exva1

August 21, 2008

Dear Unitholder:

On behalf of the trustees (the “Trustees”) of Fording Canadian Coal Trust (“Fording”) and the directors (“Directors”) of Fording (GP) ULC, we would like to invite you to join us at the special meeting of securityholders of Fording that will be held at 9:00 a.m. (Calgary time) on September 30, 2008 at the Alberta Room at the Palliser Hotel, 133 9th Avenue SW, Calgary, Alberta, T2P 2M3.

At the meeting, you will be asked to approve a plan of arrangement under the Business Corporations Act (Alberta), whereby Teck Cominco Limited (“Teck”) will acquire all of the assets and assume all of the liabilities of Fording. Through the arrangement, unitholders will receive 0.245 of a Teck Class B subordinate voting share and cash in the amount of US$82.00 (which includes the final unitholder distribution of US$3.00) (less any amounts withheld on account of taxes) for each unit of Fording. If the arrangement is completed, no further quarterly or other distributions with respect to the units will be declared or paid to the unitholders. If securityholders authorize the arrangement at the meeting on September 30, 2008, then Teck and Fording expect that all of the conditions to closing will be satisfied or waived on or about that date. If the conditions to closing are satisfied or waived on or about September 30, 2008, then Teck and Fording expect that the arrangement will close on or about October 30, 2008, following the occurrence of a 20 trading day period.

The arrangement has been approved unanimously by the Trustees (with the interested Trustee, being Mr. Seyffert, declaring his interest and excusing himself from the determination to make such recommendation) and the Directors (with the interested Directors, being Messrs. Lindsay and Thompson, declaring their interests and excusing themselves from the determination to make such recommendation) following the report and favourable, unanimous recommendation of the arrangement by the independent committees of Fording and Fording (GP) ULC comprised of independent Trustees of Fording and independent Directors of Fording (GP) ULC, respectively (the “Independent Committees”). In doing so, the Trustees and the Directors determined that the arrangement is fair to the unitholders of Fording (other than Teck and its affiliates) and in the best interests of Fording, and authorized the submission of the arrangement to the securityholders of Fording for their approval at a special meeting of the securityholders. The Trustees and the Directors also have determined unanimously (with interested Trustees and Directors, as applicable, excusing themselves from the determination to make such recommendation) to recommend to the unitholders of Fording that they vote in favour of the arrangement.

The agreement with Teck is the culmination of the strategic review process carried out under the direction of the Independent Committees that was commenced in June 2007 and publicly announced in December 2007. The Independent Committees considered a number of alternatives and contacted a number of potential acquirors as part of such review. Various acquisition structures were discussed with several parties, including the structure that has been agreed with Teck. Ultimately, no other party made a proposal that was superior to the Teck proposal.

The agreement with Teck was negotiated by the Independent Committees at arm’s length and was reached after extensive negotiations with Teck with respect to both transaction value and transaction terms.

In making their determinations, the Trustees, the Directors and the Independent Committees considered, among other things, a fairness opinion delivered by RBC Capital Markets to the Trustees, the Directors and the Independent Committees, to the effect that, as of July 28, 2008 and based upon and subject to the analyses, assumptions, qualifications and limitations set forth in the fairness opinion, the consideration to be received under the arrangement was fair, from a financial point of view, to the holders of units (other than Teck and its affiliates). A copy of RBC Capital Markets’ fairness opinion is included as Appendix C to the management information circular accompanying this letter.

In addition to the fairness opinion delivered by RBC Capital Markets, the Trustees, the Directors and the Independent Committees considered, among other things, an independent valuation delivered by National Bank Financial Inc. to the Trustees, the Directors and the Independent Committees, to the effect that, as of July 28, 2008 and based upon and subject to the analyses, assumptions, qualifications and limitations set forth in the independent valuation, the fair market value of the units was in the range of CDN$79.00 to CDN$99.00 per unit. A copy of National Bank Financial Inc.’s independent valuation is included as Appendix D to the management information circular accompanying this letter.

To become effective, the resolution approving the arrangement must be approved by: (a) at least 662/3% of the votes cast by holders of units present in person or represented by proxy and entitled to vote at the special meeting, voting separately as a class; (b) at least 662/3% of the votes cast by holders of units and the holders of the exchange options and the phantom units present in person or represented by proxy and entitled to vote at the special meeting, voting together as a single class; and (c) a simple majority of the votes cast by unitholders (excluding the votes cast by Teck and certain other parties related to or affiliated with Teck that must be excluded in accordance with applicable securities laws) present in person or represented by proxy and entitled to vote at the special meeting. Ultimately, the choice to remain as an independent public income trust or to approve the arrangement with Teck is a decision for you, the unitholders, to make. Your independent Trustees and independent Directors recommend that you vote FOR the arrangement with Teck. Each of your Trustees and the Directors intends to vote his or her units and phantom units in favour of the resolution approving the arrangement.

We are enclosing a notice of special meeting, a management information circular for the meeting, a form of proxy and a letter of transmittal which will only be received by registered securityholders. The management information circular and the appendices attached to it, which we urge you to read carefully in consultation with your financial, legal or other professional advisor, describe the arrangement and include certain other information (including the full text of the arrangement agreement relating to the arrangement, the independent valuation and the fairness opinion) to assist you in considering the arrangement. You may also obtain more information about Fording and Teck at the website maintained by the Canadian Securities Administrators at www.sedar.com and at the website maintained by the U.S. Securities and Exchange Commission at www.sec.gov.

Your vote is important regardless of how many securities you own. We hope that you will be able to attend the special meeting or submit a proxy.

If, like most unitholders, you hold units through a broker, investment dealer, bank, trust company or other intermediary, you should follow the instructions provided by your intermediary to ensure your vote is counted at the special meeting and you should arrange for your intermediary to complete the necessary transmittal documents to ensure that you receive payment for your units if the proposed arrangement is completed.

Whether or not you plan to attend the meeting in person, if you are a registered unitholder, please vote by completing the enclosed form of proxy and returning it in the envelope provided for this purpose, or by following the procedures for either telephone or internet voting provided in the accompanying management information circular. To be used at the meeting, proxies must be received by our transfer agent, Computershare Investor Services Inc., at 100 University Avenue, 9th Floor, Toronto, Ontario, M5J 2Y1, Canada (Attention: Proxy Department) before 12:00 p.m. (Calgary time) on September 29, 2008 (or otherwise at least 48 hours (excluding Saturdays, Sundays and holidays) prior to the time set for any adjournment or postponement of the original meeting). We also encourage registered unitholders who choose not to dispose of their units on the TSX or the NYSE to complete, sign, date and return the enclosed letter of transmittal, together with your unit certificate(s), at least two business days prior to the effective date of the arrangement which will assist Teck in arranging for the prompt payment in respect of your units if the proposed arrangement is completed.

If you hold phantom units or exchange options, you will receive-an instruction letter containing instructions with respect to the meeting and voting procedures.

NOTICE OF SPECIAL MEETING OF SECURITYHOLDERS

NOTICE IS HEREBY GIVEN that a special meeting (the “Meeting”) of the holders (“Unitholders”) of units (“Units”), holders of exchange options and holders of phantom units (holders of exchange options, holders of phantom units and Unitholders collectively, the “Securityholders”) of Fording Canadian Coal Trust (“Fording”) will be held at the Alberta Room at the Palliser Hotel, 133 9th Avenue SW, Calgary, Alberta, T2P 2M3, on September 30, 2008 commencing at 9:00 a.m. (Calgary time) for the following purposes:


	1.	to consider, pursuant to an interim order of the Court of Queen’s Bench of Alberta dated [August 26], 2008, as the same may be amended (the “Interim Order”), and, if deemed advisable, to pass, with or without variation, a special resolution of Securityholders of Fording, the full text of which is attached to the accompanying management information circular (the “Circular”) as Appendix A, to approve an arrangement (the “Arrangement”) under Section 193 of the Business Corporations Act (Alberta) involving, among other things, the acquisition by Teck Cominco Limited (“Teck”) of all of the assets and assumption of all of the liabilities of Fording, all as more fully set forth in the Circular; and

	2.	to transact such other business as may properly be brought before the Meeting and any postponement(s) or adjournment(s) thereof.

The full text of the arrangement agreement entered into in respect of the Arrangement and the related transactions, the plan of arrangement (the “Plan of Arrangement”) implementing the Arrangement and the Interim Order are attached as Appendix B, Appendix E and Appendix F, respectively, to the Circular.

The trustees of Fording and the directors of Fording (GP) ULC (with interested trustees and directors, as applicable, excusing themselves from the determination to make such recommendation) unanimously recommend that Unitholders vote FOR the resolution approving the Arrangement. Only Securityholders of record at the close of business on August 26, 2008, the record date for the Meeting, will be entitled to notice of, and to vote at, the Meeting or any postponement(s) or adjournment(s) thereof.

Whether or not you plan to attend the Meeting in person, if you are a registered Unitholder, please vote by completing the enclosed form of proxy and returning it in the envelope provided for this purpose, or by following the procedures for either telephone or internet voting provided in the accompanying Circular. Non-registered, beneficial Unitholders must follow the instructions provided by their broker, investment dealer, bank, trust company or other intermediary to ensure that their vote is counted at the Meeting and should contact their broker, investment dealer, bank, trust company or other intermediary to instruct them to deliver their Units to the depositary under the Arrangement. If you do not vote, or do not instruct your broker, investment dealer, bank, trust company or other intermediary how to vote, you will not be considered to be present in person or represented by proxy for the purpose of approving the resolution approving the Arrangement. The Units represented by a properly executed proxy will be voted on any ballot that may be conducted at the Meeting in accordance with your instructions and, if you specify a choice with respect to any matter to be acted upon, your Units shall be voted accordingly. In the absence of instructions, your Units will be voted FOR each of the matters referred to in the proxy.

If you are a holder of phantom units or exchange options, you will receive an instruction letter containing instructions with respect to the Meeting and voting procedures.

Pursuant to the Plan of Arrangement and the Interim Order, registered Unitholders have been granted the right to dissent in respect of the Arrangement and be paid the fair value of their Units. This dissent right and the procedures for its exercise are described in the Circular under the heading “Dissenting Registered Unitholders’ Rights”, in the Interim Order and in the Plan of Arrangement. Only registered Unitholders are entitled to exercise rights of dissent. Failure to follow exactly the procedures set forth in the Plan of Arrangement and in the Interim Order will result in the loss or unavailability of any right of dissent. Registered Unitholders considering exercising their rights of dissent should consult their own legal counsel and tax and investment advisors.

The Circular provides additional information relating to matters to be dealt with at the Meeting and is deemed to form part of this notice. Any adjourned or postponed meeting resulting from an adjournment or postponement of the Meeting will be held at a time and place to be specified either by Fording before the Meeting or by the Chair of the Meeting.

FORDING CANADIAN COAL TRUST

MANAGEMENT INFORMATION CIRCULAR

This Circular is furnished in connection with the solicitation of proxies by and on behalf of the management of Fording. The accompanying form of proxy is for use at the Meeting and at any adjournment(s) or postponement(s) of the Meeting and for the purposes set forth in the accompanying Notice of Meeting. A glossary of certain terms used in this Circular can be found on pages 130 to 141 of this Circular.

NOTICE TO SECURITYHOLDERS IN THE UNITED STATES

NEITHER THE ARRANGEMENT NOR THE SECURITIES ISSUABLE IN CONNECTION WITH THE ARRANGEMENT HAVE BEEN APPROVED OR DISAPPROVED BY THE SEC OR THE SECURITIES REGULATORY AUTHORITIES IN ANY STATE, NOR HAS THE SEC OR THE SECURITIES REGULATORY AUTHORITIES IN ANY STATE PASSED UPON THE FAIRNESS OR MERITS OF THE ARRANGEMENT OR UPON THE ADEQUACY OR ACCURACY OF THE INFORMATION CONTAINED IN THIS CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.

The Class B Shares to be issued under the Arrangement have not been registered under the 1933 Act and are being issued in reliance on the exemption from registration set forth in Section 3(a)(10) of the 1933 Act on the basis of the approval of the Court as described under “Principal Legal Matters — United States Securities Laws Considerations” in this Circular.

Fording is an unincorporated open-ended mutual fund trust established under the laws of the Province of Alberta, Canada. Fording ULC is an unlimited liability company organized under the Companies Act (Nova Scotia). Teck is a corporation governed by the Canada Business Corporations Act. Fording Arrangement Corp. is a corporation existing under the laws of the Province of Alberta, Canada. The proxy solicitation rules under the 1934 Act are not applicable to Fording, Fording ULC or Fording Arrangement Corp. or this solicitation, and, accordingly, this solicitation is not being effected in accordance with such rules. This solicitation of proxies is not subject to the requirements of Section 14(a) of the 1934 Act by virtue of an exemption applicable to proxy solicitations by foreign private issuers as defined in Rule 3b-4 under the 1934 Act. Securityholders should be aware that disclosure requirements under Canadian Securities Laws may be different from requirements under U.S. Securities Laws relating to incorporated and unincorporated entities. In connection with the Arrangement, Fording, Fording ULC, Fording Arrangement Corp. and Teck will file with the SEC a transaction statement (the “Schedule 13E-3”) under Section 13(e) of the 1934 Act and Rule 13e-3 of the 1934 Act. The Schedule 13E-3 will incorporate certain portions of this Circular.

Likewise, information concerning the mineral properties of Fording and Teck has been prepared in accordance with the requirements of Canadian Securities Laws, which differ from the requirements of U.S. Securities Laws and thus may not be comparable to similar information disclosed by U.S. companies subject to the reporting and disclosure requirements of the SEC. Under United States standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time of the reserve determination, and the SEC does not recognize the reporting of mineral deposits which do not meet the SEC Industry Guide 7 definition of “Reserve”. In accordance with Canadian National Instrument 43-101-Standards of Disclosure for Mineral Projects, the terms “mineral reserve”, “proven mineral reserve”, “probable mineral reserve”, “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” used in this Circular or in the documents incorporated by reference in this Circular are defined in the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) Definition Standards for Mineral Resources and Mineral Reserves adopted by the CIM Council on December 11, 2005. Estimates of coal mineral reserves and coal mineral resources have been prepared and classified using guidance from Paper 88-21 of the Geological Survey of Canada: A Standardized Coal Reserve/Resource Regulatory System for Canada, as amended. While the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are recognized and required by NI 43-101, the SEC does not recognize them. Mineral resources are reported separately and do not include that portion of mineral resources that are classified as mineral reserves. That portion of a mineral resource which is not classified as a mineral reserve does not have demonstrated economic value. Inferred mineral resources have a high degree of uncertainty as to their existence and as to whether they can be economically or legally mined. Under Canadian Securities Laws, estimates of inferred mineral resources may not form the basis of an economic analysis. It cannot be assumed that all or any part of

an inferred mineral resource will ever be upgraded to a higher category. Therefore, Securityholders are cautioned not to assume that all or any part of an inferred mineral resource exists, that it can be economically or legally mined, or will ever be upgraded to a higher category. Likewise, Securityholders are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be upgraded into mineral reserves.

