Ladies and gentlemen, thank you for standing by. Welcome to Teck's 2019 Sustainability Review Investors Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session. This conference call is being recorded on Wednesday, June 3, 2020. I would now like to turn the conference over to Fraser Phillips, Senior Vice President, Investor Relations and Strategic Analysis. Please go ahead.
Thank you, Melanie, and good morning, everyone. Thank you for joining us for Teck's sixth annual discussion of our sustainability performance. I'm joined today by our President and CEO, Don Lindsay, of course, and also by Senior Vice President, Sustainability and External Affairs, Marcia Smith. We also have a number of other members of the Teck team on the line with us today. We're looking forward to discussing Teck's approach to ESG, sustainability, and our performance. Before we start, I'd like to draw your attention to the caution regarding forward-looking information on slides two and three. This presentation contains forward-looking statements regarding our business. However, various risks and uncertainties may cause actual results to vary. Teck does not assume the obligation to update any forward-looking statement. With that, I'd like to turn the meeting over to Don Lindsay.
Thank you, Fraser, and good morning, everyone. There's a lot to cover on this call, so I wanted to start by outlining our response to COVID-19 and our current business priorities. We will provide a brief update on our new sustainability strategy, which has ambitious short-term goals for 2025 and long-term goals all the way out to 2040. We will transition to a deeper dive on five key sustainability topics. We begin with an update on health and safety because at Teck, nothing is more important than the health and safety of employees and contractors. Looking at our recent health and safety performance, we saw an improvement in safety metrics year-over-year, and importantly, we've been able to reduce the rate of high potential incidents by 31%, almost one-third, over the last four years.
Despite our progress, though, in safety, we were saddened to report a fatality at the QB2 project in 2019. I should say that an in-depth investigation was completed and preventative measures implemented. We'll be sharing lessons learned across our company and all across the industry. COVID-19 is clearly the most pressing health and safety issue facing Teck and the world. We have a comprehensive approach to managing the risks and the impacts of the pandemic based around five pillars: prevention, employee support, aid for communities and public health organizations, business continuity, and communication. All of our Teck-managed mines continue to operate, and we've implemented comprehensive preventative measures at our operations that are in line with guidance from health authorities.
These include enhanced cleaning and disinfecting protocols, eliminating group meetings and requiring physical distancing, staggering shift start times to support the distancing, ensuring adequate supplies of personal protective equipment, including masks, and promoting measures like frequent handwashing. Our people and our unions are working extremely hard to ensure these measures are being diligently implemented. In fact, at just our two Mexican coal operations, we've conducted over 28,000 assurance checks and achieved an impressive 98% compliance rate. We have maintained wages for employees whose work hours have been reduced because of COVID-19 measures, and we are providing employees and their families with additional support, including access to specialized health resources and mental health support services. Lastly, I want to take a moment to recognize and thank all of our frontline workers.
These are men and women who are ensuring our communities are safe and have the services and supplies they need. In addition to our strong focus on our people and on their health and safety, we have also taken steps to ensure the resiliency of our business throughout this period. We are well positioned to weather the effects of this pandemic, supported by our strong financial position. We have around CAD 5.8 billion of liquidity as of April 20th. Our $4 billion US revolving credit facility is committed through Q4 of 2024. It does not have a cash flow-based covenant, does not include a credit rating trigger, and does not include a general material adverse effect covenant condition. We have no significant debt maturities prior to 2035. We have investment grade credit ratings from all four credit rating agencies.
For our QB2 project, we have a prudent funding and financing plan in place. The $2.5 billion US project financing facility and the QB2 partnership transaction dramatically reduce our funding requirements for the project. There are no contributions to project capital expected from Teck until mid-2021. Turning to slide seven. As we work to maintain business continuity and the health and safety of our workforce, we are also working to support our communities. We have created a CAD 20 million COVID-19 response fund for communities, which includes procuring and donating essential medical supplies, such as one million KN95 masks to healthcare providers. Also supporting local health and social services affected by COVID-19 and contributing to relief efforts. That work builds on our well-established approach to local and global community priorities. For example, our support for healthcare aligns with our Copper & Health program.
We've established Copper & Health several years ago to increase the use of antimicrobial copper to reduce the spread of healthcare-acquired infections. Copper, as many of you know, has unique antimicrobial properties and is proven to continuously kill bacteria that cause infections. When installed on high-touch surfaces, copper will eliminate up to 99.9% of harmful bacteria. As a major copper producer, we believe we can play an important role in educating people about the use of copper to reduce the spread of infections like COVID-19. We are also supporting international relief and regional organizations to protect food security. This aligns with our Zinc & Health program, launched nearly a decade ago. We are working with the United Nations World Food Programme to improve crop yields and strengthen food security.
