic  conditions.  Commodity  prices used reflect market  conditions and
expectations  with respect to future prices at the time the model is developed.
These  models are updated  from time to time,  and lower prices are used should
market  conditions  deteriorate.  Inherent in these assumptions are significant
risks and  uncertainties.  In  management's  view,  based on assumptions  which
management  believes to be  reasonable,  a reduction in the  carrying  value of
property,  plant and  equipment  was required at December 31, 2008 for our Duck
Pond, Pend Oreille and Lennard Shelf zinc mines as described on previous pages.
In addition,  we also recorded  impairment  charges for our  Petaquilla  copper
project,  the Santa Fe nickel property and certain other exploration  projects.
Changes in market  conditions,  reserve estimates and other assumptions used in
these estimates may result in future write downs.

GOODWILL

We allocate goodwill arising from business  combinations to the reporting units
acquired  based on  estimates  of the fair value of the  reporting  unit.  When
performing goodwill impairment tests, we are also required to estimate the fair
value of each reporting unit and, in some circumstances,  the fair value of all
identifiable  assets and  liabilities in a reporting  unit. The fair values are
estimated  using a model of discounted  cash flows based on proven and probable
reserves and value beyond proven and probable reserves. Other major assumptions
used include  commodity  prices,  operating  costs,  foreign exchange rates and
discount rates.

In 2008 we used a  long-term  copper  price  of  US$1.85  per  pound  in  these
estimations.  A long-term copper price of US$1.75 per pound would have resulted
in an additional $150 million in impairment  charges.  A long-term copper price
of  US$1.90  per pound  would have  resulted  in no  impairment  except for $10
million at Duck Pond. We used an after-tax discount rate of 9% for reserves and
higher rates for resources and exploration potential.  No impairment would have
been  indicated  at an 8% discount  rate and all goodwill  associated  with our
copper  operations  would have been impaired at a 10% discount  rate.  The fair
value of our copper assets will continue to be affected by changes in long-term
commodity  prices,  discount  rates,  operating and capital  costs,  changes in
mineral reserves and the advancement of projects to the operating stage.

-------------------------------------------------------------------------------
34    Teck 2008 Management's Discussion and Analysis
<PAGE>

Goodwill  associated  with  our  coal  assets  arose  primarily  on our  recent
acquisition of the net assets of Fording. The primary assets of Fording were an
interest in Teck Coal. We previously  owned a 52% direct and indirect  interest
in Teck  Coal  and the  underlying  business  units to which  the  goodwill  is
associated.  As we acquired the first 52% of the underlying business units at a
much lower cost base, a significant valuation buffer existed at the time of the
Fording  transaction.  We  subsequently  tested the  goodwill  using lower coal
prices with no impairment of goodwill with  long-term  coal prices above US$100
per tonne.

Fair value estimation and impairment charges are based on management  estimates
and  assumptions.  Significant  judgment  is applied and actual  results  could
differ from our estimates.

INCOME AND RESOURCE TAXES

The  determination  of our  tax  expense  for  the  year  and  its  future  tax
liabilities and assets involves significant  management estimation and judgment
involving a number of  assumptions.  In determining  these amounts,  management
interprets tax legislation in a variety of jurisdictions and makes estimates of
the  expected  timing of the  reversal  of future tax  assets and  liabilities.
Management  also makes  estimates  of the future  earnings,  which  affects the
extent to which  potential  future tax benefits may be used.  We are subject to
assessments by various  taxation  authorities who may interpret tax legislation
differently. These differences may affect the final amount or the timing of the
payment of taxes.  We provide  for these  differences,  where  known,  based on
management's best estimate of the probable outcome of these matters.

PENSION AND OTHER POST-RETIREMENT BENEFITS

The cost of  providing  benefits  through  defined  benefit  pension  plans and
post-retirement  benefit plans is actuarially  determined.  Cost and obligation
estimates  depend on management's  assumptions  about future events,  which are
used by the actuaries in calculating  such amounts.  These include  assumptions
with respect to discount  rates,  the  expected  plan  investment  performance,
future compensation increases,  health care cost trends and retirement dates of
employees.  In addition,  actuarial consultants utilize subjective  assumptions
regarding  matters such as withdrawal and mortality  rates.  Actual results may
differ materially from those estimates based on these assumptions.