Financial statements included or incorporated by reference in this Circular have been prepared in accordance with Canadian GAAP, which differs from U.S. GAAP in certain material respects, and thus they may not be comparable to financial statements of U.S. companies. Unitholders should be aware that the purchase by Fording of their Units in exchange for Class B Shares and the other distributions as described in this Circular may have tax consequences in both the United States and Canada. Such consequences for Unitholders who are resident in, or citizens of, the United States may not be described fully in this Circular. See “Certain Tax Considerations for Unitholders-Certain Canadian Federal Income Tax Considerations” and “Certain Tax Considerations for Unitholders-Certain United States Federal Income Tax Considerations” in this Circular.

The enforcement by Unitholders of civil liabilities under U.S. Securities Laws may be affected adversely by the fact that Fording and Fording Arrangement Corp. were organized or formed under the laws of the Province of Alberta, Fording ULC was organized under the Companies Act (Nova Scotia) and Teck is governed by the Canada Business Corporations Act and that some or all of their respective trustees, directors, officers and the experts named in this Circular are not residents of the United States and that all or a substantial portion of their respective assets may be located outside the United States. You may not be able to sue a corporation organized under the laws of the Province of Alberta, a trust formed under the laws of the Province of Alberta, an unlimited liability company organized under the laws of Nova Scotia or a Canadian federally incorporated company or their respective trustees, directors or officers in a Canadian court for violations of U.S. Securities Laws and it may be difficult to compel these entities and their respective affiliates to subject themselves to a judgment by a U.S. court.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Circular and the information incorporated by reference in this Circular contain “forward-looking statements” and “forward-looking information” under applicable securities laws (collectively, the “forward-looking statements”) relating, but not limited to, Fording’s and Teck’s expectations, intentions, plans and beliefs. Forward-looking statements can often be identified by forward-looking words such as “anticipate”, “believe”, “expect”, “goal”, “plan”, “intend”, “estimate”, “optimize”, “may”, “will” or similar words suggesting future outcomes, or other expectations, intentions, plans, beliefs, objectives, assumptions or statements about future events or performance.

Unitholders are cautioned not to place undue reliance on forward-looking statements. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, of both a general and specific nature, that could cause actual results to differ materially from those suggested by the forward-looking statements or contribute to the possibility that predictions, forecasts or projections will prove to be materially inaccurate. In evaluating these statements, Unitholders should specifically consider various factors, including the risks outlined under the headings “Risk Factors Relating to the Arrangement”, “Information Concerning Fording-Risk Factors Relating to Fording” and “Information Concerning Teck-Risk Factors Relating to Teck” in this Circular, under the heading “Risk Factors” in Fording’s Annual Information Form dated March 17, 2008, under the heading “Key Risks and Uncertainties” in the Management’s Discussion and Analysis for Fording as at and for the year ended December 31, 2007 and under the

heading “Description of the Business — Risk Factors” in Teck’s Annual Information Form dated March 19, 2008, which may cause actual results to differ materially from any forward-looking statement.

Forward-Looking Statements of Fording

Statements in this Circular relating to the magnitude or quality of mineral deposits are deemed to be forward-looking statements. The reliability of such statements is affected by, among other things: uncertainty involving geology of mineral deposits; uncertainty of estimates of their size or composition; uncertainty of projections relating to costs of production and transportation or estimates of market prices for the mineral; the possibility of delays in mining activities; changes in plans with respect to exploration, development projects or capital expenditures; and various other risks including those relating to health, safety and environmental matters. Other forward-looking statements of Fording contained in this Circular include estimates regarding the period during which the current prices for metallurgical coal can be sustained as well as estimates of future coal prices; the effect of the SIFT Rules on Fording, the cash available for distribution in the event that Fording becomes taxable commencing in 2011 and the effect on the value and trading price of the Units in such circumstances; Fording’s belief that it will be able to obtain various regulatory approvals required by it in connection with the Arrangement; Fording’s estimates of the production capacity of Fording’s operations; Fording’s planned capital expenditures and its estimates of reclamation and other costs related to environmental protection; Fording’s future capital and production costs and production levels, including the costs and potential impact of complying with existing and proposed environmental laws and regulations in the operation and closure of various operations; prices and price volatility for equipment and supplies that Fording uses in its business and the availability of equipment and supplies; Fording’s cost reduction and other financial and operating objectives; Fording’s exploration, environmental, health and safety initiatives; the availability of qualified employees for Fording’s operations; the effect of rail and port capacity constraints on Fording’s business; the satisfactory negotiation of collective agreements with unionized employees; the outcome of legal proceedings and other disputes in which Fording is involved; general business and economic conditions; the outcome of Fording’s annual coal sales negotiations; and Fording’s distribution policy.

The forward-looking statements of Fording are based, in part, upon certain assumptions made by Fording, including, but not limited to: no material disruption in production; no material variation in anticipated coal sales volumes, coal prices or cost of product sold; no material variation in the forecasted yields, strip ratios, haul distances and productivity for each mine in which Fording has an interest; no material increases in the global supply of coking coal other than what is currently projected by management; significant quantities of weaker coking coals will not be substituted for hard coking coal; continued strength in global steel markets; no material disruption in construction or operations at mine sites; no variation in availability or allocation of haul truck tires to the Partnership during 2008; an absence of labour disputes in the forecast period; no material variation in the anticipated cost of labour; no material variations in markets and pricing of metallurgical coal other than anticipated variations; no material variation in anticipated mining, energy or transportation costs; contracted levels of rail and port availability with no material disruption in rail service and port facilities; no material delays in the current timing for completion of ongoing projects; financing will be available on terms favourable to Fording and the Partnership; no material variation in the operations of the Partnership’s customers which could impact coal purchases; no material variation in historical coal purchasing practises of customers; existing customer inventories will not result in decreased sales volumes; parties execute and deliver contracts currently under negotiation; and no material variations in the current taxation environment other than those that have already been announced.

Forward-Looking Statements of Teck

The forward-looking statements of Teck include but are not limited to, the following: Teck’s proposed acquisition of the assets of Fording, the impact of that acquisition on Teck’s earnings and cash flow, and the integration risks associated with that acquisition, prices and price volatility for zinc, copper, coal, gold and other products and commodities that Teck produces and sells as well as sulphuric acid, oil, natural gas and petroleum products; changes in foreign currency exchange rates; the long-term demand for and supply of zinc, copper, coal, gold and other products and commodities that Teck produces and sells; the sensitivity of Teck’s financial results to changes in metals and minerals prices (including premiums realized over London Metal Exchange cash and other benchmark prices); treatment and refining charges; Teck’s strategies and objectives; Teck’s interest and other expenses; Fording and Teck’s tax position and the tax rates and royalty rates applicable to Fording and Teck; political unrest or instability in countries such as Peru and its impact on Teck’s foreign assets, including Teck’s interest in the Antamina copper-zinc mine; the timing of decisions regarding the timing and costs of construction and production with respect to, and the issuance of, the necessary permits and other

authorizations required for, certain of Teck’s development and expansion projects, including, among others, the Fort Hills Project and the Equinox and Frontier oil sands project in Alberta and the Andacollo hypogene copper-gold deposit in Chile; Teck’s estimates of the quantity and quality of its mineral reserves and resources and oil resources; the production capacity of Teck’s operations; Teck’s planned capital expenditures and its estimates of reclamation and other costs related to environmental protection; Teck’s future capital and production costs and production levels, including the costs and potential impact of complying with existing and proposed environmental laws and regulations in the operation and closure of various operations; prices and price volatility for commodities, equipment and supplies that Teck uses in its business; Teck’s cost reduction and other financial and operating objectives; Teck’s exploration, environmental, health and safety initiatives; the availability of qualified employees for Teck’s operations, including its new developments; the satisfactory negotiation of collective agreements with unionized employees; the outcome of legal proceedings and other disputes in which Teck is involved; general business and economic conditions; the outcome of Teck’s annual coal sales negotiations and negotiations with metals and concentrate customers concerning treatment charges, price adjustments and premiums; and Teck’s dividend policy.

Inherent in forward-looking statements are risks and uncertainties beyond Teck’s ability to predict or control, including risks that may affect operating or capital plans, including the risk of cost escalation; risks generally encountered in the development of mineral and oil and gas properties such as unusual or unexpected geological formations, unanticipated metallurgical difficulties, delays associated with permit appeals, ground control problems, adverse weather conditions, process upsets and equipment malfunctions; risks associated with labour disturbances and unavailability of skilled labour; fluctuations in the market price of commodities which are cyclical and subject to substantial price fluctuations; risks created through competition for mining and oil and gas properties; risks associated with lack of access to markets; risks associated with mineral and oil and gas reserves and resource estimates; risks posed by fluctuations in exchange rates and interest rates, as well as general economic conditions; risks associated with environmental compliance and changes in environmental legislation and regulation; risks associated with dependence on third parties for the provision of transportation and other critical services; risks associated with non-performance by contractual counterparties; risks associated with aboriginal title claims and other title risks; social and political risks associated with operations in foreign countries; risks of changes in tax laws or their interpretation; and risks associated with tax reassessments and legal proceedings.

Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in, or incorporated by reference into, this Circular. Such statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about: general business and economic conditions; interest rates and foreign currency exchange rates; the supply and demand for, deliveries of, and the level and volatility of prices of zinc, copper, coal and gold and other primary metals and minerals as well as oil, natural gas and petroleum products; the timing of the receipt of regulatory and governmental approvals for development projects and other operations; the availability and costs of financing for development projects and potential acquisitions; Teck’s costs of production and production and productivity levels, as well as those of its competitors; power prices; Teck’s ability to secure adequate transportation for its products; Teck’s ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; Teck’s ability to attract and retain skilled staff; the impact of changes in Canadian-US dollar and other foreign exchange rates on Teck’s financial results; engineering and construction timetables and capital costs for development and expansion projects; costs of closure of Teck’s various operations; market competition; the accuracy of Teck’s reserve and resource estimates (including with respect to size, grade and recoverability) and the geological, operational and price assumptions on which these are based; premiums realized over London Metal Exchange cash and other benchmark prices; tax benefits and tax rates; the outcome of Teck’s annual coal price and refining and treatment charge negotiations with customers; the resolution of environmental and other proceedings or disputes; Teck’s ability to comply with environmental permits and renew such permits in a timely manner; and Teck’s ongoing relations with its employees and with its business partners and joint venturers.

General

In addition to the foregoing, there are certain risks related to the consummation of the Arrangement including, but not limited to, the delay or failure to obtain the required financing, the failure by Teck to obtain sufficient proceeds from the sale of its Units, any action being taken which results in a material and adverse change including in the anticipated tax treatment of the Arrangement, an absence of liquidity for Units prior to or during the Pre-Closing Period, the failure to satisfy the conditions to consummate the Arrangement, including the approval of the Arrangement Resolution by

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Securityholders in the manner required by the Interim Order; the approval of the Arrangement by the Court; the occurrence of any event, change or other circumstances that could give rise to the termination of the Arrangement Agreement; the delay of consummation of the Arrangement or failure to complete the Arrangement for any other reason (including the delay or failure to obtain the Closing Regulatory Approvals); and the amount of the costs, fees, expenses and charges related to the Arrangement.

The following factors, among others, related to the business combination of Fording and Teck could cause actual results or developments to differ materially from the results or developments expressed or implied by forward-looking statements related to the business combination: the Class B Shares issued in connection with the Arrangement may have a market value or trading price lower than expected; the value of the cash portion of the consideration payable under the Arrangement may fluctuate depending on exchange rate fluctuations for Unitholders whose primary currency is not the US dollar; Teck will be significantly more reliant than it currently is on the results of its coal business; Teck will have incurred significant debt in connection with the business combination and the need to reduce the acquisition debt may adversely affect, among other things, Teck’s ability to acquire other assets or to invest in Teck’s development assets; Teck’s vulnerability to deterioration in economic conditions that affects demand and prices for Teck’s products and Teck’s flexibility in planning for, or reacting to, changes in its business and in the industry; the expected combination benefits from the acquisition of Fording may not be fully realized by Teck or not realized within the expected time frame; and changes in the price of metallurgical coal for which Teck will have increased exposure as a result of the business combination. See “Special Factors-Background to the Arrangement” and “Special Factors-Reasons for the Arrangement from the Perspective of Teck”.

Certain of the forward-looking statements and other information contained in this Circular or incorporated in this Circular by reference concerning the mining industry and Fording’s and Teck’s general expectations concerning the mining industry, Fording and Teck are based on estimates prepared by Fording or Teck using data from publicly available industry sources as well as from market research and industry analysis and on assumptions based on data and knowledge of this industry which Fording or Teck believe to be reasonable. However, although generally indicative of relative market positions, market shares and performance characteristics, these data are inherently imprecise. While neither Fording nor Teck is aware of any misstatement regarding any industry data presented in this Circular, the mining industry involves risks and uncertainties that are subject to interpretation or change based on various factors.

Fording and Teck caution that the list of forward looking statements, risks and assumptions set forth or referred to above is not exhaustive. All forward-looking statements in this Circular are qualified by these cautionary statements. Some of the risks, uncertainties and other factors which negatively affect the reliability of forward-looking statements are discussed in Fording’s and Teck’s public filings with the Canadian and United States securities regulatory authorities. These statements are made as of the date of this Circular and neither Fording nor Teck undertakes to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent expressly required by Law. Neither Fording nor Teck, undertakes any obligation to comment on analyses, expectations or statements made by third parties in respect of Fording, its financial or operating results or its securities or Teck, its financial or operating results or its securities, respectively.

REPORTING CURRENCIES AND ACCOUNTING PRINCIPLES

Unless otherwise indicated, all references to “$” and “CDN$” in this Circular refer to Canadian dollars, and all references to “US$” in this Circular refer to US dollars. The Fording Financial Statements incorporated by reference in this Circular are reported in Canadian dollars and are prepared in accordance with Canadian GAAP. Certain financial information in the Fording Financial Statements is reconciled to U.S. GAAP. For a discussion of the material measurement and recognition differences between U.S. GAAP and Canadian GAAP as they relate to the Fording Financial Statements, see Note 17 to Fording’s audited consolidated financial statements for the year ended December 31, 2007. The Teck Financial Statements incorporated by reference in this Circular are reported in Canadian dollars and are prepared in accordance with Canadian GAAP. Certain financial information in the Teck Financial Statements is reconciled to U.S. GAAP. For a discussion of the material measurement differences between U.S. GAAP and Canadian GAAP as they relate to the Teck Financial Statements, see Note 25 to Teck’s audited consolidated financial statements for the year ended December 31, 2007.

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EXCHANGE RATES

The following table sets forth (a) the noon rates of exchange for the Canadian dollar, expressed in Canadian dollars per US dollar, in effect at the end of the periods indicated, (b) the average noon rates of exchange for such periods, and (c) the high and low noon rates of exchange during such periods, in each case based on the noon rates of exchange as quoted by the Bank of Canada.


	January 1, 2008
	through		Year Ended December 31,
Canadian Dollar per US Dollar	August 19, 2008		2007		2006		2005

Noon rate at end of period		1.0607		0.9881		1.1653		1.1659
Average noon rate for period		1.0116		1.0748		1.1341		1.2116
High noon rate for period		1.0678		1.1853		1.1726		1.2704
Low noon rate for period		0.9719		0.9170		1.0990		1.1507

On July 28, 2008, the last trading day before the announcement of the Arrangement, the rate of exchange was CDN$1.0222 equals US$1.00, based on the noon rate of exchange as quoted by the Bank of Canada.