Finally, we know some of the people who have been impacted the most by COVID-19 are women and other vulnerable groups, and that's why we're working with UN Women and other organizations to support economic empowerment and provide educational opportunities. The extra steps we are taking today to respond to the many social challenges posed by COVID-19 are rooted in years of working to improve the lives and well-being of people in our communities and around the world. Our approach to sustainability is core to the success of our business. Strong sustainability practices are an essential part of our strategy to responsibly advancing projects, avoiding disruptions at operations, and attracting the best people. We also know that investors are increasingly valuing a company's sustainability performance in managing risks and supporting growth. It is our goal to be the leading diversified mining company when it comes to sustainability and ESG.
I am proud to say our efforts on sustainability have been recognized by a number of organizations. For example, in 2019, Teck was named to the Dow Jones Sustainability World Index for the 10th consecutive year, and we were the top-ranked mining company on the index. We are also highly ranked on MSCI and Sustainalytics among our peers, and we've been recognized as a strong performer by ISS, Vigeo Eiris, FTSE4Good, and the Bloomberg Gender-Equality Index. We're proud to say that we are also the only mining company on the Global 100 Most Sustainable Corporations list. While we are proud of our performance, we do know that there is still much more work to be done.
Our work in sustainability aligns with leading external standards and through our memberships, for example, with the International Council on Mining and Metals or ICMM, we conduct third-party verification of sustainability practices at our operations. We also participate in global organizations that drive sustainability leadership. We have been producing GRI sustainability reports for the past 19 years, and we released for the first time an index aligned with the Sustainability Accounting Standards Board or SASB standards this year. On climate change, we are members of the Carbon Pricing Leadership Coalition, and we are currently preparing our third report under the Task Force on Climate-related Financial Disclosure, known as TCFD. In this next section, I want to provide an overview of our approach to business, which directly links to our sustainability strategy and performance.
Slide 11, starting with copper, which is a critical metal for enabling the transition to a low carbon economy. Our copper growth strategy will see us rebalance our portfolio to make copper equal to or greater than our steelmaking coal business. As one of the lowest carbon producers of copper, we're well-positioned for the ongoing electrification and associated decarbonization of the economy. We have a world-class stream of production with Highland Valley Copper Mine in British Columbia, Carmen de Andacollo Mine in Chile, and through our joint venture interest in Antamina in Peru. We have growth opportunities as far as the eye can see in copper, starting with QB2, a long-life, low-cost Chilean operation that's currently in the construction phase. While construction is currently suspended due to COVID-19.
Aligned with the transition to a low carbon economy, as part of our commitment to be a net zero carbon company by 2050, we are working to source 50% of our electricity demands in Chile from clean energy by 2025 and 100% by 2030. Moving now to our steelmaking coal business. We have strong long-term cash flow from our four long-life, high-quality steelmaking coal mines that have more than 30 years of reserves and over 100 years of resources. Our steelmaking coal operations have consistently delivered higher operating margins than many other major steelmaking coal exporters. As you know, steelmaking coal is a critical component in the production of steel, which is needed for everything from hospitals to clean power. We are amongst the lowest carbon-intensive producers of steelmaking coal in the world, positioning us well for the transition to a low carbon economy.
We also have a strong focus on managing water quality at our steelmaking coal operations, which Marcia will speak to in more detail later in the presentation. Turning now to our zinc business unit. Zinc enhances the durability of steel, and it is also an essential micronutrient for human health. Teck has a world-class zinc business with our flagship Red Dog Mine, one of the largest high-grade zinc producers in the world. We operate Red Dog under an innovative operating agreement with the landowner, NANA, a regional Alaska Native corporation owned by the Iñupiat people of Northwest Alaska. The operation is firmly located near the bottom of the industry cost curve year after year.
Turning to our energy business, we have a 21.3% interest in the Fort Hills oil sands operation, which has amongst the lowest carbon intensity oil production in the oil sands, lower than half of the oil refined in the U.S. today. It features proven technology and has an experienced operator with Suncor. We have been very clear, though, that if we can't see value for Fort Hills reflected in our share price, we will not hesitate to pursue other options to realize the value, including divestment at the appropriate time. How does all this fit together? Well, our strategy is very straightforward. We are implementing a conscious growth strategy to financially deload from our steelmaking coal and zinc businesses. We are focused on rebalancing our portfolio to ultimately make our copper business larger than our steelmaking coal business.
Beginning with building QB2 in Chile, which will double our copper production on a consolidated basis. Rebalancing our business towards copper does align with the shift to a low carbon economy, which is a global sustainability priority for all businesses and governments. As we advance this strategy, sustainability will remain at the forefront of everything we do with our ambitious new sustainability goals guiding us along on the path ahead. With that said, I will now hand the call over to Marcia Smith.
Great. Thanks, Don, good morning, everyone. I'm going to cover a few ESG and sustainability topics, then we'll open it up for questions. As Fraser said, obviously Don and I are here, a number of our colleagues are on the line with us as well today. Teck has had a comprehensive sustainability strategy in place for nearly a decade. We updated the strategy first in 2015, we released a second update a few months ago in early March 2020. In this most recent update, we set ambitious goals in eight strategic themes, from health and safety to biodiversity to climate change. Each theme has long-term objectives with short-term milestone goals to guide our progress. Looking to slide 18, I'm going to start with climate action. We know that we have a responsibility to help tackle the global challenge of climate change.