ASSET RETIREMENT OBLIGATIONS

The amounts recorded for asset retirement costs are based on estimates included
in closure and  remediation  plans.  These  estimates are based on  engineering
studies of the work that is required by environmental laws or public statements
by  management  that results in an  obligation.  These  estimates  are based on
assumptions  as to the timing of  remediation  work and the rate at which costs
may  inflate in future  periods.  Actual  costs and the timing of  expenditures
could differ from these estimates.

RECOGNITION OF CONTINGENCIES

We are subject to a number of lawsuits and threatened  lawsuits. A provision is
made for amounts claimed  through these lawsuits when management  believes that
it is more likely  than not that the  plaintiffs  will be awarded  damages or a
monetary  settlement  will be made.  Management  seeks the  advice  of  outside
counsel in making such judgments when the amounts involved are material.

ADOPTION OF NEW ACCOUNTING STANDARDS AND ACCOUNTING DEVELOPMENTS

INVENTORIES, SECTION 3031

In June 2007, the CICA issued  Section 3031  "Inventories"  to replace  Section
3030.  The new section,  which was  effective  on January 1, 2008,  establishes
standards for the  measurement  and  disclosure of  inventories.  Retrospective
application  of  this  standard  did  not  have  an  impact  on  our  financial
statements.

-------------------------------------------------------------------------------
                            Teck 2008 Management's Discussion and Analysis   35
<PAGE>

GOODWILL AND INTANGIBLE ASSETS

In February  2008,  the CICA issued  Section  3064,  "Goodwill  and  Intangible
Assets," which replaces Section 3062,  "Goodwill and Other Intangible  Assets."
This  new  standard   provides   guidance  on  the  recognition,   measurement,
presentation and disclosure of goodwill and intangible assets.  Concurrent with
the adoption of this  standard,  CICA Emerging  Issues  Committee  Abstract 27,
"Revenues  and  Expenditures  in  the  Pre-operating  Period,"  ("EIC-27")  was
withdrawn.

This standard is effective for our fiscal year  beginning  January 1, 2009 with
retrospective  application.  Deferred start-up costs of $19 million, net of tax
of $10 million, at December 31, 2008 will be written-off.

BUSINESS COMBINATIONS AND RELATED SECTIONS

In January  2009,  the CICA issued  Section  1582  "Business  Combinations"  to
replace  Section  1581.  Prospective  application  of the standard is effective
January 1, 2011, with early adoption permitted.  This new standard  effectively
harmonizes  the  business   combinations  standard  under  Canadian  GAAP  with
International  Financial Reporting Standards ("IFRS"). The new standard revises
guidance on the determination of the carrying amount of the assets acquired and
liabilities assumed,  goodwill and accounting for non-controlling  interests at
the time of a business combination.

The CICA concurrently issued Section 1601 "Consolidated  Financial  Statements"
and Section  1602  "Non-Controlling  Interests,"  which  replace  Section  1600
"Consolidated  Financial Statements." Section 1601 provides revised guidance on
the preparation of consolidated financial statements and Section 1602 addresses
accounting for non-controlling  interests in consolidated  financial statements
subsequent to a business combination.  These standards are effective January 1,
2011,  unless they are early adopted at the same time as Section 1582 "Business
Combinations."

INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) CHANGEOVER PLAN

Canadian  GAAP for  publicly  listed  entities  will  convert to  International
Financial Reporting Standards (IFRS) on January 1, 2011.

We have completed a high-level preliminary assessment and identification of the
standards that affect our financial statements,  business and system processes,
and we are  advancing  through the  detailed  analysis of the higher and medium
priority areas. These detailed assessments are designed to determine the effect
on business  activities  including  information  technology  and data  systems,
internal controls over financial  reporting and, finally,  disclosure  controls
and procedures.

We are maintaining our financial  reporting expertise and ensuring our team has
sufficient  IFRS  competencies,  by addressing  training  requirements  through
ongoing  sessions  provided by external  advisors.  The education  sessions are
targeted to various levels of the organization.

We  anticipate  that there will be changes  in  accounting  policies  and these
changes may materially affect our financial statements.


OTHER INFORMATION

OUTSTANDING SHARE DATA

As at March 4, 2009, there were 477,513,286  Class B subordinate  voting shares
and  9,353,470  Class A common  shares  outstanding.  In  addition,  there were
6,639,280 director and employee stock options  outstanding with exercise prices
ranging  between  $4.15  and  $49.17  per  share.  More  information  on  these
instruments  and the  terms of their  conversion  are set out in note 15 to our
2008 consolidated financial statements.