On August 19, 2008, the rate of exchange was CDN$1.0607 equals US$1.00, based on the noon rate of exchange as quoted by the Bank of Canada.

REFERENCE TO ADDITIONAL INFORMATION

This Circular incorporates by reference important business and financial information about Fording and Teck from documents that are not included in or delivered with this Circular. For a listing of the documents incorporated by reference into this Circular, see “Where You Can Find More Information” beginning on page 117 of this Circular.

You can obtain documents related to Fording and Teck that are incorporated by reference into this Circular, without charge, from the SEC website at www.sec.gov or from the SEDAR website at www.sedar.com, or, for documents related to Fording, by requesting them from the Secretary of Fording, and, for documents related to Teck, by requesting them from the Corporate Secretary of Teck.

INFORMATION CONTAINED IN THIS CIRCULAR

The information contained in this Circular is given as at August 21, 2008, except where otherwise noted and except that information in documents incorporated by reference is given as of the dates noted in those documents.

No person has been authorized by Fording, Fording ULC, Fording Arrangement Corp. or Teck to give information or to make any representations in connection with the Arrangement other than those contained or incorporated by reference in this Circular, and if given or made, any such information or representations should not be relied upon in making a decision as to how to vote on the Arrangement Resolution.

This Circular does not constitute an offer to buy, or a solicitation of an offer to sell, any securities, or the solicitation of a proxy, by any person in any jurisdiction in which such an offer or solicitation is not authorized or in which the person making such an offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such an offer or solicitation.

Unitholders should not construe the contents of this Circular as legal, tax or financial advice and should consult with their own professional advisors in considering the relevant legal, tax, financial or other matters contained in this Circular.

If you hold Units through a broker, investment dealer, bank, trust company or other Intermediary, you should contact your Intermediary for instructions and assistance in voting and surrendering the Units that you beneficially own.

INFORMATION PERTAINING TO TECK

Certain information pertaining to Teck, including forward-looking statements made by Teck, included or incorporated by reference in this Circular and including, but not limited to, information pertaining to Teck under “Summary Term Sheet — Reasons for the Arrangement from the Perspective of Teck; Position of Teck Regarding Fairness of the Arrangement”, “Special Factors — Reasons for the Arrangement from the Perspective of Teck”, “Special Factors — Position of Teck Regarding Fairness of the Arrangement”, “Information Concerning Teck”, and “Unaudited Pro Forma Consolidated Financial Statements of Teck Cominco Limited” attached as Appendix I to this Circular has been furnished by Teck or is based on publicly available documents and records on file with the Canadian Securities Administrators or the SEC and other public sources. See “Documents Incorporated by Reference” in this Circular. Although none of Fording, Fording ULC or Fording Arrangement Corp. have any knowledge that would indicate that any such information is untrue or incomplete, none of Fording, Fording ULC or Fording Arrangement Corp. nor any of their respective trustees, directors or executive officers assumes any responsibility for the accuracy or completeness of such information, nor for any failure by Teck to disclose events which may have occurred or which may affect the completeness or accuracy of such information but which is unknown to them. None of Fording, Fording ULC or Fording Arrangement Corp. has any knowledge of any material information concerning Teck, or concerning the Class B Shares, that has not been generally disclosed.

SUMMARY TERM SHEET

The following is a summary of information contained elsewhere in this Circular. This summary is provided for convenience only and should be read in conjunction with, and is qualified in its entirety by, the more detailed information appearing or referred to elsewhere in this Circular, including the appendices and documents or portions of documents incorporated by reference in this Circular. Certain capitalized words and terms used in this summary and elsewhere in this Circular are defined in the Glossary of Terms found on pages 130 to 141.

Parties to the Arrangement

Fording Canadian Coal Trust

Fording is an open-ended mutual fund trust. Fording holds, through Fording LP and Fording ULC, a 60% interest in the metallurgical coal operations of the Partnership. Fording is a reporting issuer (or its equivalent) in all of the provinces and territories of Canada and files periodic reports with the SEC under the 1933 Act. Fording’s Units are traded on the TSX under the symbol “FDG.UN” and on the NYSE under the symbol “FDG”. For additional information, see “Information Concerning Fording” in this Circular.

Fording (GP) ULC

Fording ULC is an unlimited liability company existing under the Companies Act (Nova Scotia). The officers of Fording ULC are the current officers of Fording. At the time when the Independent Committees were initially formed, the scope of the strategic review was broad and involved, among other things, an examination of internal growth prospects as well as the potential acquisition by Fording of Teck’s interest in the Partnership. The independent Trustees also considered that in light of the knowledge, experience and expertise of each of the independent Directors, the Trustees and ultimately the Unitholders would benefit from the involvement of the independent Directors in evaluating strategic alternatives. Since the Directors are indirectly elected by the Unitholders, both of the Independent Committees determined that it was appropriate for the Independent Committee of Directors to also make recommendations to Unitholders as to the fairness of the Arrangement, whether or not the Arrangement was in the best interests of Fording and how to vote on the Arrangement Resolution and all related matters. See “Information Concerning Fording” in this Circular.

Fording Arrangement Corp.

Fording Arrangement Corp. is a corporation existing under the laws of the Province of Alberta. Fording Arrangement Corp. is a wholly owned subsidiary of Fording that has been incorporated for the purposes of participating in an internal reorganization by Fording that will occur as part of the Arrangement. Pursuant to this reorganization, Fording will cause Fording Arrangement Corp. to purchase from Fording, and Fording will transfer to Fording Arrangement Corp., all of the limited partnership interests in Fording LP held by Fording and all of the issued and outstanding equity securities of Fording ULC held by Fording. Thereafter, and as part of the Arrangement, Teck will acquire all of the shares of Fording Arrangement Corp. from Fording. Fording Arrangement Corp. has not carried on any activities to date other than activities related to its formation and activities in furtherance of the Arrangement. Fording Arrangement Corp. played no role in initiating, structuring or negotiating the terms of the Arrangement Agreement or the Plan of Arrangement. Pursuant to the operation of the Declaration of Trust, Unitholders are entitled to direct the Trustees as to how the shares of Fording Arrangement Corp. are to be voted in connection with the election of directors of Fording Arrangement Corp. at each meeting of the shareholders of Fording Arrangement Corp. at which directors are elected and in respect of certain other matters. Accordingly, the directors of Fording Arrangement Corp. are in effect, elected in accordance with the instructions of the Unitholders and certain other actions of Fording Arrangement Corp. can only be undertaken if authorized by the Unitholders. For additional information see “Information Concerning Fording” in this Circular.

Teck Cominco Limited

Teck is engaged primarily in the exploration for, and the development and production of, natural resources, with interests in mining and processing operations in Canada, Chile, Peru and the United States. Teck is the world’s second largest zinc miner and an important producer of copper. Teck currently holds a 40% direct, and, through its ownership of Units, an approximately 12% indirect interest in the Partnership. An affiliate of Teck is the Managing Partner of the Partnership. Teck is a reporting issuer (or its equivalent) in all of the provinces and territories of Canada and files periodic reports with the SEC under the 1933 Act. The Class A Shares and the Class B Shares trade on the TSX under the symbols

“TCK.A” and “TCK.B”, respectively, and the Class B Shares trade on the NYSE under the symbol “TCK”. For additional information regarding Teck, see “Information Concerning Teck” in this Circular.

Date, Time and Place of the Meeting

The Meeting will be held on September 30, 2008 at 9:00 a.m. (Calgary time), at the Alberta Room at the Palliser Hotel, 133 9th Avenue SW, Calgary, Alberta, T2P 2M3.

Record Date, Meeting Materials and Voting of Proxies for Unitholders

Only Securityholders of record as of the close of business on August 26, 2008, the record date for the Meeting, are entitled to receive notice of and to attend, and to vote at, the Meeting or any adjournment(s) or postponement(s) of the Meeting. Unitholders who become holders of record of Units after August 26, 2008 and who wish to vote at the Meeting must make arrangements with the selling Unitholder to direct how such Units may be voted at the Meeting. As of August 19, 2008, there were 150,175,327 Units outstanding and entitled to vote at the Meeting. In addition, there were 18,632 Exchange Options (exercisable to acquire an aggregate of 18,632 Units) and 151,049.23 Phantom Units (which can be settled for a maximum aggregate of 151,049 Units) outstanding, the holders of which are entitled to vote together with the holders of Units on matters upon which Securityholders are entitled to vote at the Meeting. For additional information, see “Information Concerning Voting at the Meeting” in this Circular.

The Meeting Materials are being sent by Fording directly to Registered Unitholders and Non-Objecting Unitholders resident in Canada, and to Intermediaries for distribution to Objecting Unitholders resident in Canada and all Non-Registered Unitholders resident outside of Canada.

Most Unitholders are Non-Registered Unitholders. Applicable securities laws require Intermediaries to seek voting instructions from Non-Registered Unitholders in advance of the Meeting. Units held through Intermediaries can only be voted in accordance with the instructions received from the Non-Registered Unitholders. In the absence of having obtained specific voting instructions, Intermediaries are prohibited from voting Units held by Non-Registered Unitholders. If you are a Non-Registered Unitholder, please see “Information Concerning Voting at the Meeting — Non-Registered Unitholders” in this Circular. Voting procedures for Registered Unitholders are described under “Information Concerning Voting at the Meeting — Registered Unitholders” in this Circular.

Purpose of the Meeting

At the Meeting, the Securityholders will be asked to vote on the Arrangement Resolution as required by the ABCA and the Interim Order, in the form attached as Appendix A to this Circular. If the Arrangement is completed, Teck will acquire all of the assets of Fording and assume all of its liabilities pursuant to the Arrangement. Through the Arrangement, Unitholders will receive 0.245 of a Class B Share and cash in the amount of US$82.00 (which includes the Final Unitholder Distribution of US$3.00) (less any amounts withheld on account of taxes) per Unit. If the Arrangement Resolution is approved, the Arrangement will be implemented by way of a Court approved plan of arrangement under the ABCA.

See “The Arrangement” in this Circular.

Expected Timing of Arrangement

The Transaction Confirmation Date will occur upon satisfaction or waiver of all of the conditions to the completion of the Arrangement. If the Requisite Level of Approval is obtained at the Meeting, the Transaction Confirmation Date is expected to occur on or about September 30, 2008, the date of the Meeting. On the Transaction Confirmation Date, Fording and Teck will confirm in writing that the conditions to closing are satisfied or waived and publicly announce that the conditions are satisfied or waived. Following the Transaction Confirmation Date, a 20 Trading Day Pre-Closing Period will occur. During the Pre-Closing Period that will follow the Transaction Confirmation Date, the Units will continue to trade on the TSX and the NYSE. Fording and Teck expect that closing will occur on or about October 30, 2008, after such Pre-Closing Period has been completed.

Vote Required to Approve the Arrangement

At the Meeting, Securityholders will be asked to vote to approve the Arrangement Resolution.

Pursuant to the Interim Order, the Arrangement Resolution must be approved by the affirmative vote of:


	•	at least 662/3% of the votes cast at the Meeting by Unitholders present in person or represented by proxy and entitled to vote at the Meeting, voting separately as a class;

	•	at least 662/3% of the votes cast at the Meeting by Securityholders present in person or represented by proxy and entitled to vote at the Meeting, voting together as a single class; and

	•	at least a simple majority of the votes cast by Unitholders (excluding the votes cast by Teck and certain other parties related to or affiliated with Teck that must be excluded, in accordance with applicable securities laws) present in person or represented by proxy and entitled to vote at the Meeting.

In determining whether the minority Unitholder approval described in the third bullet above has been obtained, the votes cast by Teck and certain parties related to or affiliated with Teck must be excluded in accordance with applicable securities laws. See “Principal Legal Matters-Canadian Securities Law Matters” in this Circular. To the knowledge of Fording, after reasonable inquiry, a total of 29,510,871 votes that may be cast on the Arrangement Resolution will be excluded in determining whether minority Unitholder approval for the Arrangement Resolution has been obtained. The Arrangement Resolution must receive the Requisite Level of Approval in order for Fording to seek the Final Order and implement the Arrangement on the Effective Date in accordance with the Final Order.

See “The Arrangement — Required Securityholder Approval” in this Circular.

Voting Procedures and Revocation of Proxies for Unitholders

The procedures by which Unitholders may exercise their right to vote with respect to matters at the Meeting will vary depending on whether Unitholders are Registered Unitholders or Non-Registered Unitholders.

Registered Unitholders

In order to vote with respect to matters being considered at the Meeting, Registered Unitholders must either:


	•	attend the Meeting in person;

	•	sign, date and return the enclosed form of proxy, or such other proper form of proxy prepared for use at the Meeting which is acceptable to the Transfer Agent; or

	•	otherwise communicate their voting instructions in accordance with the instructions set out in the enclosed form of proxy or through the use of another acceptable and proper form of proxy.

If you are a Registered Unitholder, you should carefully review the information set forth under “Information Concerning Voting at the Meeting-Registered Unitholders” in this Circular.

Non-Registered Unitholders

A substantial number of beneficial Unitholders do not hold Units in their own names. Units may be beneficially owned by a person but registered either:


	•	in the name of an Intermediary; or

	•	in the name of a clearing agency (such as CDS or similar entities) of which the Intermediary is a participant.

If Units are shown in an account statement provided to the Unitholder by an Intermediary, in almost all cases those Units will not be registered under the name of the Unitholder in the records of Fording. Please note that only proxies received from Registered Unitholders can be recognized and acted upon at the Meeting. If you are a Non-Registered Unitholder, you should carefully review the information set forth under “Information Concerning Voting at the Meeting-Non-Registered Unitholders” in this Circular.

If you do not vote, or do not instruct your broker, investment dealer, bank, trust company or other Intermediary how to vote, you will not be considered present in person or represented by proxy for the purpose of approving the Arrangement Resolution.

The Units represented by a properly executed proxy will be voted on any ballot that may be conducted at the Meeting in accordance with the instructions of the Unitholder, and if the Unitholder specifies a choice with respect to any matter to be acted upon, the Units shall be voted accordingly. In the absence of instructions, Units will be voted FOR each of the matters referred to on the proxy.

A Registered Unitholder who has given a proxy may revoke the proxy at any time prior to its use by any manner permitted by the Declaration of Trust, including by depositing an instrument in writing, including another completed form of proxy, executed by the Unitholder or by his or her attorney who is authorized by a document that is signed in writing or by electronic signature or, if the Unitholder is a corporation or other form of organization, by its director, officer or attorney properly authorized. A written instrument or other revocation permitted by the Declaration of Trust must be deposited with the Transfer Agent at 100 University Avenue, 9th Floor, Toronto, Ontario, M5J 2Y1, Canada (Attention: Proxy Department) by personal delivery, courier or mail at any time prior to 12:00 p.m. (Calgary time) on September 29, 2008, or otherwise at least 48 hours (excluding Saturdays, Sundays and holidays) prior to the time set for any adjournment or postponement of the original Meeting. A written instrument or other revocation permitted by the Declaration of Trust may also be deposited with the Chair of the Meeting prior to the commencement of the Meeting or any adjournment or postponement of the Meeting. The execution by a Registered Unitholder of a proxy will not affect such Unitholder’s right to attend the Meeting and vote in person provided that the proxy is revoked prior to the commencement of the Meeting in the manner described above.