We do this by working to reduce our emissions at our operations, by advocating for policies that support the transition to a low carbon economy, by responsibly producing materials that are essential to building the technologies and infrastructure needed to reduce emissions globally. The carbon intensity of our operations is already very low within our industry. As shown in the graph here on the slide, the intensity of our Scope 1 and Scope 2 GHG emissions on a copper equivalent basis is amongst the lowest in the industry. Further, the majority of our business is already covered by carbon pricing. Unlike many of our peers, the cost of carbon is already factored into our cost structure.
Earlier this year, we set the goal of being carbon neutral across all operations and activities by 2050, this commitment demonstrates our support for the transition to a low carbon economy and worldwide efforts to meet the goal of the Paris Agreement to limit global temperature increase. It also aligns with commitments made by our primary operating jurisdictions of Canada and Chile, who committed to being carbon neutral by 2050. Underpinning this objective are three short-term goals. The first is to reduce the carbon intensity of our operations by 33% by 2030. The second, as Don mentioned, is to source 50% of our electricity demands in Chile from clean energy by 2025 and 100% by 2030. Third is to accelerate the adoption of zero emission alternatives for transportation by displacing the equivalent of 1,000 internal combustion engine vehicles by 2025.
Moving to slide 20, we have set out a roadmap for how we will reduce carbon intensity and ultimately achieve our long-term objective of carbon neutrality. It first starts with a solid understanding of our current and our future emission sources, a targeted mitigation framework. This framework has four steps. First, avoiding emissions altogether where possible. Second, eliminating emissions through the use of alternatives such as solar instead of coal power. Third, minimizing emissions. Fourth, using carbon offsets if needed. We know that our two most significant emission sources are from power supply and from our mobile equipment fleet, such as haul trucks. We've prioritized those two sources in our short-term goals, are deploying proven cost-effective technologies to make progress now. This includes increasing procurement of electricity for operations from clean energy sources.
Earlier this year, we announced a major purchase agreement for our QB2 project in Chile that will source renewable energy for approximately half the power required for that operation. We're also replacing internal combustion engine vehicles with zero emission alternatives, to focus on electric transportation and alternatives to ensure of heavy loads. As you can see on this slide, as we move forward, we will evaluate and implement options to address other sources of emissions. For example, we're considering lower emission alternatives for stationary combustion processes, such as in our steelmaking coke dryers, and we're assessing the potential for using emerging technologies such as carbon capture and storage. At each stage, we're looking at what cost-effective technologies are available and proven now that we can begin implementing, and at the same time, we're monitoring early-stage technologies as they mature towards commercial viability.
I'll talk just for a minute on slide 21 about an area of active technology development, that's something called the Innovation for Cleaner, Safer Vehicles initiative that's being advanced through the International Council on Mining and Metals. 27 of the world's leading mining companies, including Teck, and mining equipment manufacturers are collaborating to develop a new generation of mining vehicles with a significantly reduced environmental footprint, including lower greenhouse gas emissions, reduced diesel particulate release, and decreased chance of collisions. I'm on slide 22, I'm going to talk for a moment about water stewardship. We have been, we will continue to focus on innovative water management and water treatment solutions to protect water quality. We continue to focus on transitioning to seawater or low-quality water sources in water-stressed regions.
For example, this means using desalinated seawater for our QB2 project, which is located in one of the driest places in the world. One of our key priorities is managing water quality at our stormwater control operations in the Elk Valley of British Columbia. We've discussed this topic before on this call, I'm pleased to say that we're making good progress. To address the challenge, Teck worked in partnership with governments, indigenous peoples, and surrounding communities to develop the Elk Valley Water Quality Plan, which was approved by our provincial regulator. We're advancing a range of innovative technologies to achieve the objectives of the plan. As part of that work, we developed a new form of water treatment called saturated rock fills, which can help achieve water quality objectives more quickly and at a lower cost.
Saturated rock fills, or SRFs as we call them, use naturally occurring biological processes to remove selenium and nitrate from mine-affected water. Our first full-scale SRF is successfully treating up to 10 million liters per day and achieving near complete removal of selenium and nitrate. We're currently building the second phase of this SRF, which will double water treatment capacity to 20 million liters per day. We have one tent-based facility operating successfully, we're currently constructing a second larger facility at our Gordon River operation. Moving forward, we're planning for all future water treatment facilities to be SRFs. We have a major R&D program underway to continue, for example, improving our options for source control. This includes advancing our work to reduce nitrate at source through the use of explosive product liners, and you see that pictured here on the slide. Moving now to slide 24.