-------------------------------------------------------------------------------
36    Teck 2008 Management's Discussion and Analysis
<PAGE>

CONTRACTUAL AND OTHER OBLIGATIONS
<TABLE>
<CAPTION>
====================================================================================================================================
($ in millions)                                                        Less than         2 - 3       4 - 5   More than
                                                                          1 Year         Years       Years     5 Years        TOTAL
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>             <C>           <C>       <C>         <C>
Debt                                                                      $7,845        $3,548        $357      $1,218      $12,968
Operating leases                                                              38            56          22          39          155
Capital Leases                                                                63            61          29           -          153
Road and port lease at Red Dog (Note 1)                                       22            44          44         630          740
Minimum purchase obligations (Note 2)
   Concentrate, supply and other purchases                                   186            19           8           7          220
   Shipping and distribution                                                  29            20           9           7           65
Pension funding (Note 3)                                                      62             -           -           -           62
Other non-pension post-retirement benefits (Note 4)                           11            23          26         188          248
Asset retirement obligations (Note 5)                                         16            53          13         587          669
Other long-term liabilities (Note 6)                                          81            35          15          51          182
Contributions to the Fort Hills oil sands project (Note 7)                   330         1,265           -           -        1,595
Contributions to Galore Creek (Note 8)                                        16            20           -           -           36
------------------------------------------------------------------------------------------------------------------------------------
                                                                          $8,699        $5,144        $523      $2,727       $17,093
====================================================================================================================================
</TABLE>

Notes:

(1)  We lease road and port facilities from the Alaska  Industrial  Development
     and Export Authority through which we ship metal concentrates  produced at
     the Red Dog mine.  Minimum lease  payments are US$18 million per annum and
     are subject to deferral and abatement for force majeure events.

(2)  The majority of our minimum purchase obligations are subject to continuing
     operations and force majeure provisions.

(3)  As at December  31,  2008 the  company  had a net  pension  deficit of $11
     million based on actuarial  estimates  prepared on a going concern  basis.
     The amount of  minimum  funding  for 2009 in  respect  of defined  benefit
     pension plans is $62 million.  The timing and amount of additional funding
     after 2009 is  dependent  upon  future  returns on plan  assets,  discount
     rates, and other actuarial assumptions.

(4)  We had a discounted,  actuarially  determined liability of $248 million in
     respect of other non-pension  post-retirement  benefits as at December 31,
     2008. Amounts shown are estimated expenditures in the indicated years.

(5)  We accrue  environmental and reclamation  obligations over the life of our
     mining  operations  and amounts  shown are estimated  expenditures  in the
     indicated years at fair value, assuming credit-adjusted risk-free discount
     rates between 5.75% and 16.5%,  and  inflation  factors  between 2.00% and
     2.75%.  The  liability  on  an  undiscounted  basis  before  inflation  is
     estimated to be approximately $1,833 million.

(6)  Other   long-term    liabilities   include   amounts   for   post-closure,
     environmental costs and other items.

(7)  In  November  2005,  we acquired a 15%  interest in the Fort Hills  Energy
     Limited Partnership (FHELP),  which is developing the Fort Hills oil sands
     project in Alberta,  Canada.  In September 2007, we acquired an additional
     5% interest, bringing our total interest to 20%. To earn our additional 5%
     interest,  we are  required to  contribute  27.5% of project  expenditures
     after project  spending  reaches $2.5 billion and before project  spending
     reaches $7.5  billion.  We have ongoing  commitments  to fund FHELP during
     this earn-in phase  totalling $1.6 billion  thereafter we are  responsible
     for our 20% share of  development  costs.  As the project is  currently on
     hold pending cost re-evaluation,  no additional  commitments are presently
     shown.

(8)  In  February  2009,  we  amended  certain  provisions  of the  partnership
     agreement  relating  to  the  Galore  Creek  project.  Under  the  amended
     agreement, our committed funding on Galore Creek has been reduced from $72
     million  to $60  million  including  $15.8  million  contributed  by us on
     account of studies prior to December 31, 2008 and $8.6 million contributed
     by us on  account  of the  November  and  December  cash  calls.  Our  net
     remaining committed funding is $36 million, which we expect to pay in 2009
     and 2010.