Objecting Unitholders resident in Canada and all Non-Registered Unitholders resident outside of Canada should contact the Intermediary through which they hold their Units in order to obtain instructions regarding the procedures for the revocation of any voting instructions that they previously provided to their Intermediary.

Non-Objecting Unitholders resident in Canada should contact the Transfer Agent in order to obtain instructions regarding the procedures for the revocation of any voting instructions that they previously provided to the Transfer Agent.

See “Information Concerning Voting at the Meeting” in this Circular.

Instructions for Holders of Phantom Units or Exchange Options

If you hold Phantom Units or Exchange Options, you will receive an instruction letter containing instructions with respect to the Meeting and voting procedures.

Recommendation of the Independent Committees

Having undertaken a thorough review of, and carefully considered, the Arrangement, including consulting with independent financial and legal advisors, the Independent Committees unanimously concluded that the Arrangement is fair to the Unitholders (other than Teck and its affiliates) and in the best interests of Fording and unanimously recommended that the Trustees and the Directors approve the Arrangement and recommend that the Unitholders vote FOR the Arrangement.

See “Special Factors-Recommendation of the Independent Committees” in this Circular.

Position of the Independent Committees as to Fairness

In reaching the conclusion that the Arrangement is substantively fair to the Unitholders (other than Teck and its affiliates), and that the Arrangement is in the best interests of Fording, the Independent Committees considered and relied upon a number of factors including the following:


	•	The Independent Committees were formed in June 2007 and were given a broad mandate to consider a wide range of alternatives, including an acquisition of all of Fording’s Units by a third party, a sale of Fording’s assets, including its interest in the Partnership, a combination, reorganization or similar form of transaction, an acquisition of Teck’s 40% interest in the Partnership or continuing with Fording’s current business model. The announcement of the Arrangement Agreement on July 29, 2008 represents the culmination of a 14-month process that has been conducted at the direction and under the supervision of the Independent Committees, and with the advice of experienced external advisors, pursuant to which 21 parties located around the world were contacted to determine their interest in pursuing a transaction with Fording. From this group, 15 parties entered into confidentiality agreements and undertook a due diligence investigation of Fording and its assets. This process resulted in two indicative expressions of interest, from parties other than Teck, being received in March


		2008 at values significantly lower than the consideration available under the Arrangement. In light of the thoroughness and independence of the process, the Independent Committees believe that the consideration available to Unitholders under the Arrangement represents superior value to Unitholders over any of the other alternatives that were considered.


	•	Due to a combination of a strong demand for steel and a tight supply of seaborne metallurgical coal, exacerbated by flooding in Queensland, Australia, metallurgical coal prices for the 2008 coal year have reached historic highs of approximately US$300 per tonne and are substantially higher than the average price for seaborne metallurgical coal over the preceding 20 years and the prior year coal price of approximately US$93 per tonne. This in turn has contributed to a significant increase in the trading price of the Units. If current pricing for metallurgical coal is not sustained in respect of subsequent coal years, then the increase in revenue and income from operations experienced by Fording in respect of the 2008 coal year, and the resulting level of distributions paid to Unitholders, will not be sustainable particularly in the context of the Partnership’s position as a high cost producer relative to its competitors. The Independent Committees considered forecasts of future coal prices from various sources as well as the advice of its financial advisors regarding such forecasts when evaluating whether maintaining Fording’s current business model would yield superior value to Unitholders compared to the Arrangement. The Independent Committees concluded that maintaining Fording’s current business model would only provide enhanced value to Unitholders in circumstances where either the long-term average price of metallurgical coal is materially higher than the average level the analysts that were surveyed are currently projecting or where current metallurgical coal prices were maintained for a period materially longer than the average period the analysts that were surveyed are currently projecting, even without factoring in Fording’s taxable status commencing in 2011 as a result of the SIFT Rules.

	•	The SIFT Rules and the elimination of the tax efficiencies on distributions commencing in 2011 would reduce the cash flow otherwise available for distribution to Unitholders. In turn, the reduction of the amount of income distributed to Unitholders as a result of Fording’s taxable status could be expected to result in a reduction in the trading price of the Units.

	•	The opinion of RBC to the effect that, as of July 28, 2008, and based upon and subject to the analyses, assumptions, qualifications and limitations set forth therein, the consideration of 0.245 of a Class B Share and cash in the amount of US$82.00 (which includes the Final Unitholder Distribution of US$3.00) per Unit to be received under the Arrangement was fair, from a financial point of view, to the Unitholders (other than Teck and its affiliates).

	•	The determination of National Bank Financial that, as of July 28, 2008, and based upon and subject to the analyses, assumptions, qualifications and limitations set forth in the Independent Valuation, the fair market value of the Units was in the range of $79.00 to $99.00 per Unit.

	•	The consideration to be received by the Unitholders under the Arrangement represented as of July 28, 2008, a premium of approximately 17% based on the weighted average trading price of Units on the TSX for the 20 trading days ended July 28, 2008 (the trading day before the Arrangement was announced).

	•	A significant portion of the consideration payable to Unitholders pursuant to the Arrangement will be paid in cash which provides some certainty of value.

	•	The assets of Fording consist of a non-operating interest in the Partnership and Fording does not have the right to take in kind the coal produced by the Partnership. Through its ownership of Units, Teck owns an approximately 19.6% interest in Fording. In addition, Teck owns a 40% interest in the Partnership, and, through an affiliate, acts as the Managing Partner of the Partnership and is responsible for managing its business and affairs, subject to certain matters that require the approval of all partners. Teck has also been granted a right of first offer over the transfer of Fording’s interest in the Partnership. In light of the foregoing, Fording’s interest in the Partnership is essentially a right to receive income from the sale of coal produced by the Partnership, and the Independent Committees have been advised by RBC that this fact has limited the pool of parties that would be interested in acquiring Fording or its assets as a number of parties that were contacted expressed a desire to acquire operating rights or direct access to the Partnership’s coal resources.


	•	The Independent Committees believe that the 0.245 of a Class B Share forming part of the per Unit consideration available to Unitholders under the Arrangement provides Unitholders with continued participation in the metallurgical coal market as well as other resources.

	•	The Class B Shares are listed on the TSX and the NYSE. Teck has a larger market capitalization than Fording and trading liquidity comparable to that of Fording. Further, upon completion of the Arrangement, Teck’s market capitalization will be larger and its liquidity enhanced.

	•	There are no material competition or other regulatory issues which are expected to arise in connection with the Arrangement so as to prevent its completion, and all required regulatory clearances and approvals are expected to be obtained.

The Independent Committees believe that the Arrangement is procedurally fair to the Unitholders for the following reasons:


	•	The Arrangement Resolution must be approved by a simple majority of the votes cast by Unitholders (excluding the votes cast by Teck and certain other parties related to or affiliated with Teck that must be excluded in accordance with applicable securities laws) present in person or represented by proxy at the Meeting, as well as by a special majority of Securityholders and also by a special majority of Unitholders, in each case, present in person or represented by proxy at the Meeting.

	•	Completion of the Arrangement will be subject to a judicial determination as to its fairness by the Court.

	•	The Independent Committees retained independent financial and legal advisors who advised the Independent Committees throughout the 14-month process noted above.

	•	The Independent Committees conducted arm’s-length negotiations with Teck over the key economic terms of the Arrangement Agreement and oversaw the negotiation of other material terms of the Arrangement Agreement and the Arrangement. After negotiations with Teck, in which the Independent Committees obtained improved financial terms, the Independent Committees concluded that the consideration offered in the Arrangement was the highest price that Fording could obtain from Teck and that, based on Teck’s unequivocal statements that the consideration offered under the Arrangement was Teck’s best and final offer, further negotiation could have caused Teck to withdraw its proposal, thereby leaving Unitholders without an opportunity to evaluate and vote on a transaction that provides a premium to the current trading price for the Units.

	•	If the Arrangement does not receive the Requisite Level of Approval or the financing condition in favour of Teck or the condition relating to Teck demonstrating to Fording that Teck has or will be able to draw sufficient funds (other than the funds resulting from the sale of its Units) to complete the Arrangement is not satisfied or waived, Teck has agreed to reimburse Fording for the expenditures incurred by Fording in connection with the Arrangement to a maximum of $10 million. Further, in the event that the Arrangement Agreement is terminated as a result of the failure of the financing condition to be satisfied or waived, Fording is not required to pay the US$400 million Break Fee to Teck.

	•	Registered Unitholders who do not vote in favour of the Arrangement will have the right to require a judicial appraisal of their Units and obtain “fair value” pursuant to the exercise of the Dissent Rights under the Arrangement.

	•	Under the Arrangement Agreement, the Trustees are able to respond, in accordance with their fiduciary duties, to unsolicited Acquisition Proposals that are or could reasonably be expected to lead to a Superior Proposal. The terms of the Arrangement Agreement, including the US$400 million Break Fee payable to Teck in certain circumstances, are reasonable and not, in the opinion of the Independent Committees, preclusive of other proposals.

	•	Teck has agreed that, if there is a Superior Proposal that would otherwise be subject to Teck’s right of first offer and Teck does not exercise its matching rights under the Arrangement Agreement, it shall, upon payment of the US$400 million Break Fee, waive the 60 day right of first offer that it currently has over the transfer of Fording’s indirect interest in the Partnership and which could otherwise significantly impede certain types of alternative transactions.

The Independent Committees also considered a number of risks and potential negative factors relating to the Arrangement including the following:


	•	The Arrangement is conditional on the Debt Financing contemplated by the Debt Commitment Letter being available to Teck as of the Transaction Confirmation Date. Such availability is subject to a number of conditions. There can be no assurance that Teck will be able to obtain the Debt Financing contemplated by the Debt Commitment Letter or, in the event that Teck is unable to obtain the Debt Financing contemplated by the Debt Commitment Letter, that it will be able to obtain alternative debt financing commitments. The Independent Committees considered the advice of RBC as to the current state of the financial markets and the advice of Osler as to the terms of the Debt Commitment Letter. The Independent Committees also considered the magnitude of Teck’s obligations in obtaining the financing contemplated by the Debt Commitment Letter, the adverse affect that the failure to satisfy the conditions and obtain the financing would have on Teck, and that Teck must reimburse Fording for its Transaction Expenses, to a maximum of $10 million, if the conditions to the Arrangement are not met due to Teck’s failure to obtain the financing.

	•	If the Arrangement is successfully completed, Fording will no longer exist as an independent public income trust and, although Unitholders, through the Class B Shares to be issued under the Arrangement, will have the opportunity to continue to participate in the metallurgical coal markets, the consummation of the Arrangement will diminish the opportunity for Unitholders (other than Teck and its affiliates) to participate in the longer term potential benefits of the business of Fording to the extent that those benefits exceed those potential benefits reflected in the consideration to be received under the Arrangement.

	•	Teck was prepared to offer the consideration available under the Arrangement only if the Arrangement was structured as an asset sale by Fording to Teck. The Independent Committees believe that the net tax efficiency of the structure to Teck has enabled Teck to make an enhanced offer to Unitholders under the Arrangement. This structure results in the distribution of taxable income to Unitholders generally equal to the payments to be made to Unitholders under the Arrangement. This distribution of income may result in a higher level of taxation than would have been the case had Teck offered to purchase the Units from Unitholders who are Canadian residents (for tax purposes) and who hold Units as capital property and from Non-Resident Unitholders. However, no such offer was available. The Independent Committees considered available information as to the composition of the Unitholders and the advice of RBC as to the likely liquidity and operation of the public markets prior to and during the Pre-Closing Period.

	•	If Fording is required to pay the US$400 million Break Fee to Teck and an alternative transaction is not concluded, Fording’s financial condition will be materially and adversely affected.

	•	If the Arrangement Agreement is terminated and the Trustees decide to seek another merger or business combination, there is no assurance that Fording will be able to find a party willing to pay greater or equivalent value compared to the consideration available to Unitholders under the Arrangement, or that the continued operation of Fording under its current business model will yield equivalent or greater value to Unitholders compared to that available under the Arrangement.

	•	The trading price of the Class B Shares may fluctuate. The Independent Committees received advice from RBC as to the likely impact of the issuance of the Class B Shares in connection with the Arrangement on the market price for such shares, and the possible effect on earnings per share, cash flow and credit characteristics of Teck as a result of its acquisition of Fording. The Independent Committees also received advice from RBC and Osler as to the scope and results of the focused confirmatory diligence investigation of Teck that was undertaken by the advisors. The Independent Committees considered the advice that was received from the advisors in that regard and further considered the characteristics of the Class B Shares.

	•	Teck’s obligations under the Arrangement are subject to certain conditions and Teck has the right to terminate the Arrangement Agreement in certain circumstances.

See “Special Factors — Position of the Independent Committees as to Fairness” in this Circular.

Recommendation of the Trustees and the Directors

After careful consideration by the Trustees (with the interested Trustee, being Warren Seyffert, declaring his interest and excusing himself from the determination to make such recommendation) and the Directors (with the interested Directors, being Donald Lindsay and David Thompson, declaring their interests and excusing themselves from the determination to make such recommendation), the Trustees and the Directors have unanimously concluded that the Arrangement is fair to the Unitholders (other than Teck and its affiliates) and in the best interests of Fording and have authorized the submission of the Arrangement to the Securityholders for their approval at the Meeting. The Trustees and the Directors also have determined unanimously (with the interested Trustees and Directors excusing themselves from the determination to make such recommendation) to recommend to the Unitholders that they vote FOR the Arrangement Resolution. Each Trustee and Director intends to vote his or her Units and Phantom Units FOR the Arrangement Resolution.

In adopting the respective Independent Committees’ recommendations and concluding that the Arrangement is substantively and procedurally fair to the Unitholders (other than Teck and its affiliates) and that the Arrangement is in the best interests of Fording, the Trustees and the Directors considered and relied upon the same factors and considerations that the Independent Committees relied upon, as described above, and adopted the Independent Committees’ analyses in its entirety. The Trustees and the Directors also considered the fact that certain of the Trustees, Directors and executive officers of Fording and Fording ULC may have interests that differ from those of the Unitholders. See “The Arrangement — Interests of Trustees, Directors, Executive Officers and Others in the Arrangement” in this Circular.

For a description of the factors considered by the Trustees and the Directors in reaching their conclusions, see “Special Factors — Recommendation of the Independent Committees”, “Special Factors — Recommendation of the Trustees and the Directors” and “Special Factors — Reasons for the Arrangement from Fording’s and Fording ULC’s Perspectives” in this Circular.

Reasons for the Arrangement from Fording’s and Fording ULC’s Perspectives

Fording and Fording ULC took the step of forming the Independent Committees in response to an expression of interest received in June 2007 from Teck to acquire from Fording its indirect 60% interest in the Partnership. The Independent Committees were given a broad mandate to consider a wide range of alternatives, including an acquisition of all of Fording’s Units by a third party, a sale of Fording’s assets, including its interest in the Partnership, a combination, reorganization or similar form of transaction, an acquisition of Teck’s 40% interest in the Partnership or continuing with Fording’s current business model. In considering the range of options available to Fording, the Independent Committees were mindful of a number of considerations, including the outlook for the price of metallurgical coal, the developments involving Canadian taxation that would reduce the cash flow otherwise available for distributions to Unitholders and likely implications for the trading price of the Units in such circumstances, and the fact that Fording’s assets consist of essentially a non-operating interest in the Partnership without any right to take in kind the coal produced by the Partnership.