As you can see in this chart, we have a clear path forward for implementing the Elk Valley Water Quality Plan and improving water quality. As disclosed in our Q4 2019 results press release, we anticipate spending CAD 640 million to CAD 690 million from 2020 to 2024 on water treatment in the Elk Valley. This will see a total treatment capacity increase to 120 million liters of water per day. Ultimately, it will ensure that the watershed is protected and that we can continue to sustainably operate our mines in that region. I am going to shift on slide 25 now to tailings management. The safe management of tailings dams and facilities is of critical importance for our company and our industry in the wake of the tragic incidents at both Brumadinho and Samarco.
Teck manages 16 active tailings facilities and 39 facilities that are closed and no longer receiving tailings. We have comprehensive systems and procedures to ensure the safety of our facilities organized around 6 levels of protection that are outlined on the slide. Our tailings facilities are operated and maintained to meet global best practices for safety, including industry-leading protocols established by the Towards Sustainable Mining Program, or TSM, and the Canadian Dam Association. Our facilities also have full emergency preparedness plans in place to ensure the safety of local stakeholders. The most recent annual dam safety inspections at our facilities, which are available on our website, confirm that they are stable and secure and that our monitoring and surveillance practices are robust.
Many on the call will also be aware that last year, the Church of England Pensions Board and the Swedish Council on Ethics sought additional disclosure on tailings, and you will also find that detail on our website. In 2019, we undertook a special review of Teck tailings and water retention structures following the Brumadinho incident. That review was conducted by independent external experts who provided their report to the Safety and Sustainability Committee of our board. They confirmed that there are no immediate or emerging threats of catastrophic failures around tailings or water dams. Nevertheless, we are focused on maintaining our management practices and ensuring that our facilities meet the highest standards of safety.
Finally, I will say that planning is underway today at Teck to fully implement the new global tailings standard that is being advanced by the Principles for Responsible Investment, the United Nations Environment Programme, and the ICMM as finalized and released. Moving to our last topic on slide 26. In today's increasingly complex operating environment, success relies on developing positive long-term relationships with communities, and this begins with acknowledging and respecting the human and indigenous rights of the people that we interact with. In 2018, we had no significant human rights related to community incidents. Last month, we released our updated human rights policy, which emphasizes our commitment to the UN Guiding Principles. Most of our operations and the majority of our development projects are located within or immediately adjacent to indigenous people territories.
Currently, we have formal agreements in place with Indigenous Peoples at all mining operations. We believe that agreements form a framework for relationships, they build a foundation for cooperation, and they support ongoing engagement. Indigenous community support for our activity is also contingent upon sharing economic benefits, and that's why we're focused on local employment and procurement. In 2019, we spent CAD 225 million on procurement with Indigenous businesses and 72% of our workforce was local, with 36% of our procurement coming from local suppliers. I want to move into slide 27. I want to spend just a moment talking about inclusion and diversity. This is an issue that is very much at the top of our minds right now with recent events that have both shocked and saddened us.
It's clear that as a society, we need to do more to combat racism and keep each other safe. At Teck, we recognize that all employees have a right to work in an environment that supports diversity and is free from discrimination and harassment. That's why we have a strong inclusion and diversity policy, and we work to actively implement our global harassment policy and our code of ethics. We also recognize that the world is evolving in the light of COVID-19, and while we have a number of family-friendly policies and programs in place, we are working towards an expanded remote work policy to further enhance workplace flexibility. On gender diversity, we've implemented programs to attract and retain a greater number of women at Teck and we're seeing progress. In 2018, women comprised 33% of new hires at Teck, about one-third of all our new hires.
25% of independent directors on our board are women, including our board chair. Women now make up 20% of our total workforce, up from 14% just five years ago. We've set the pace for a range of projects and programs to promote inclusion and diversity across our company. Finally, we ensure that no matter the topic or the concern, employees can raise them in strict confidence at any time through our 24/7 Doing What's Right hotline. Accountability for sustainability performance is embedded throughout our company. Our compensation program is directly linked to sustainability performance through individual, department, and company-wide objectives. At a minimum, performance against sustainability-related objectives affects at least 10%-20% of an individual's annual bonus. Business units also have sustainability metrics built into their bonus structures.
As you might expect, executive compensation, including my compensation and Don Lindsay's, and our business unit leaders' compensation, are also closely linked with sustainability, in particular with the safety and well-being of our people, our relationship with communities where we operate, our use of energy, and our carbon intensity, and environmental impacts. Our sustainability performance is tracked on an annual basis, especially as it relates to our sustainability goals, and it is reported in our Management Information Circular and our sustainability report. For more detail on our sustainability performance, we have a range of ESG resources available for investors. On our website, you can find our annual financial and sustainability reports, our TCFD aligned report, and more. All of our sustainability data is available, and as Don Lindsay mentioned, it's also available through the new SASB index. We also provide input to CDP and the UN Global Compact Report.
All of these resources are available on our online disclosure portal, which we update throughout the year with new data as it becomes available. When it comes to sustainability, we are focused on continuing to improve our social and environmental performance as a key element of our business and long-term value creation strategy. This will mean a safer and more diverse workforce, it will mean less carbon emissions and a reduced environmental footprint, and it will mean even stronger relationships with communities and Indigenous peoples. With that, we would be happy to answer your questions, and I'll turn the call back now, Naomi, to you.