DISCLOSURE CONTROLS AND INTERNAL CONTROL OVER FINANCIAL REPORTING

Disclosure controls and procedures

Disclosure controls and procedures are designed to provide reasonable assurance
that  material  information  is gathered  and  reported  to senior  management,
including  the  Chief  Executive  Officer  and  Chief  Financial  Officer,   as
appropriate to permit timely decisions regarding public disclosure. Management,
including  the  Chief  Executive  Officer  and  Chief  Financial  Officer,  has
evaluated  the  effectiveness  of the design and  operation  of our  disclosure
controls  and  procedures,  as  defined in the rules of the US  Securities  and
Exchange Commission and Canadian Securities Administration,  as at December 31,
2008. Based on this evaluation, the Chief Executive Officer and Chief Financial
Officer  have  concluded  that our  disclosure  controls  and  procedures  were
effective to ensure that information  required to be disclosed in reports filed
or submitted by us under United States and Canadian  securities  legislation is
recorded, processed,  summarized and reported within the time periods specified
in those rules.

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                            Teck 2008 Management's Discussion and Analysis   37
<PAGE>

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our  management  is  responsible  for  establishing  and  maintaining  adequate
internal control over financial reporting.  Any system of internal control over
financial  reporting,  no matter how well designed,  has inherent  limitations.
Therefore,  even those  systems  determined  to be  effective  can provide only
reasonable  assurance  with  respect to  financial  statement  preparation  and
presentation.  Management has used the Committee of Sponsoring Organizations of
the Treadway  Commission  (COSO) framework to evaluate the effectiveness of our
internal control over financial reporting. Based on this assessment, management
has concluded that as at December 31, 2008, our internal control over financial
reporting was effective.

The  effectiveness of our internal  controls over financial  reporting has been
audited  by  PricewaterhouseCoopers   LLP,  an  independent  registered  public
accounting firm, who have expressed their opinion in their report included with
our annual consolidated financial statements.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

On October 30, 2008,  we completed  our  acquisition  of Fording  Canadian Coal
Trust ("Fording"),  which primarily  consisted of Fording's 60% interest in the
Elk Valley Coal Partnership. We consider the acquisition of Fording material to
our results of operations,  financial  position and cash flows from the date of
acquisition  through December 31, 2008, and believe that the internal  controls
and procedures at Fording have a material  effect on our internal  control over
financial reporting.  Prior to the completion of this acquisition,  we included
Elk Valley Coal  Partnership  in our  evaluation  of the  effectiveness  of our
internal  control  over  financial  reporting,  due to our 40%  interest in the
assets.  We have,  therefore,  included  Fording  in our annual  assessment  of
internal control over financial reporting for the year ended December 31, 2008.

Although we have  generally  maintained  our internal  controls over  financial
reporting that were in effect prior to the  acquisition of Fording,  subsequent
to the  acquisition  we have  performed  additional  controls  relating  to the
consolidation  of  financial   information  used  in  the  preparation  of  the
consolidated  financial  statements.  We believe  that these  changes  have not
negatively  affected our internal  control over financial  reporting during the
year ended December 31, 2008.


USE OF NON-GAAP FINANCIAL MEASURES

Our financial statements are prepared in accordance with accounting  principles
generally accepted in Canada (GAAP). This management's  discussion and analysis
of financial  position and operating  results  refers to adjusted net earnings,
comparative  net  earnings,   operating  profit  and  operating  profit  before
depreciation and pricing  adjustments,  which are not measures recognized under
GAAP in Canada or the  United  States  and do not have a  standardized  meaning
prescribed by GAAP. For adjusted net earnings and comparative net earnings,  we
adjust  net  earnings  as  reported  to remove  the  effect of  unusual  and/or
non-recurring transactions in these measures. Operating profit is revenues less
operating  expenses and depreciation and amortization.  Operating profit before
depreciation  and pricing  adjustments is operating  profit with  depreciation,
amortization and pricing adjustments added or deducted as appropriate.  Pricing
adjustments  are  described  under the heading  "Average  Commodity  Prices and
Exchange  Rates".  These measures may differ from those used by, and may not be
comparable to such measures as reported by, other  issuers.  We disclose  these
measures,  which have been derived from our financial statements and applied on
a consistent basis,  because we believe they are of assistance in understanding
the results of our operations  and financial  position and are meant to provide
further information about our financial results to shareholders.