The announcement of the Arrangement Agreement on July 29, 2008 represents the culmination of a 14-month process. See “Special Factors — Background to Arrangement” in this Circular.

In determining to recommend the Arrangement to Unitholders and in concluding that the Arrangement is fair to the Unitholders (other than Teck and its affiliates) and in the best interests of Fording, the Trustees and the Directors considered, among other things, the recommendations of the Independent Committees in respect of the fairness of the Arrangement to Unitholders (other than Teck and its affiliates), the Fairness Opinion of RBC and the Independent Valuation of National Bank Financial. The Trustees and the Directors also considered the fact that certain of the Trustees, Directors and executive officers of Fording and Fording ULC may have interests that differ from those of the Unitholders. See “The Arrangement — Interests of Trustees, Directors, Executive Officers and Others in the Arrangement” in this Circular.

Reasons for the Arrangement from the Perspective of Teck; Position of Teck Regarding Fairness of the Arrangement

Under SEC rules, Teck is deemed to be engaged in a “going private” transaction and may be required to express its reasons for entering into the Arrangement and may be required to provide certain information regarding its position as to

the substantive and procedural fairness of the Arrangement to unaffiliated Unitholders. To comply with such SEC rules, Teck makes certain statements in this Circular as to, among other matters, its reasons for the Arrangement and its belief as to the fairness of the Arrangement to unaffiliated Unitholders. Teck does not believe that it has or has had any fiduciary duty to Fording or its Unitholders, including with respect to the Arrangement.

See “Special Factors — Reasons for the Arrangement from the Perspective of Teck” and “Special Factors — Position of Teck Regarding Fairness of the Arrangement”.

Fairness Opinion

The Independent Committees engaged RBC to provide a Fairness Opinion in connection with the Arrangement. Based upon and subject to the analyses, assumptions, qualifications and limitations set forth in the Fairness Opinion (the full text of which is attached as Appendix C to this Circular), RBC was of the opinion that, as of July 28, 2008, the consideration of 0.245 of a Class B Share and cash in the amount of US$82.00 (which includes the Final Unitholder Distribution of US$3.00) per Unit to be received under the Arrangement was fair, from a financial point of view, to the Unitholders (other than Teck and its affiliates). The Fairness Opinion is not a recommendation as to how the Unitholders should vote at the Meeting. The summary of the Fairness Opinion in this Circular is qualified in its entirety by the full text of the Fairness Opinion. Unitholders are urged to read the Fairness Opinion in its entirety.

See “Special Factors-Fairness Opinion” in this Circular.

Independent Valuation

The Independent Committee of Fording engaged National Bank Financial to prepare the Independent Valuation in connection with the Arrangement in accordance with MI 61-101. Based upon and subject to the analyses, assumptions, qualifications and limitations set forth in the Independent Valuation (the full text of which is attached as Appendix D to this Circular), National Bank Financial was of the opinion that, as of July 28, 2008, the fair market value of the Units was in the range of $79.00 to $99.00 per Unit. The Independent Valuation is not a recommendation as to how the Unitholders should vote at the Meeting. The summary of the Independent Valuation in this Circular is qualified in its entirety by the full text of the Independent Valuation. Unitholders are urged to read the Independent Valuation in its entirety.

See “Special Factors — Independent Valuation” in this Circular.

Interests of Trustees, Directors, Executive Officers and Others in the Arrangement

In considering the recommendations of the Independent Committees, the Trustees and the Directors with respect to the Arrangement, Unitholders should be aware that certain of the Trustees, Directors and executive officers of Fording may have interests that differ from those of Unitholders. The Independent Committees, the Trustees and the Directors are aware of these interests and considered them along with other matters described under “The Arrangement — Interests of Trustees, Directors, Executive Officers and Others in the Arrangement” in this Circular, and including the following:


	•	Warren S. R. Seyffert is a Trustee of Fording and Donald R. Lindsay is a Director of Fording ULC. Such individuals are also directors and, in the case of Mr. Lindsay, also President and Chief Executive Officer of Teck. In addition, David A. Thompson is a current Director who formerly served as a director, Chief Executive Officer and Deputy Chairman of Teck. See “Interest of Informed Persons in Material Arrangements” in this Circular.

	•	The Trustees and Directors, including Mr. Grandin who serves as the Chief Executive Officer of Fording and Fording ULC, participate in the Joint Phantom Unit Plan with Fording. On the Effective Date, in conjunction with the Arrangement, all of the issued and outstanding Phantom Units will be deemed to have vested and each holder of Phantom Units will be deemed to have elected to redeem all Phantom Units credited to such holder’s Phantom Unit account for an amount per Phantom Unit equal to the Unit Consideration and will be paid such consideration (less any amounts withheld on account of taxes) as a result of the deemed redemption plus the Final Unitholder Distribution. See “The Arrangement — Interests of Trustees, Directors, Executive Officers and Others in the Arrangement” in this Circular.

Certain Effects of the Arrangement

Under the Arrangement, Unitholders and holders of Phantom Units will receive 0.245 of a Class B Share and cash in the amount of US$82.00 (which includes the Final Unitholder Distribution of US$3.00) (less any amounts withheld on account of taxes) per Unit or Phantom Unit. Holders of Exchange Options who do not exercise their Exchange Options will receive cash equal to the difference between the Unit Consideration plus the amount of the Final Unitholder Distribution over the Exercise Price of the Exchange Option (less any amounts withheld on account of taxes).

See “Special Factors-Certain Effects of the Arrangement” in this Circular.

Distribution Policy

If the Arrangement is completed, no further quarterly or other distributions with respect to the Units will be declared or paid to the Unitholders. See “Information Concerning Fording — Distribution Policy” in this Circular.

Sources of Funds for the Arrangement

Teck will be required to pay approximately US$12.4 billion in cash to fund its obligations under the Arrangement and the other transactions contemplated by the Arrangement Agreement, and will be required to issue approximately 36.8 million Class B Shares. Teck has also agreed, if necessary, to pay to Fording sufficient cash to enable Fording, when such additional cash is combined with its otherwise available cash, to make the Final Unitholder Distribution of US$3.00 per Unit. Teck expects to finance the Cash Consideration with borrowings under the Facilities and the sale prior to the Effective Date of its approximate 19.6% interest in Fording. See “The Arrangement — Sources of Funds for the Arrangement” in this Circular.

Teck has received the Debt Commitment Letter from the Lenders pursuant to which the Lenders have committed to provide to Teck an aggregate US$4 billion senior term loan facility and a US$5.81 billion senior bridge loan facility. Confirmation of the availability of the financing to be made available under the Debt Commitment Letter is a condition to the closing of the Arrangement (which must be satisfied or waived on or before the Transaction Confirmation Date). The obligation of the Lenders to provide the Debt Financing on the terms outlined in the Debt Commitment Letter is subject to a number of material conditions. Teck has represented to Fording that the funds contemplated to be received under the Facilities, together with the expected proceeds from the sale of Teck’s approximately 19.6% ownership interest in Fording and Teck’s cash on hand, will be sufficient to pay the aggregate Cash Consideration payable under the Arrangement and to make all other necessary payments to be made by it in connection with the Arrangement. See “The Arrangement-Sources of Funds for the Arrangement” in this Circular.

The Arrangement Agreement

A copy of the Arrangement Agreement is attached in its entirety as Appendix B to this Circular. You should read the Arrangement Agreement in its entirety because it contains important provisions governing the terms and conditions of the Arrangement and the rights and obligations of Fording and Teck are governed by the express terms of the Arrangement Agreement and not by the information contained in this Circular. See “The Arrangement Agreement” in this Circular.

Mutual Conditions to the Arrangement

The implementation of the Arrangement is subject to the satisfaction of a number of conditions, some of which may only be waived by both of Fording and Teck, including:


	•	the Interim Order and the Final Order each having been granted;

	•	the approval of the Arrangement Resolution having been obtained;

	•	the TSX and the NYSE having approved the listing of the Class B Shares to be issued under the Arrangement;

	•	the Arrangement Agreement not having been terminated;

	•	the Closing Regulatory Approvals having been obtained; and

	•	the absence of any Law that makes the consummation of the Arrangement illegal or otherwise prohibits or enjoins either Fording or Teck from consummating the Arrangement.

See “The Arrangement Agreement — Conditions to the Arrangement” in this Circular.

Fording Conditions

The implementation of the Arrangement is subject to the satisfaction of a number of conditions, some of which may only be waived by Fording, including:


	•	the representations and warranties of Teck being true and correct in all material respects;

	•	the compliance by Teck in all material respects with its covenants;

	•	the absence of a Teck Material Adverse Effect; and

	•	on or before October 31, 2008, the provision of written evidence by Teck that it has or will be able to draw on or prior to the Effective Date the funds (other than the funds resulting from the sale of its Units) necessary to complete the Arrangement, including the execution of definitive credit agreements in respect of its planned Debt Financing.

Teck Conditions

The implementation of the Arrangement is subject to the satisfaction of a number of conditions, some of which may only be waived by Teck, including:


	•	the representations and warranties of Fording being true and correct in all material respects;

	•	the compliance by Fording in all material respects with its covenants;

	•	the absence of a Fording Material Adverse Effect;

	•	confirmation from the Lenders that the conditions precedent to the availability of Teck’s planned Debt Financing, subject to certain limited exceptions, have been satisfied or waived;

	•	the Trustees not having made a Change in Recommendation;

	•	Dissent Rights having been exercised in respect of no more than 5% of the Units (on a fully-diluted basis); and

	•	determination by Teck that the total amount of the Residual Liabilities existing after the completion of the Arrangement, net of current assets of Fording and excluding: (a) the FX Hedge, and (b) Residual Liabilities that were not incurred in wilful violation of the Arrangement Agreement, will not exceed $475 million (if the Fording Credit Agreement will not be repaid) or $200 million (if the Fording Credit Agreement will be repaid without Fording incurring liabilities to make such repayment).

Covenants of Fording

Fording has agreed to certain covenants under the Arrangement Agreement, including customary negative and affirmative covenants relating to the operation of its business, providing reasonable and timely cooperation in connection with the arrangement of the Debt Financing, complying with certain non-solicitation obligations, not declaring, setting aside or paying any dividends or other distributions (other than the Final Unitholder Distribution of US$3.00 and other distributions contemplated by the Plan of Arrangement), suspending the distribution of Units under the Fording DRIP, cooperating with Teck and taking all commercially reasonable efforts to permit all amounts outstanding under the Fording Credit Agreement to be repaid at the Effective Time, taking all steps and doing all acts and things as are specified in the Interim Order, the Plan of Arrangement and the Final Order to be taken or done by it and the Fording Subsidiaries and using commercially reasonable efforts to satisfy the conditions precedent to its and Teck’s obligations under the Arrangement Agreement. See “The Arrangement Agreement — Fording Covenants” in this Circular.

Covenants of Teck

Teck has agreed to certain covenants under the Arrangement Agreement, including taking all commercially reasonable efforts to ensure sufficient funds in excess of those expected to be made available as part of its Debt Financing are available to finance the Arrangement, causing the Managing Partner to manage the Partnership in the ordinary course, using best efforts to satisfy, on a timely basis and in all material respects, all covenants, terms,

representations and warranties and conditions in the Debt Commitment Letter that are within its control, waiving of its right of first offer with respect to certain Acquisition Proposals in certain circumstances, and treating the Fording officers in an agreed upon manner following the Effective Time. See “The Arrangement Agreement — Teck Covenants” in this Circular.

Termination of the Arrangement Agreement

Fording and Teck each have certain rights to terminate the Arrangement Agreement. The Arrangement Agreement may be terminated by mutual written consent. In addition, either Fording or Teck (and in certain circumstances, only one of them) may terminate the Arrangement Agreement if certain specified events occur. The material termination rights that effectively extend during the period from the Transaction Confirmation Date until the Effective Date are those described in the first bullet and the last four bullets listed under the heading “The Arrangement Agreement — Termination”.

See “The Arrangement Agreement — Termination” in this Circular.

Break Fee

The Arrangement Agreement provides that Fording will pay to Teck a Break Fee of US$400 million if the Arrangement Agreement is terminated in certain circumstances, including by Fording entering into an agreement with respect to a Superior Proposal or by Teck if the Trustees make a Change in Recommendation.

See “The Arrangement Agreement — Break Fee” in this Circular.

Expense Reimbursement

If the Arrangement does not receive the Requisite Level of Approval or the financing condition in favour of Teck or the condition relating to Teck demonstrating to Fording that Teck has or will be able to draw sufficient funds (other than the funds resulting from the sale of its Units) to complete the Arrangement is not satisfied or waived, Teck has agreed to reimburse Fording within three business days following receipt by Teck of evidence satisfactory to it, acting reasonably, for the expenditures incurred by Fording in connection with the Arrangement to a maximum of CDN$10 million. Further, Teck has agreed to pay all of Fording’s transaction expenses upon the closing of the Arrangement.

The Arrangement Mechanics

Exchange of Unit Certificates and Treatment of Fractional Units

A Letter of Transmittal is enclosed with this Circular for use by the Registered Unitholders for the purpose of the surrender of Unit certificates if the Registered Unitholders choose not to dispose of their Units on the TSX or the NYSE. The details for the surrender of Unit certificates to the Depositary and the addresses of the Depositary are set out in the Letter of Transmittal. The Letter of Transmittal contains procedural information relating to the Arrangement and should be reviewed carefully. Provided that a Registered Unitholder has delivered and surrendered to the Depositary all Unit certificates, together with a Letter of Transmittal properly completed and executed in accordance with the instructions of such Letter of Transmittal, and any additional documents as Teck or the Depositary may reasonably require, the Registered Unitholder will be entitled to receive, and Teck will cause the Depositary to deliver, a cheque (or other form of immediately available funds) representing the cash component of the consideration to which the Registered Unitholder is entitled and a certificate representing the number of Class B Shares to which the Registered Unitholder is entitled, in each case less applicable withholding taxes. The Unit certificates which immediately prior to the Effective Time represented Units will be cancelled. As of the Effective Date, the Unit certificates will only represent the right of the Registered Unitholder to receive upon surrender the consideration payable to such holder under the Arrangement. You can request additional copies of the Letter of Transmittal by contacting the Depositary. The Letter of Transmittal is also available at the website maintained by the Canadian Securities Administrators at www.sedar.com. See “The Arrangement — Arrangement Mechanics — Letter of Transmittal” in this Circular.

No fractional Class B Shares will be issued to Unitholders. The fractional interest in a Class B Share, which would otherwise be distributed to a Registered Unitholder, will be sold in the market and each such Unitholder will receive a cash payment in Canadian dollars equal to its pro rata portion of the net proceeds after expenses of all such sales, less any amounts withheld on account of taxes. See “The Arrangement — Arrangement Mechanics — Fractional Shares” in this Circular.