Thank you. Once again, please press star one at this time if you have a question. There will be a brief pause while participants register. Thank you for your patience. Once again, please press star one at this time if you have a question. The first question is from Greg Barnes of TD Securities. Please go ahead.
Yes, thank you. Marcia, that slide 24 on the Elk Valley Water Quality Plan, I think that's the clearest plan we've seen. Is that all of the water treatment that you require in the Elk Valley mapped out there? I assume that the way you've mapped it out means that the government is onside and in favour for all the saturated rock fill, facilities happen.
Yeah. I'll start, Greg, and then I can turn it over to Robin, who's on the call too. Yes, that does outline our plan for water treatment. Yes, we do have support from government for proceeding with our strategy on saturated rock fill. I don't know, Robin, if you want to add anything.
I'm not sure what to add, I agree. I think I think the chart itself gives a pretty good sense of what the plan is, and it's pretty much locked down now. As Marcia Smith said, we've got approval to And we're in the middle of constructing the first touch or the largest expansion of the saturated rock fill in Elk Valley, we're doubling the capacity there. I'm not sure what to add to that.
My understanding, Robin, was that the government was studying this and trying to figure out if they were happy with the way that the saturated rock fill formed and stripping out the selenium. I guess with this plan, that is all taken care of now as you agree with you that's the best route going forward.
Yeah. I would just say, Frank, as I said in my remarks, the ultimate purpose of saturated rock fill is achieving near complete removal of selenium and nitrate. It is achieving what we set out to do, which is to get water treatment online quicker, and it is ultimately more cost effective for us. I think all systems are go. As I said, we've made a lot of progress since we talked about this a year ago on this call.
Great. Thank you.
You're welcome.
Thank you. The following question is from Terence Odsman of BMO. Please go ahead.
Thank you, Operator. Thanks for the presentation and all the details. Maybe it's a similar topic with the COVID and other issues. This actually, this question could go back to some of your previous competitors in the industry, if they're around anymore, for their product. You know that copper alloys and copper itself have antibacterial, antimicrobial properties. I'm actually amazed all through this pandemic how little publicity it has gotten in the public forum. Doesn't matter if it's the news channels or the business channels or the industry journals. Is there anything else that your leadership can do to either brand it in such a way that it becomes a preferred high-value competitive product?
Also as well, I was going back to my notes and looking at those zinc slag issues you illustrated very well about these effects on the fertilizers and also usage and learning abilities and so on and so forth. Is there a branding way or marketing strategy from the way that people have perceived the project as cheap, people think it's not worth it. How can you take the next step whereby it becomes a recognized product not only as it is, but from Teck itself? Thanks.
Terry, thanks very much for your question. It's a really important point for society at large. I'll start with a comment or so and then throw it open to any of my colleagues who want to jump in. We have been pushing it at Teck with our Copper & Health program for a number of years now, and we funded the installation of copper composite material in high-touch surfaces in the intensive care units at Vancouver General Hospital, where they've been testing it. There are a number of aspects that people still need to learn about in terms of what the effects of different cleaning agents and so on over the course of a year or two. So far, it's just had excellent results. We're now supporting it going into, I think, four more hospitals so far.
We've been educating people and pushing the story on a number of fronts. We have seen, during COVID-19, numerous media reports. I get a report sent to me by a friend or colleague or somebody almost every day from some media outlet. You're right, there's still a lot of education to go, and particularly with government that would fund major investment in infrastructure using copper. We did see Toyota, a Canadian auto manufacturer, they were reopening. They applied copper to their high-touch surfaces of railings and so on as part of the COVID-19 restart protocols. Really, we'd like to see that everywhere and also in public transit. Health care obviously has been mentioned, but restaurants, casinos, you name it.
For society at large, it would reduce the risk of infection and make it safer for people to carry on with the normal life that we used to have. Those are some thoughts. I think the International Copper Association has a program pushing it, but you're absolutely right that this is an opportune moment to get that story out and have governments really start to mandate it as a requirement for building infrastructure. I'd open to my colleagues. Anybody else has points they want to add?
It's Marcia Smith. Maybe I'll just add, Don and Terry, as part of our COVID response fund, our CAD 20 million fund, we have allocated actually CAD 1 million for Copper & Health in 2020, and that is designed to do exactly what you just suggested, which is to increase awareness of copper in infection control management. We are looking at projects, and we'll continue to invest in trying to raise awareness so that people understand both at government levels and as Don mentioned, as we've been doing through the healthcare sector in Canada.
There are other uses that people don't think about, like copper clothing is getting more and more popular. I obtained copper-laced masks for my family, and there's several manufacturers of those now. Everything from copper gloves to copper socks and so on. I guess the journey is just getting that message out from public to public.