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38    Teck 2008 Management's Discussion and Analysis

<PAGE>


CAUTION ON FORWARD-LOOKING INFORMATION

This document contains certain forward-looking  information and forward-looking
statements as defined in applicable  securities laws. All statements other than
statements  of  historical   fact  are  forward   looking   statements.   These
forward-looking  statements,  principally under the heading "Outlook," but also
elsewhere in this document, include estimates,  forecasts, and statements as to
management's  expectations  with  respect to,  among other  things,  our future
earnings  and cash  flow,  our  plans to reduce or  refinance  our  outstanding
indebtedness  and the  expected  impact of steps  that we have  taken to reduce
spending,  potential sources of funds to repay indebtedness,  our planned sales
of assets,  ongoing  discussions with our lenders,  the future  availability of
unused credit lines,  our ability to comply with debt covenants,  our plans for
our  oil  sands  investments,   forecast   recoveries  and  the  resolution  of
geotechnical  issues at Highland Valley Copper,  expected progress and costs of
our Andacollo concentrate project, the financial and accounting consequences of
our acquisition of the assets of Fording  Canadian Coal Trust,  the sensitivity
of our  earnings  to  changes  in  commodity  prices and  exchange  rates,  the
potential impact of transportation and other potential production  disruptions,
the impact of currency exchange rates, future trends for the company,  progress
in  development  of mineral  properties,  future  production and sales volumes,
capital  expenditures and mine production costs,  demand and market outlook for
commodities,  future commodity prices and treatment and refining  charges,  the
settlement of coal contracts  with  customers,  the outcome of mine  permitting
currently underway, our assessment of the quantum of potential natural resource
damages and other costs in connection  with the Upper  Columbia River Basin and
the outcome of legal proceedings  involving the company.  These forward-looking
statements  involve numerous  assumptions,  risks and  uncertainties and actual
results may vary materially.

These  statements  are based on a number  of  assumptions,  including,  but not
limited to,  assumptions  regarding  general business and economic  conditions,
interest  rates,  the supply and demand for,  deliveries  of, and the level and
volatility of prices of copper,  coal,  zinc and gold and other primary  metals
and minerals as well as oil, and related products, the timing of the receipt of
regulatory and  governmental  approvals for our development  projects and other
operations,  our costs of production and production and productivity levels, as
well as  those  of our  competitors,  power  prices,  market  competition,  the
accuracy of our reserve  estimates  (including with respect to size,  grade and
recoverability) and the geological,  operational and price assumptions on which
these are based,  conditions  in  financial  markets  and the future  financial
performance  of  the  company.   The  foregoing  list  of  assumptions  is  not
exhaustive.  Events  or  circumstances  could  cause  actual  results  to  vary
materially

Factors that may cause actual results to vary materially  include,  but are not
limited to,  changes in  commodity  and power  prices,  changes in interest and
currency exchange rates,  acts of foreign  governments and the outcome of legal
proceedings,  inaccurate  geological and metallurgical  assumptions  (including
with  respect to the size,  grade and  recoverability  of mineral  reserves and
resources), unanticipated operational difficulties (including failure of plant,
equipment  or  processes  to  operate  in  accordance  with  specifications  or
expectations,  cost  escalation,  unavailability  of materials  and  equipment,
government action or delays in the receipt of government approvals,  industrial
disturbances or other job action,  adverse weather conditions and unanticipated
events related to health,  safety and environmental  matters),  political risk,
social  unrest,  failure  of  customers  or  counterparties  to  perform  their
contractual  obligations,  the outcome of our ongoing  discussions with lenders
(including   potential  additional  costs  or  covenants  associated  with  the
refinancing of our existing  indebtedness  and the risk that we may not be able
to reach an appropriate accommodation with lenders), the results of our ongoing
efforts to sell assets,  further changes in our credit ratings,  and changes or
further deterioration in general economic conditions or continuation of current
severe disruptions in credit and financial markets.

Statements  concerning future production costs or volumes,  and the sensitivity
of the company's earnings to changes in commodity prices and exchange rates are
based on numerous  assumptions of management regarding operating matters and on
assumptions  that demand for products  develops as anticipated,  that customers
and other counterparties perform their contractual obligations,  that operating
and capital plans will not be disrupted by issues such as  mechanical  failure,
unavailability  of parts and supplies,  labour  disturbances,  interruption  in
transportation or utilities,  adverse weather conditions, and that there are no
material unanticipated variations in the cost of energy or supplies.

We assume no obligation to update forward-looking statements except as required
under securities laws. Further  information  concerning risks and uncertainties
associated with these forward looking  statements and our business can be found
in our Annual  Information  Form for the year ended December 31, 2008, filed on
SEDAR and on EDGAR under cover of Form 40F.


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                            Teck 2008 Management's Discussion and Analysis   39
</TEXT>
</DOCUMENT>