Payment of the Consideration

If you hold your Units through an Intermediary, then you are not required to take any action and the consideration will be delivered to your Intermediary through the procedures in place for such purposes between CDS or similar entities and such Intermediaries. If you hold your Units through an Intermediary, you should contact your Intermediary if you have questions regarding this process. In the case of Registered Unitholders, as soon as practicable after the Effective Date, assuming due delivery of the required documentation, including the applicable Unit certificates and a duly and properly completed Letter of Transmittal, Teck will cause the Depositary to forward a cheque (or other form of immediately available funds) and a certificate representing the Class B Shares to which the Registered Unitholder is entitled, in each case less applicable withholding taxes, by first class mail to the address of the Unitholder as shown on the register maintained by Computershare Investor Services Inc., unless the Unitholder indicates in the Letter of Transmittal that it wishes to pick up the cheque and the certificate representing the Class B Shares. It is anticipated that the consideration under the Arrangement will be available from the Depositary as soon as practicable, but in any event, no later than three business days following the Effective Date. Under no circumstance will interest on the consideration be paid by Teck, Fording or the Depositary by reason of any delay in paying the consideration or otherwise.

Dissenting Registered Unitholders’ Rights

The Plan of Arrangement and the Interim Order provide Registered Unitholders with Dissent Rights in connection with the Arrangement that will be available in the event that the Arrangement Resolution is approved by the Securityholders. The Dissent Rights available under the Arrangement are different than and in lieu of the dissent rights set out in the Declaration of Trust. The Dissent Rights are in many respects similar to the dissent and appraisal rights provided by Section 191 of the ABCA, however such rights are not identical. Registered Unitholders who are considering exercising their Dissent Rights should carefully review the description of such rights set forth in this Circular, as well as the Plan of Arrangement and the Interim Order. Any Registered Unitholder who properly dissents from the Arrangement Resolution in compliance with Section 191 of the ABCA, as modified by the Plan of Arrangement and the Interim Order, will, in the event the Arrangement becomes effective, be deemed to have received and been paid the various distributions contemplated by the Plan of Arrangement, will be deemed to have transferred his, her or its Units to Fording for cancellation and will only be entitled to be paid the fair value of their Units, and will not be entitled to any other payment or consideration, including the Final Unitholder Distribution and any other payments that would be payable under the Arrangement had such Registered Unitholder not exercised his, her or its Dissent Rights. These amounts will instead be paid to the Dissenter Trustee, and will be used to pay the fair value of the Dissenting Unitholder’s Units. The fair value may be the same as, more than or less than the value of the consideration offered under the Arrangement.

Unitholders who duly exercise their Dissent Rights will, for Canadian income tax purposes, be deemed to have participated in the Arrangement on the same basis as a non-Dissenting Unitholder, which could result in a requirement for the Dissenting Unitholder to pay tax in respect of amounts deemed to be distributed and paid to the Dissenting Unitholder under the Arrangement, even if the fair value is less than the value of the consideration payable under the Arrangement or if the Dissenting Unitholder does not ultimately receive fair value for its Units until substantially following the completion of the Arrangement.

Despite subsection 191(5) of the ABCA, a Registered Unitholder who wishes to exercise Dissent Rights must provide to Fording (c/o Osler, Hoskin & Harcourt LLP at Suite 2500, TransCanada Tower, 450-1st Street, S.W., Calgary, Alberta, T2P 5H1, Attention: Tristram Mallett), prior to 5:00 p.m. (Calgary time) on Friday, September 26, 2008, or otherwise at least two business days prior to the date of the Meeting (or any postponement(s) or adjournment(s) of the Meeting), a written objection to the Arrangement Resolution. It is important that Registered Unitholders strictly comply with this requirement, which is different from the statutory dissent provisions provided by Section 191 of the ABCA and the dissent provisions under the Declaration of Trust. A Registered Unitholder who wishes to exercise his, her or its Dissent Rights must not vote his, her or its Units at the Meeting, either by proxy or in person, in favour of the Arrangement Resolution. A vote against the Arrangement Resolution or an abstention does not constitute a written objection for purposes of the exercise of Dissent Rights.

Only Registered Unitholders may exercise Dissent Rights. A Registered Unitholder’s failure to follow exactly the procedures set forth in the terms of the Plan of Arrangement and the Interim Order will result in the loss of Dissent Rights. Due exercise of the Dissent Rights requires that certain deadlines be observed and Fording and Teck intend to enforce such deadlines strictly. Registered Unitholders considering exercising Dissent Rights should

seek the advice of their own legal counsel and tax and investment advisors and should carefully review the description of such rights set forth in this Circular, as well as the Plan of Arrangement and the Interim Order, and comply with the provisions of Section 191 of the ABCA the full text of which is set out on Appendix H to this Circular as modified by the Plan of Arrangement and the Interim Order. See “Dissenting Registered Unitholders’ Rights” in this Circular.

Court and Regulatory Approvals

Court Approval of the Arrangement and Completion of the Arrangement

The Arrangement requires Court approval under the ABCA. On [August 26], 2008, prior to the mailing of this Circular, Fording obtained the Interim Order, which provides for the calling and holding of the Meeting, the Dissent Rights and other procedural matters. A copy of the Interim Order is set forth in Appendix F to this Circular.

See “Principal Legal Matters — Court Approval of the Arrangement and Completion of the Arrangement” in this Circular.

HSR Act

Under the HSR Act, the Transaction may not be completed until the required HSR notifications have been filed with the DOJ and the FTC, and the required waiting period has expired or been terminated. Teck and Fording, respectively, filed their Notification and Report Forms under the HSR Act with the DOJ and the FTC on August 15, 2008 and August 18, 2008 and requested early termination of the waiting period. Completion of the Transaction is conditional upon HSR Approval.

See “Principal Legal Matters — Principal Regulatory Matters” in this Circular.

Competition Act

The Arrangement is a Notifiable Transaction under the Competition Act, and as such, Fording and Teck must comply with the pre-merger notification provisions of the statute. To do so, on August 12, 2008, Teck requested the issuance of an ARC and a waiver of the obligation to submit a pre-merger notification.

Completion of the Transaction is, among other things, subject to the condition that (a) the Commissioner shall have issued an ARC under Section 102 of the Competition Act in connection with the Transaction or (b) the applicable waiting period under the Competition Act shall have expired or shall have been terminated or the obligation to make a pre-closing merger filing shall have been waived by the Commissioner and the Commissioner shall have advised Teck in writing that she is of the view that grounds do not exist to file an application pursuant to the merger provisions of the Competition Act in connection with the Transaction.

See “Principal Legal Matters — Principal Regulatory Matters” in this Circular.

European Commission

The Transaction is subject to pre-merger notification under the EC Merger Regulation. On August 14, 2008, Fording and Teck filed a Form CO with the EC in respect of the Transaction pursuant to the EC Merger Regulation. Completion of the Transaction is conditional upon the Transaction being cleared (or deemed cleared) by the EC.

See “Principal Legal Matters — Principal Regulatory Matters” in this Circular.

Canada Transportation Act

The Transaction is subject to pre-merger notification under the CTA. On August 12, 2008, the parties filed a notice with the Minister in respect of the Transaction pursuant to the Canada Transportation Act. Completion of the Transaction is conditional upon the Transaction being cleared by the Minister giving notice of his opinion that the Transaction does not raise issues with respect to the public interest or the Governor in Council approving the Transaction.

Korea Fair Trade Commission and Turkish Competition Board

The Transaction is subject to pre-merger notification filings under applicable competition laws in Korea and Turkey. The parties intend to make a pre-merger filing with each of the KFTC and the Turkish Competition Board during the week of August 18, 2008. Completion of the Transaction is conditional upon approvals being issued in respect of these pre-merger filings.

See “Principal Legal Matters — Principal Regulatory Matters” in this Circular.

Certain Canadian Federal Income Tax Considerations

For a summary of certain material Canadian federal income tax consequences of the Arrangement, see “Certain Tax Considerations for Unitholders — Certain Canadian Federal Income Tax Considerations”. Such disclosure is not intended to be legal or tax advice to any particular Unitholder. Unitholders should consult their own tax and investment advisors with respect to their circumstances.

Unitholders should be aware of the Canadian income tax consequences of the Arrangement summarized under “Certain Tax Considerations for Unitholders-Certain Canadian Federal Income Tax Considerations”, including the treatment of amounts payable to Unitholders under the Arrangement. In particular, for Canadian federal income tax purposes, Fording expects that all or substantially all of the distributions and other amounts payable to Unitholders under the Arrangement, including all cash amounts and the fair market value of any Class B Shares received by Unitholders, will constitute ordinary income to Unitholders. This income inclusion cannot be offset by capital losses, if any, recognized as a result of the Arrangement. Taxable Unitholders who are resident in Canada and who hold their Units on capital account and Unitholders who are not residents of Canada will want to consider disposing of their Units on the TSX or the NYSE with a settlement date that is prior to the Effective Date of the Arrangement and should consult their own tax and investment advisors with regard to this decision.

Certain United States Federal Income Tax Considerations

The disposition of a Unit pursuant to the Arrangement will be a taxable transaction for U.S. federal income tax purposes. A U.S. Holder (as defined under “Certain Tax Considerations for Unitholders-Certain United States Federal Income Tax Considerations”) may be subject to substantial restrictions on its ability to obtain a foreign tax credit in respect of Canadian taxes withheld in connection with the Arrangement and, a U.S. Holder may be unable to obtain a full credit with respect to such taxes for U.S. federal income tax purposes. For a summary of certain material U.S. income tax consequences of the Arrangement, see “Certain Tax Considerations for Unitholders-Certain United States Federal Income Tax Considerations” in this Circular. Such disclosure is not intended to be legal or tax advice to any particular Unitholder. Unitholders should consult their own tax advisors with respect to the U.S. federal income tax consequences of the Arrangement to them, having regard to their particular circumstances.

Risk Factors Relating to the Arrangement

There are risks associated with the completion of the Arrangement, including the following:


	•	There can be no certainty that all conditions precedent to the Arrangement will be satisfied or waived, or as to the timing of their satisfaction or waiver. Failure to complete the Arrangement could negatively impact the price of the Units.


	•	The Arrangement is conditional on the Debt Financing contemplated by the Debt Commitment Letter being available to Teck as of the Transaction Confirmation Date. Such availability is subject to a number of material conditions. There can be no assurance that Teck will be able to obtain the Debt Financing contemplated by the Debt Commitment Letter, or in the event that Teck is unable to obtain the Debt Financing contemplated by the Debt Commitment Letter, it will be able to obtain alternative debt financing commitments in replacement thereof.

	•	The Arrangement Agreement may be terminated by Fording or Teck in certain circumstances, including after the Transaction Confirmation Date.

	•	A liquid market for the Units may not exist during the Pre-Closing Period.

	•	If the Arrangement is not completed, the application of the SIFT Rules may have a material and adverse impact on Fording.

	•	The value of the cash portion of the consideration payable under the Arrangement will fluctuate depending on exchange rate fluctuations for Unitholders whose primary currency is not the US dollar. In addition, under the Arrangement, Unitholders will receive Class B Shares based on a fixed exchange ratio that will not be adjusted to reflect market fluctuations. Consequently, the Class B Shares issuable under the Arrangement may have a market value lower than expected.

	•	As a result of the issuance of Class B Shares in connection with the Arrangement and the dual class share structure of Teck, the Unitholders’ voting interests in Teck will be significantly diluted, relative to their current proportional voting interest in Fording.

See “Cautionary Statement Regarding Forward-Looking Statements”, “Risk Factors Relating to the Arrangement”, “Information Concerning Fording-Risk Factors Relating to Fording” and “Information Concerning Teck-Risk Factors Relating to Teck” in this Circular.

In addition, investment in a natural resource issuer involves a significant degree of risk. Fording and Teck are subject to a number of risks in the operation of their businesses. Securityholders should carefully review the risk factors set forth under the heading “Information Concerning Fording — Risk Factors Relating to Fording” and “Information Concerning Teck — Risk Factors Relating to Teck” in this Circular, “Risk Factors” in Fording’s Annual Information Form dated March 17, 2008, “Key Risks and Uncertainties” in Fording’s Management’s Discussion and Analysis for Fording as at and for the year ended December 31, 2007 and “Description of the Business-Risk Factors” in Teck’s Annual Information Form dated March 19, 2008, which describe the material risks faced by Fording and Teck.

SPECIAL FACTORS

Background to the Arrangement

The provisions of the Arrangement Agreement are the result of negotiations conducted between representatives of Fording, the Independent Committees, Teck and their respective advisors. The following is a summary of the principal events leading up to the negotiation of the Arrangement Agreement and the meetings, negotiations, discussions and actions between the parties that preceded the public announcement of the Arrangement and execution of the Arrangement Agreement.

On June 8, 2007, Mr. Donald Lindsay, President and Chief Executive Officer of Teck, contacted Mr. Michael Grandin, Chairman of Fording and Fording ULC, and advised that Teck would be interested in discussing with Fording a possible transaction whereby Teck would acquire from Fording its indirect 60% interest in the Partnership. On June 9, 2007, Mr. Grandin contacted the independent Trustees and Directors to advise them of the substance of his discussions with Mr. Lindsay. As a result of his discussions with Mr. Lindsay and his subsequent discussions with the independent Trustees and Directors, Mr. Grandin determined that it was advisable to constitute an independent committee of each of Fording and Fording ULC and to engage external advisors to work with those committees. Following his call with Mr. Lindsay and his determination to establish the Independent Committees, Mr. Grandin spoke to Messrs. Mahler, Parrett, Pether, Valentine and Zaozirny, being those Trustees that were independent of Teck, as well as to Ms. Farrell and Messrs. Mahler, Parrett, O’Neil and Prillaman, being those Directors that were independent of Teck, to update them on his discussions and intentions and to schedule a meeting of the independent Trustees and independent Directors for June 12, 2007. Mr. Grandin then confirmed Osler’s mandate as counsel to the Independent Committees and retained RBC to provide financial advice to the Independent Committees. Mr. Grandin felt it desirable to establish committees of the Trustees and the Directors that were independent from Teck in order to evaluate any proposal that might be received from Teck as well as to examine alternative courses of action.

On June 12, 2007, all of the Trustees, other than Warren S.R. Seyffert (Mr. Seyffert being an appointee of Teck), and all of the Directors, other than Donald Lindsay and David Thompson (Mr. Lindsay being an appointee of Teck and Mr. Thompson being a former director and officer of Teck), met and constituted themselves, in the case of the Trustees, as an Independent Committee of the Trustees of Fording and in the case of the Directors as an Independent Committee of the Directors of Fording ULC, in each case with a mandate to review any proposal that might be received from Teck as well as to examine other strategic options that might be available to Fording and/or to Fording ULC. At that initial meeting, the Independent Committees received advice from Osler regarding the duties of the Trustees and Directors in relation to any proposal that might be received from Teck. RBC advised the Independent Committees that because Teck was already a significant Unitholder of Fording and its affiliate was the managing partner of the Partnership, it was well positioned to acquire either the remainder of the Units that it did not already own or the assets of Fording. After receiving advice from its external legal and financial advisors, the Independent Committees determined to communicate to Teck that they would be prepared to review and consider a proposal should Teck be interested in making one.

On June 13, 2007, Mr. Grandin contacted Mr. Lindsay to advise him of the decision of the Independent Committees.

On June 20, 2007, following regularly scheduled meetings of the Trustees and Directors, Mr. Lindsay met with representatives of the Independent Committees and described in general terms, the form of proposal that might be received from Teck. In this regard, Mr. Lindsay advised that Teck might be prepared to discuss a friendly, negotiated transaction whereby Teck would acquire Fording’s 60% interest in the Partnership by purchasing the Royalty and Fording LP. In that discussion, Mr. Lindsay advised Mr. Grandin that Ontario Teachers’ Pension Plan Board, then Fording’s largest Unitholder, had provided some level of assurance to Teck that it would support such a transaction.