Well, there's two ways of branding. One is the copper itself. One is the Teck itself. Actually, this conversation goes back to Inco, I must tell you, just a few years ago. Caterpillar came with their boots and their toys and everything else. Inco has an opportunity to get into the Inco stainless steel sinks. Inco this, Inco that. They looked into that. Why can't be Teck? Why it should be anybody else? You get multiple, or your copper price or whatever it is, because you go to The Home Depot today, buy a copper alloy tube for a kitchen, it's being CAD 10 a pound. Why it has to be like CAD 200 a pound, even made of lead?
Okay, we're going to look into that. That's a new suggestion. I remember the Inco stainless steel sink.
Yes.
You're welcome. Make a call.
Thank you.
Thank you. The following question is from Oscar Cabrera of CIBC. Please go ahead.
Oscar Cabrera. Just following on same question theme that Terry raised, Don. The coal industry and the oil industry are getting a pretty hard rub with investors in terms of the environment. You have touched on this. I would be interested to hear what you have planned to differentiate the type of coal that you produce versus the thermal coal, which I think most of the comments with regard to the environment come from.
It is a good question, and there is no doubt that it is an education issue that we have been working on. The first point I want to make is for both our production in the oil sands and our production of steelmaking coal, we are at the very low end in terms of carbon emissions per ton of production or barrel of production. I think it is important that as the world moves to energy transition, which we strongly believe in, that while there is still going to be the need for oil, you want to have barrels of oil that have the lowest carbon emissions associated with them. Those are the barrels that should be reducing, and the highest emission barrels should be the ones that are shut down. In terms of steelmaking coal, steelmaking coal is crucial for a low carbon future for the world.
It's a story that we have been working hard from probably September of last year. September till November, Fraser and I, literally hundreds of institutions, and it extended into January, making sure people understood the difference between steelmaking coal and thermal coal. I can say now that probably 98% or 99% of investors do understand the difference. They're just worried that someone else doesn't understand the difference. In fact, pretty much everybody does understand the difference. We still have to keep pushing that story, probably in every investor meeting that we do have, and also with the media at large and the population at large. If you want a low carbon future on this planet, you can't do it without steel for everything from hospitals to our healthcare, for rapid transit, for lower footprints, for windmills and so on and so on.
I think collectively, we all have to do our best to make sure people understand that.
Great. If I may, there's been an increase or a spike in cases of COVID-19 in South America. I was wondering if you could provide an update of what's happening in QB2 and the getting people back to construction site as ever.
We are making some progress there, but I'm going to turn that over to either Dale or Alex. I see Dale on the line. Dale, over to you.
Thanks, Don. Currently, we remain suspended for construction. We do have care and maintenance staff, and we do have a small number of critical activities that are progressing on site. We're spending a lot of our time focused on what it would take to do a full restart in construction. We're obviously monitoring the situation for COVID in the country and in particular in the Tarapacá region, including medical capacity. A lot of our workers come from across the country, and it's not just workers at site, but it's the transportation of workers that we're concerned about as well. For now, construction remains suspended. Some critical activities carrying on, and we're continuing, especially at this time, while Chile is still peaking for COVID cases, watching the country very carefully and the region.
Thank you all.
Thank you. Following question is from Carlos De Alba of Morgan Stanley. Please go ahead.
Thank you very much. Good morning, everyone. Marcia, on the presentation, she said slide 22. Can you elaborate a little bit more as to what are the water-scarce regions that you have identified? Is it mostly Peru and Chile? Any more color would be appreciated. Thank you.
Yeah. We're really referring to Chile, where we have our QB2 project and permanent growth, so we have operations in Chile that we manage. That is largely what we're referring to in terms of our goals. I think if we
If we brought projects on in other water-stressed regions, like Peru and other places, we would apply these rules to them as well.
Thank you.
Okay.
Thank you. The following question is from Derrick Ip of BMO Global Asset . Please go ahead.
Hear me all right? Hi, everyone at Teck Resources. Doing well during the pandemic. Very excited to read your new sustainability-
Melanie, it looks like maybe we have Derrick cutting out.
Yes. Mr. Ip, if you could press star one again, I will open your line again. I do apologize. Okay, once again, Mr. Ip, if you could press star one.
He may not realize that he has been muted, I don't think.
His line is now open. Please go ahead, Derrick Ip.
Hello. Can you hear me okay?
Yes.
Yes, thank you. Hi. Sorry. Yes. Very excited to read your new sustainability report and the presentation as well, as you have made several new and important strategies for the clean water, carbon neutrality as well. We did particularly welcome the carbon neutral commitment on climate change, which I think covers Scope 1 and 2. I'm quite curious about your views on the Scope 3 emissions, and whether you have done any accounting on that, as I can see on slide 18 that currently it is kind of hidden from chart when we compare with the If there is any comment on that, on those Scope 3 emissions, we'll be very keen to hear more of the details. Thank you.
Marcia, I missed part of that question. It was breaking up a bit. Did you get it?
Yeah, it was breaking up for me, too. I think I got it, which was, Derrick, I think you're asking if we have any specific Scope 3 emissions goals. While we don't have any specific goals at this point around Scope 3, it's obviously something that we're paying a lot of attention to and we're looking at. As I mentioned in our comments, we are looking at and following technologies like carbon capture and storage and trying to understand those as well. We are seeing, of course, steel mills are looking very closely at their emissions, so that's something important that we're following. Maybe I'll turn it over to Chris Anderson, who's on the line with us as well for more color.
I would say in terms of a specific goal at this point, we don't have a specific Scope 3 goal, but obviously this is an area that we're watching very closely and we'll see at some point if there is a role that we can play in thinking about Scope 3 emissions. I don't know, Chris, if you want to add anything?
Just one minor note I'd add, which is we have been disclosing our Scope 3 emissions for the most material Scope 3 emissions in our sustainability report, so that information's been in a number of our reports for a few years. Yeah, I'd repeat just what you said, Marcia, which is, we are monitoring it, we are looking at what the steel sector and other sectors are doing, and keeping an eye on where those opportunities are going to emerge.
Okay.
Thank you. The following question is from Michael Pu of Sustainalytics. Please go ahead.
Hi, good morning, everyone. Thanks for the presentation. Hi, Chris. I wanted to, one, make a quick correction. You mentioned in the opening slides that you were tied for second in Sustainalytics ratings. I would say I'm looking at the April ESG risk rating report. You guys updated the controversies and you're number one in diversified metals. Congratulations there. My question follows on from Derrick's a little bit more, looking at the ResponsibleSteel Initiative and also, I'm sure you're aware, the TPI paper on Scope 3 and carbon pricing for diversified metals. I'm curious as to how you are contributing to those discussions at RSI on the double counting for coal and iron ore, though I know you're not in iron ore, and then how that also translates into the, I see you're already going to the copper equivalent for carbon diversified metals.
How you might be navigating and contributing to those discussions as far as establishing the standards go?
Thanks. I'll start, and then, Michael, and then maybe Chris can jump in as well. Also maybe Katie Seto, who's on the line with us. We are just actually in the process of joining ResponsibleSteel. We've been talking to them since the very, very early days and have spent quite a bit of time early on talking about the standards and in particular standards like TSM and how those might be integrated. That's a conversation. I'm trying to think how long it's been going on. Maybe two years. Maybe it's not that long. I can't quite remember. We have been talking to them for a long time, and we are now just getting the process of formally joining them and so that we can continue to work with them and others now that that's really getting some traction.
Maybe I'll turn over to Chris and Katie if they have any more color to add on the harder maintenance part, about some of these issues.
Yeah. Thanks, Marcia Smith. It's Chris Anderson. Michael, thanks for the question. We're tracking both, and I know exactly what you're referencing there, talking about the double counting. We've joined some of the conversations with the ICMM to see how to go through their accounting. It's something that we'll continue to monitor and engage in, make sure that we're providing some contribution so that they make some reasonable decisions in the end of methodologies. I think it's still a process that they're working through.
Okay. Just thought you guys are kind of straddling the line there. One on the diversified metal side, but also then on the certification and their sourcing on the raw materials for the steel side. I know they're looking and talking with them. They're having the discussions on the double counting. That's all I was just concerned. I'm sure you guys are on top of it, but just wanted to see how you're thinking about it. Thanks.
Okay. Thanks, for the chance. Yeah, I think, as Chris Anderson said, this is definitely an evolving area that we're involved in.
Great. Thank you.
Thank you. The following question is from Anne-Marie Gagnon of BC Investment Management. Please go ahead.
Bonjour. Initially, my question related to the Scope 3 emission reduction target that was tackled already. I see that it's been great for you two to update your long-term greenhouse emission reduction target to 2030, providing investors and stakeholders with more visibility towards the milestone to meet your net zero aspiration by 2050. The plan for carbon neutrality also provides much more nuances and visibility into how you're going to meet those objectives. I think a next step, any considerations to come up with even more of a milestone target to 2040 on your emission reduction front?
Maybe I'll start on that one and then Chris, you can jump in as well. We are just in the process, Anne-Marie, of working with our businesses, in fact, Dale and Robin, who lead our base metals and some of the coal units and the team. We present quite a session, I think, this past week, talking about our implementation plans and how those will unfold at the site level. I don't think we have a plan necessarily today to develop more milestone goals. We've got the ones set in front of us right now. 2050 is a long time away, and I think the world is changing pretty rapidly. We have consistently been updating our sustainability strategy sort of over four to five-year increments. I fully expect that as a result, we will be making those kinds of updates as we head towards 2030, 2040, 2050.
I don't know, Chris, if you want to weigh in there.
Nothing really major to add. The only thing I'd say is, as you said, we do update the strategy every five years. At those times, we try to set both short and long-term goals. I think the 2030, as you mentioned, Anne-Marie, shows that bridging. I think that 2030 goal was set to align with sort of Paris Agreement type action. I think that's going to continue to be our focus, the same way that that's why we set the carbon neutral goals to stay along that pathway.