After describing, in very general terms, the form of proposal that Teck might be prepared to make, Mr. Lindsay left the meeting and representatives of Osler and RBC joined the meeting.

The Independent Committees received preliminary advice from Osler regarding the tax consequences to certain types of Unitholders resulting from such a transaction. The Independent Committees also received preliminary advice from RBC with respect to the financial implications to Unitholders under different scenarios. The Independent Committees then discussed the outlook for the price of metallurgical coal in order to assess the viability of maintaining Fording’s current business model as compared to other alternatives that might be available to it. Discussion then ensued regarding Fording’s taxable status commencing in 2011 and the effect such status would have on distributions and the

trading price of the Units. The Independent Committees then sought RBC’s view as to whether there might be other potential purchasers for the Units or the assets of Fording. RBC expressed the view that given the long lived nature of Fording’s assets and the generally high quality of the metallurgical coal produced by the Partnership, there were potentially other parties that would be interested in pursuing a transaction with Fording. However, RBC cautioned that the fact that Fording was not the operator of the Partnership and could not take in kind the coal it produced, might be an issue for some parties. Osler cautioned that the ability to complete a sale of Fording’s assets to a party other than Teck would be subject to the rights of first offer enjoyed by Teck under the Teck Agreement and the EVCP Partnership Agreement.

On June 21, 2007, in a letter addressed to Mr. Grandin, Teck communicated its preliminary, non-binding expression of interest to Fording (the “Preliminary Expression of Interest”). The Preliminary Expression of Interest contemplated a transaction whereby Teck would purchase for cash, all of the assets of Fording (consisting principally of the Royalty and Fording’s interest in Fording LP), whereafter the Units would be redeemed using the proceeds of such sale. Teck advised that subject to equity market conditions and completion of further analysis, it might be prepared to offer consideration equivalent to CDN$38 per outstanding Unit. The offer consideration represented a premium of 20.8% based on the weighted average trading price of the Units on the TSX for the 20 trading days ending on the day prior to receipt of the Preliminary Expression of Interest. On June 21, 2007, the closing price of the Units on the TSX was $34.09. Teck advised that any offer that it might be prepared to make in this regard would not be subject to a financing condition but would be subject to other conditions customary in transactions of this type. Teck also indicated that were it to proceed, it would be seeking a “robust” non-solicitation covenant, a right to match and a break fee. On that same day, Mr. Grandin contacted the other members of the Independent Committees to advise them of the contents of the letter.

On June 26, 2007, the Independent Committees met again. Representatives from Osler and RBC attended the meeting. The principal purpose of the meeting was to consider the Preliminary Expression of Interest that had been received from Teck. The Independent Committees considered the Preliminary Expression of Interest in detail. Representatives of Osler provided the Independent Committees with an overview of the tax consequences to certain groups of Unitholders, such as taxable Canadian Unitholders and non-resident Unitholders, resulting from the transaction contemplated by the Preliminary Expression of Interest. The Independent Committees received advice from RBC regarding the implied premium contemplated by the Preliminary Expression of Interest. RBC also provided a range of premia in other Canadian transactions. RBC then updated its advice on possible financial implications to Unitholders under different scenarios and provided RBC’s coal price forecast as well as the views of other industry analysts. Lastly, RBC provided to the Independent Committees a list of parties that could potentially be interested in a transaction with Fording. After receiving the advice of its external advisors and after extensive discussion, the Independent Committees determined that the transaction contemplated by the Preliminary Expression of Interest would not yield sufficient value for the Unitholders and felt that the value gap was sufficiently large that no further discussion of such proposal was warranted. The Independent Committees directed that a written response setting out their position be prepared. The Independent Committees then considered their preparedness to evaluate and respond to any further proposals that might be received for Fording or its assets. Following those discussions, the Independent Committees resolved to engage in certain activities intended to improve their ability to evaluate and respond to any further proposals that might be received and directed that a data room be prepared.

On June 28, 2007, the Independent Committees met again. Representatives from Osler and RBC attended the meeting. The principal purpose of the meeting was to consider the draft response to Teck that had been prepared for review by the Independent Committees. After much discussion, the Independent Committees approved a form of letter to be delivered to Teck in response to its Preliminary Expression of Interest. The response stated that the Independent Committees did not find the Preliminary Expression of Interest compelling and were not prepared to engage in further discussions regarding such proposal. The letter concluded by advising that the Independent Committees were engaging in certain M&A preparedness activities and would shortly be requesting information and documents from the Partnership in that regard. The Independent Committees then received an update from Osler and RBC regarding the M&A preparedness activities undertaken since the previous meeting. Discussion then ensued regarding the level of preparedness that should be achieved following which the Independent Committees determined that it was important to develop a better understanding in terms of the interest level of other parties in pursing a transaction in order to be better informed as to the options available to Fording should Teck make a further proposal. Accordingly, RBC was directed to discreetly contact a limited number of parties to determine their interest in a transaction involving the Units or the assets of Fording. Such parties, which had been identified by RBC as those likely having the greatest interest in pursuing a transaction with Fording, included both international mining companies as well as steel producers.

The Independent Committees’ written response to the Preliminary Expression of Interest was delivered to Teck following the conclusion of the June 28th meeting and on June 29, 2007 Mr. Grandin and Mr. Lindsay spoke to discuss the Independent Committees’ response to the Preliminary Expression of Interest.

The Independent Committees met again on July 10, 2007. Representatives from Osler and RBC also attended the meeting. Mr. Grandin commenced the meeting by summarizing for the other members of the Independent Committees his discussions with Mr. Lindsay following the receipt by Teck of the Independent Committees’ response to its Preliminary Expression of Interest. The Independent Committees then received information from RBC regarding RBC’s discussions with the potentially interested parties that had been authorized at the previous meeting.

On July 18, 2007, Mr. Grandin contacted Mr. Brian Gibson of the Ontario Teachers’ Pension Plan Board to discuss its support of the transaction contemplated by the Preliminary Expression of Interest. In that discussion Mr. Gibson advised Mr. Grandin that while Ontario Teachers’ Pension Plan Board had provided some assurance to Teck that it would support the transaction contemplated by the Preliminary Expression of Interest, Ontario Teachers’ Pension Plan Board was also open to considering other transactions if they delivered superior value.

On July 19, 2007, Mr. Grandin contacted the other members of the Independent Committees to summarize for them his discussions with Mr. Gibson.

The Independent Committees met again on July 30, 2007. Representatives of Osler and RBC were also in attendance. The Independent Committees received a presentation from Osler with respect to the duties of the Independent Committees in connection with a taxable transaction, as well as the potential need for a formal valuation under applicable securities laws in the event that a transaction was pursued with Teck. Following that presentation, the Independent Committees received a joint recommendation from Osler and RBC as to certain further work that should be undertaken at that time such as completion of the virtual data room, preparation of a form of confidentiality agreement, completion of the preliminary market check being undertaken by RBC, and the preparation of a list of suitable independent valuators. In addition, RBC recommended that Mr. Grandin meet personally with representatives of five of the parties that had previously been contacted by RBC. The purpose of these meetings would be for Mr. Grandin to introduce himself and Fording to such organizations and discuss areas of mutual interest, but not to discuss the possibility or particulars of any potential transaction. The Independent Committees directed that all of these activities be undertaken and further directed that RBC continue to monitor the long term outlook for coal prices, the value of the Canadian dollar relative to the US dollar and the overall robustness of the M&A market.

On September 7, September 10 and September 11, 2007, Mr. Grandin met in person with five of the potentially interested parties that had been identified by RBC, in the manner that had been authorized at the July 30, 2007 meeting of the Independent Committees, at locations in the United States, Canada and the United Kingdom.

The Independent Committees met again on September 14, 2007. Representatives from Osler and RBC also attended the meeting. Mr. Grandin reported on his meetings on September 7, September 10 and September 11, 2007 with the five potentially interested parties. The Independent Committees received a report from RBC regarding further discussions between RBC and potentially interested parties. In particular, RBC highlighted for the Independent Committees various challenges associated with a transaction involving the Units or Fording’s assets with a party other than Teck. In this regard, RBC reported that some potentially interested parties had expressed concern that Fording did not enjoy operatorship of the Partnership nor could it directly access the coal the Partnership produced. Further, a transaction with a party other than Teck involving a sale of the assets of Fording would give rise to a right of first offer in favour of Teck under the EVCP Partnership Agreement and the Teck Agreement. While Osler expressed the view that this could potentially be manageable, it was acknowledged that it would create a significant delay and an element of uncertainty. Osler then updated the Independent Committees regarding its analysis of the expected tax consequences resulting from a sale of Fording’s assets to either Teck or another party. The Independent Committees also discussed the possibility of approaching Teck to determine its interest in selling its interest in the Partnership. RBC advised the Independent Committees that Teck was unlikely to be receptive to such an offer given Teck’s public statements regarding its desire to increase its exposure to coal and certain other non-LME traded commodities, but that such an approach to Teck may be appropriate at a later date depending upon the form and content of further approaches from Teck or, possibly, third parties.

On September 24, 2007, Teck announced that it had, through Teck Metals, acquired a further 16.65 million Units representing approximately 11.25% of all of the issued and outstanding Units, for cash consideration of approximately $600 million or CDN$36.00 per Unit, pursuant to a private agreement with a subsidiary of Ontario Teachers’ Pension Plan

Board. The press release also described provisions in the private agreement that would require Teck to make a further payment to Ontario Teachers’ Pension Plan Board in the event that prior to July 31, 2008, Teck or any of its affiliates made or commenced an offer or announced an intention to acquire more than 50% of the outstanding Units and completed such a transaction, or sold Units, in either case, at a price in excess of CDN$36 per Unit (referred to in this Circular as the “Top-Up Arrangements”). Following such acquisition, Teck held directly and indirectly 29,507,142 Units or approximately 19.95% of the Units then outstanding.

On September 27, 2007, Teck and Teck Metals filed a Schedule 13D with the SEC with respect to Teck Metals’ acquisition of 16.65 million Units from a subsidiary of Ontario Teachers’ Pension Plan Board.

Subsequent to the issuance of the press release describing Teck’s acquisition of a further 16.65 million Units, Mr. Lindsay contacted Mr. Grandin on September 27, 2007 to advise him as to why Teck had elected to increase the number of Units that it held at that time. In particular, Mr. Lindsay advised that through its direct interest in the Partnership and through its indirect interest in the Partnership through its ownership of Units, it now held a greater than 50% direct and indirect interest in the Partnership which Mr. Lindsay said would be helpful in discharging its duties as managing partner.

On October 5, 2007, the Independent Committees met again. Representatives from Osler and RBC attended the meeting. Osler provided the Independent Committees with an overview of the agreement pursuant to which Teck acquired a further 16.65 million Units from a subsidiary of Ontario Teachers’ Pension Plan Board. RBC noted that Teck’s increased ownership position would make it more difficult to conclude a transaction with another party in circumstances where such transaction required approval by a special resolution of Unitholders. RBC then provided the Independent Committees with updated information with respect to coal price estimates and US$/CDN$ exchange rates. Mr. Grandin summarized for the Independent Committees his recent discussions with Mr. Lindsay.

The Independent Committees met again on October 29, 2007. Representatives from Osler and RBC were in attendance. The Independent Committees received a presentation from RBC with respect to strategic alternatives available to them. A wide range of alternatives were discussed including maintaining the status quo, pursuing a transaction with Teck or another party, purchasing Teck’s interest in the Partnership or undertaking some form of recapitalization. After extensive discussion, it was concluded that certain options, such as a recapitalization or a purchase of Teck’s interest in the Partnership, were unavailable in the circumstances. Issues associated with other of the options were also discussed. Following extensive discussions, the Independent Committees resolved to continue, on a private basis, a confidential solicitation of interest from a limited number of parties while giving further consideration to a more public “auction” process. In this regard, RBC advised that the five parties that Mr. Grandin had previously met with and five of the other parties that RBC had contacted previously, should be approached again. After some discussion on the point, RBC was directed by the Independent Committees to contact all such parties again to determine their interest in a possible transaction with Fording.

Following completion of the October 29, 2007 meeting, RBC contacted the 10 parties in the manner that the Independent Committees had directed at that meeting.

On November 2, 2007, the Trustees and the Directors met to receive the recommendation of the Independent Committees. Mr. Grandin reported on the circumstances giving rise to the original formation of the Independent Committees and the retention of Osler and RBC. In particular, Mr. Grandin advised the Trustees and the Directors that the Independent Committees had met on numerous occasions since their formation in June of 2007. In summarizing the work undertaken to date, Mr. Grandin advised the Trustees and Directors that while the Preliminary Expression of Interest from Teck that gave rise to the creation of the Independent Committees was not sufficiently attractive to merit further discussion, it did result in a determination by the Independent Committees to undertake further work so as to improve their ability to evaluate and respond to any further proposal that might be received from Teck or from another party. It was for this reason that the Independent Committees directed RBC to approach, on a confidential basis, a limited number of parties to determine their interest in a possible transaction with Fording. Mr. Grandin then advised the Trustees and Directors that the Independent Committees were recommending that their mandates be extended to authorize them to:


	•	continue the confidential process to determine whether there are entities, including Teck, that might have an interest in acquiring all or a portion of Fording or its assets;

	•	review and consider the terms of any solicited or unsolicited proposals that might be received;

	•	negotiate the terms of any such transaction, if deemed appropriate;


	•	recommend to the Trustees and Directors a transaction, if any, that the Independent Committees determined to be in the best interest of Unitholders; and

	•	engage any and all advisors that the Independent Committees deem necessary to accomplish the above.

Mr. Grandin concluded his presentation by reminding the Trustees and Directors that the Independent Committees were not, at that time, recommending the sale of Fording or its assets but rather that Fording continue its confidential process to improve the ability of the Independent Committees to evaluate and respond, in a timely manner, to any proposals that might be received, as well as to consider other strategic alternatives that might be available to Fording including maintaining Fording’s current business model.

The Independent Committees met again on November 2, 2007 following completion of the meeting of the Trustees and Directors. Representatives from Osler attended the meeting. The Independent Committees considered the engagement agreement that had been proposed by RBC, discussed the need to ensure a robust market canvas, and authorized Mr. Grandin in his capacity as Chairman of the Independent Committees to finalize and execute the engagement letter on behalf of the Independent Committees. The Independent Committees also discussed the form of a proposed confidentiality agreement to be entered into by potentially interested parties prior to allowing them access to the virtual data room that had been established. The Independent Committees also resolved to hire Mr. John Lute of Lute & Co. as a communications consultant. The Independent Committees then authorized Mr. Grandin to finalize the engagement agreement with Lute & Co. on their behalf. Representatives of Osler then provided the Independent Committees with an oral presentation with respect to avoiding potential issues of conflict faced by certain officers of Fording and of Fording ULC other than Mr. Grandin.