Thank you.
Thank you. The following question is from Karen Forsman of BMO. Please go ahead.
Thanks. Actually, just a quick follow-up. A few years ago, I asked the same question. I'm just wondering if the progress is such a way that you can talk about it again, the whole sustainability accolade, recognition, the great past, and thanks for the legacy and the existing issues and looking to the future. Would you say that today, because all this effort that Teck put on the table, has it impacted the timeline to secure permits faster than anybody else? Are you a partner of choice? Governments look at Teck saying that it's a great company because all the efforts they do, that means your financing is at a lower cost, your cost of capital is impacted.
This is just for metrics that are you using, saying that this is where we achieved and we have got to do more or we have enough to be done.
Thanks, Karen. I think it's an excellent question, and I'll start and maybe Marcia or others could follow.
We do get a very good reception and we have a strong dialogue with governments all over where we operate, and it's a high priority that we maintain that right from my office throughout the different members of management, Chair of Board every now and then, and so on. You have to start with relationships and quality dialogue, whether it be with the communities, business people, government, and shareholders for cost of capital. We put a strong emphasis on that. It is difficult to measure whether if we weren't ranked as highly or we hadn't adopted the leading practices, is there a cost to capital, would you hire, whether it be share price or interest rates on debt, that sort of thing. I think it's more about access to capital markets and ability to get a permit at all.
There have been many projects around the world that did not go ahead because they never did get the permits, they never did get community acceptance, and they didn't have good quality dialogue with the government. We had some of those right here in British Columbia in the past. Probably the measure of success is being able to continue to operate and to sometimes get those projects permitted. Whereas if you didn't meet the high standards of practices and sustainability, you'd probably just not be able to continue. Marcia or any others on the team, any other comments on that or any evidence that shows that it does make a difference?
Yeah, maybe I would just add to that, Don. I think we see the impact of our sustainability practices in a couple of ways. One certainly is in recruitment. We consistently hear that people from, whether we're recruiting at the senior VP level to the front lines, we consistently hear that people want to join our company because of our sustainability practices. I think that's a positive and it helps us on that front. When it comes to permits, just to add what Don said, I think a big part of it is building trust with regulators, building trust with indigenous communities. I would say that in our operating areas, we do have strong levels of trust, and certainly here in British Columbia, all of you have been following our Water Quality Plans, and Greg mentioned earlier, and these are very complex ELs.
We have a high level of engagement with the British Columbia government on it, with the Ktunaxa Nation on it, with our communities on it. We've been able to work through that. So far, so good. We are continuing to operate and to solve some pretty complex problems together. I think it is hard to nail that in a very specific way. As Don said, if you look at companies that aren't able to proceed, I think that's maybe the easiest way to measure. Maybe this is the last thing I would say, is a lot of what we're talking about here, our approach to tailing management, our approach to climate change, to inclusion and diversity. These are becoming, for regulators, certainly in the Canadian and Chilean context, these are becoming table stakes.
If you cannot live up to a certain bar, I think the reality is you will not get permits going forward. Yeah. I don't know if that really fully answers your question, but it is an area that is absolutely, I would say, evolving. It's evolving significantly over the last few years. If you think six years ago on this very first call that Don and I did, we sat at the end of our presentation and looked at each other across the table because we didn't have a single question from anybody about our sustainability performance. Today, we're spending tons and tons of time. We're getting lots of questions. I think that the focus on ESG performance is just growing and increasing, and I think ultimately, it is going to translate into advantage to those companies that can demonstrate they're operating at the highest levels.
No, it's true. We have a lot of companies, most of my colleagues on this call and the industry, I think Teck has a story to tell, and the question is, use the leverage to your benefit for all those issues, and I'm sure you are. Don't let it go away because the industry becoming, as you said, Marcia and Don, becoming very selective. The other side, the governments, the competitor, they want to deal with the credibility issue. You are it. Use that leverage as much as I can. Thanks.
Great. I don't know, Fraser, if there's any other questions or Melanie, whether we've got more on the line.
I don't think at this point we do have any more questions on the line, so I think, Marcia, we can hand it over to Don for closing remarks.
Thank you, Fraser. Thank you, Marcia, and thank you all for joining us today. We appreciate the questions. We appreciate your input. If you have any questions that you think about afterwards, please don't hesitate to contact us. If you have any suggestions, there were some good ones here today, we'd love to hear those as well. We look forward to doing this again next year, and we remain absolutely committed to maintaining the rankings that we've been having and to continue to raise the bar on all things sustainability. As I close many meetings at Teck, I'll just say this, it's sort of my mantra. If I repeat it often enough, I hope it all comes true. Please, to all of you, stay healthy, keep the faith. This too shall pass, and all will be well. Thanks very much. This meeting is adjourned.
The conference has now ended. Please disconnect your lines at this time. We thank you for your participation.