The Independent Committees met again on November 23, 2007. Representatives from Osler and RBC also attended the meeting. Mr. Grandin reported that the terms of RBC’s engagement agreement had been finalized and that the engagement letter had been executed. Mr. Grandin also advised that John Lute had been retained as communications consultant to the Independent Committees. RBC advised that confidentiality agreements had been distributed to several potentially interested parties, and provided updated information with respect to RBC’s discussions with such parties. RBC commented that all parties who had been contacted had expressed interest in either (i) receiving publicly available information in order to consider if they would like to proceed further, or (ii) had immediately requested a confidentiality agreement. RBC also commented that the parties contacted indicated that they understood that Fording held a royalty interest and did not have operating rights or access to the coal produced by the Partnership and that, although not the preferred structure for the bidders, that it would not necessarily prevent them from submitting an offer. RBC cautioned that it was not unusual at an early stage in the process for bidders to profess an ability to abide by key structuring terms until they had been afforded the opportunity to conduct due diligence and that bidders could change their point of view following due diligence. RBC then recommended that certain additional parties be contacted to determine their interest in potentially pursuing a transaction with Fording. After some discussions, the Independent Committees determined to authorize RBC to make such further contacts.

Following completion of the November 23, 2007 meeting, RBC contacted the additional parties in the manner that the Independent Committees had directed at that meeting.

The Independent Committees met again on December 3, 2007. Representatives from Osler and RBC attended the meeting. RBC provided the Independent Committees with further information with respect to RBC’s discussions with potentially interested parties. RBC commented that all likely potential bidders had been contacted and that the negotiation of confidentiality agreements was underway and proceeding in the normal course. RBC also noted that the unsolicited take-over bid made by BHP Billiton Plc for Rio Tinto Plc was causing a level of distraction for certain potential purchasers as they considered the market implications of such a merger. RBC also provided an update on its view of long-term coal prices and US$/CDN$ exchange rates as well as the views of other industry analysts. The Independent Committees again discussed alternatives available to Fording and considered, among other things, the prospects for increasing coal production through expansion of existing mines or development of new mines. Issues relating to existing rail and port constraints and the limitations such constraints imposed upon expansion plans were also discussed.

On December 5, 2007, at the request of Mr. Grandin in his capacity as Chairman of the Independent Committees, Fording issued a press release describing the formation of the Independent Committees and their mandate. The press release also advised that RBC had been engaged by the Independent Committees to assist them in their work. The Independent Committees determined that it was advisable to issue a public release at that time for a number of reasons.

First, the Independent Committees felt that contacting additional potentially interested parties would significantly increase the chances of a leak in the public markets. Second, making a public announcement of the process commenced by the Independent Committees would permit Fording to make an internal communication to its officers and employees. Third, publicly announcing the Independent Committees’ process would assist RBC in identifying additional potentially interested parties.

Following the issuance of the press release announcing the formation of the Independent Committees and their mandate by Fording on December 5, 2007, a limited number of parties that had not been approached previously by RBC, contacted RBC to express their interest in participating in the process.

The Independent Committees met again on January 15, 2008. Representatives from Osler and RBC attended the meeting. At that meeting, RBC advised that 15 parties had signed confidentiality agreements and expressed a high level of interest. The Independent Committees received advice from RBC regarding milestones for the process going forward. It was originally anticipated that the initial bid date would be late January, however, RBC advised that the deadline should be extended in order to capture the value of the rapidly increasing industry forecasts for metallurgical coal prices. After considerable discussion, the Independent Committees determined to call for indicative first round offers in the last week of February.

The Independent Committees met again on March 4, 2008. Representatives from Osler and RBC attended the meeting. RBC provided the Trustees with an overview of the comprehensive process that had been undertaken to date to identify potentially interested parties and its status. 21 potentially interested parties were contacted, 15 of which signed confidentiality agreements and undertook some level of due diligence. Such confidentiality agreements permit the signatories to make a superior proposal to Fording in the event of a transaction such as the Arrangement. Ultimately, however, non-binding indications of interest were received from only two parties. Each such party had, in its initial expression of interest, contemplated an acquisition of all of the outstanding Units. One party proposed a purchase price of $45.00 per Unit while the other party proposed a purchase price of $59.00 per Unit. On the date that the preliminary indications of interest were received, the closing price of the Units on the TSX was $49.00 and the weighted average trading price in respect of the 20 days preceding such date was $47.00. Neither indication of interest contemplated a financing condition. Both parties indicated that further due diligence would be required including site visits and management presentations. One of the parties indicated to RBC that it was potentially interested in an asset purchase transaction but expressed some reservation about the right of first offer enjoyed by Teck and the tax consequences of such a transaction. The other party indicated that it would not be able to provide a definitive offer until it had an opportunity to meet with Teck. The Independent Committees determined to permit both parties to undertake further due diligence and conduct site visits. The Independent Committees then received an update from RBC on coal prices and US$/CDN$ exchange rates including the estimates of various analysts as well as non-dealer sources.

Following the March 4, 2008 meeting, the two parties that had submitted expressions of interest conducted significant additional due diligence, made site visits and received management presentations led by Mr. Grandin and Mr. Boyd Payne, President of Fording. One of the parties undertook further due diligence regarding the viability of an asset purchase transaction which included, among other things, retaining an internationally recognized accounting firm and conducting extensive discussions with Osler. During this period, RBC was in frequent communication with both interested parties. In the course of these discussions, RBC advised both parties that the Independent Committees would not support any offer that was at a price below the prevailing market price of the Units. During these discussions, both parties indicated that in order to pay a premium to the market price for the Units at that time, they would have to be able to utilize, in whole or in part, the tax pools that existed at the Partnership level which could only be achieved in the context of an asset purchase transaction. Further, both parties expressed the view that they would need to be able to speak with Teck and possibly obtain some level of support, and an agreement on some level that would permit the party to directly access the coal produced by the Partnership, prior to coming forward with any definitive proposal. Further, in early June, 2008, one party verbally communicated to RBC that it would not be in a position to put forward an offer at current market prices (which at the time was approximately $75) and therefore it was highly unlikely that they would submit a final offer. Based on numerous discussions with RBC and Osler, Mr. Grandin formed the view that it was unlikely that either party would propose a transaction for the Units at a premium to market and that a premium to market could only be obtained pursuant to an asset purchase transaction. Mr. Grandin further concluded that it was unlikely that an asset transaction could be consummated without the support of Teck given Teck’s role as operator of the Partnership and its right of first offer contained in the EVCP Partnership Agreement and in the Teck Agreement. Further, given the Top-Up Arrangements between Teck and Ontario Teachers’ Pension Plan Board, RBC advised that Teck would be unlikely to agree to support

any form of transaction prior to the expiry of those arrangements. Mr. Grandin spoke with various members of the Independent Committees and the decision was made not to call for final offers from the two parties that had submitted initial indications of interest at that time and to suspend the process until such time as Teck’s obligations under the Top-Up Arrangements had expired.

In early June 2008, RBC communicated the decision of the Independent Committees to both parties that had submitted non-binding, indicative expressions of interest.

On June 4, 2008, one of the parties that had submitted a preliminary indication of interest advised RBC that it would not be submitting a formal offer at that time but retained some interest in exploring a potential transaction involving Fording in the future.

On June 20, 2008, Teck and Teck Metals filed Amendment No. 1 to the Schedule 13D filed by Teck and Teck Metals on September 27, 2007. The purpose of the amendment was to update the original filing by, among other things, disclosing that Teck was considering and evaluating all of its alternatives with respect to its investment in, and intentions with respect to, Fording and was in contact with Fording and its financial advisors.

On June 25, 2008, there was a regularly scheduled meeting of the Trustees and Directors. At that meeting, Mr. Lindsay advised the other Directors and the Trustees that in light of the then-current market price of the Units, which closed on the Toronto Stock Exchange on June 24, 2008 at $93.42, Teck had determined not to take any further action with respect to a possible transaction with Fording at that time; however, Teck continued to be interested in simplifying the Partnership structure.

Following completion of the regularly scheduled Trustees and Directors meetings held on June 25, 2008, the Independent Committees met to discuss the status of the strategic review process and considered again certain of the alternatives that might be available to Fording. In addition, the Independent Committees discussed Mr. Lindsay’s comments at the previous meeting.

In late June and early July of 2008, there were a number of calls between Mr. Grandin and Mr. Lindsay as well as between RBC and CIBC World Markets (“CIBC”), financial advisor to Teck. On July 3, 2008, representatives of CIBC and RBC met to discuss whether the Independent Committees would be prepared to consider a further proposal from Teck. Thereafter, Mr. Lindsay communicated to Mr. Grandin that Teck had undertaken preliminary discussions with Ontario Teachers’ Pension Plan Board with respect to the potential to amend the Top-Up Arrangements and Mr. Lindsay believed that Teck was currently in a position to pursue a transaction with Fording. In further discussions, Mr. Lindsay communicated to Mr. Grandin that Teck was in the process of arranging a financing package in order to be in a position to make a further proposal. In separate discussions between Mr. Lindsay and Mr. Gordon Bell of RBC held on July 7, July 8 and July 11, 2008, Mr. Lindsay indicated that he was prepared to pay a premium to the market price. Although there was no agreement as to what an appropriate premium would be, both Mr. Bell and Mr. Lindsay agreed that any price that Teck might propose would have to be attractive to Unitholders, in an amount that could be supported by the Directors and Trustees and at a level and on such other terms as would allow RBC to deliver a fairness opinion. Mr. Lindsay and Mr. Bell also discussed certain procedures and logistics whereby more formal discussions between the parties could take place. Mr. Bell relayed the substance of these calls to Mr. Grandin following their completion. Mr. Grandin communicated the substance of these discussions to the members of the Independent Committees in a number of telephone calls although no formal meeting was convened to consider these developments.

On July 11, 2008, Mr. Grandin convened a conference call with RBC and Osler to discuss the process of receiving a proposal from Teck. During the course of that call, the requirement for an independent valuation for purposes of MI 61-101 was considered again and RBC made certain recommendations as to parties with the requisite qualifications and independence to provide such a valuation. Based on those discussions, it was determined to convene a meeting of the Independent Committees on July 13, 2008 for purposes of advising the Independent Committees of further recent developments as well as to consider whether preparations for an independent valuation should be commenced at that time.

On July 13, 2008, the Independent Committees met. Representatives of Osler and RBC attended the meeting. RBC summarized for the meeting the process undertaken to date and the various strategic alternatives that were then under consideration as well as the proposals that had been received to date. In this regard, RBC summarized the considerations of the Independent Committees when evaluating the following options: maintaining Fording’s current business model; acquiring another trust or other business; acquiring Teck’s interest in the Partnership; or selling Fording or its assets to a third party. Mr. Grandin reported on his discussions with Mr. Lindsay and indicated that Teck was contemplating an asset

purchase transaction whereby it would acquire the Royalty as well as Fording’s interest in Fording LP. Mr. Grandin advised that Mr. Lindsay had said that Teck was only prepared to pursue a negotiated transaction that was fully supported by the Trustees and Directors. The Independent Committees then extensively considered the expected tax implications of such a transaction. Osler advised that taxable Canadian Unitholders who held their Units as capital property should be able to obtain capital treatment in the event that they sold their Units in the public markets prior to completion of a transaction and that most non-residents would generally not be subject to Canadian taxation on a sale of Units in the public markets. RBC then provided its view that there would be sufficient liquidity in the public markets to enable Unitholders wishing to sell their Units prior to the completion of any such transaction in order to obtain capital gains treatment, to do so at a small discount to any per Unit price that might be offered by Teck. The Independent Committees then received RBC’s advice as to which investment banks, not already engaged by parties that had participated in the sale process, had the appropriate experience to prepare an independent valuation of Fording. RBC also advised the Independent Committees that Teck had agreed to pay the costs associated with obtaining an independent valuation. The Independent Committees then resolved to retain a qualified investment bank to undertake an independent valuation at the appropriate time and directed Mr. Grandin to make the final selection and negotiate a retainer letter. The Independent Committees also directed RBC to communicate to Teck that their decision to commission an independent valuation was motivated principally by a desire to obtain greater clarity as to the value of the Units, and did not reflect their determination to proceed with a transaction with Teck. The Independent Committees also discussed at length whether Teck should be required to enter into a confidentiality and standstill agreement as a pre-condition to making a further proposal.

Following the July 13, 2008 meeting, National Bank Financial was retained to prepare an independent valuation. National Bank Financial was selected based in part on its experience in the resource sector as well as in reliance on representations made by National Bank Financial regarding its independence from Teck and Ontario Teachers’ Pension Plan Board. National Bank Financial advised Mr. Grandin that it would be in a position to provide its preliminary views on July 24, 2008 if required by the Independent Committees.

In mid-July, RBC advised Mr. Grandin that an affiliate of RBC had been invited to participate in the syndicate of banks being formed to lend monies to Teck to facilitate a transaction with Fording. RBC stated that a separate RBC team would participate in the debt financing and that appropriate information barriers and ethical walls would be put in place to protect Fording’s confidential information. RBC advised Mr. Grandin that Teck had expressed the view that given the anticipated amounts it would have to borrow, Teck’s ability to make a fair offer to the Unitholders would be substantially strengthened if RBC was a member of the syndicate. Based on RBC’s representations, and following discussions with other members of the Independent Committees, Mr. Grandin consented to the affiliate of RBC’s participation in such syndicate. On July 15, 2008, Mr. Grandin advised Mr. Lindsay in an email that Mr. Grandin had advised the Independent Committees that the affiliate of RBC would be invited into Teck’s banking syndicate being formed in connection with a possible transaction with Fording.

On Friday, July 18, 2008, Osler provided to Teck, as well as to Stikeman Elliott, counsel to Teck, a preliminary draft of the arrangement agreement that would record the agreement of the parties with respect to a transaction in the event any such agreement was reached.

The Independent Committees met on July 24, 2008. Representatives from Osler and RBC attended the meeting. Mr. Grandin provided a summary of his recent discussions with Mr. Lindsay wherein Mr. Grandin communicated that National Bank Financial had been retained to undertake preparatory work for an independent valuation. RBC then advised the Independent Committees of certain material developments that had come to light following their discussions with CIBC. In particular, RBC advised that any proposal that might be received from Teck would likely include, as part of the offered consideration, a certain percentage of Class B Shares. Osler advised on the legal and logistical issues associated with introducing Class B Shares as part of the consideration offered to Unitholders. RBC then commented on the market and financial implications resulting from Teck’s decision to offer share consideration as part of any offer it might make. Osler advised on its discussions with Stikeman Elliott. Osler also summarized potential areas of negotiation between Fording and Teck arising out of its discussions with Stikeman Elliott regarding the provisions of the proposed Arrangement Agreement. RBC then reviewed the status of its market canvas. In particular, RBC provided its view as to the likelihood as to whether any of the parties that had participated in the process, including the two parties that had submitted preliminary indications of interest, or any other parties, would be interested in a potential transaction given the current trading price of the Units in the market. In this regard RBC advised that given the current trading price of the Units, it was highly unlikely that any other parties would come forward with an offer that was superior to the premium to market offer that Teck was contemplating, absent an ability to gain direct access to the coal produced by the Partnership. After

further extensive discussions, the Independent Committees determined to receive National Bank Financial’s preliminary views.

Representatives of National Bank Financial then joined the meeting and summarized for the Independent Committees the work that had been undertaken to date as well as the additional work that would be required in order to complete their independent valuation. National Bank Financial cautioned that completion of the additional work could result in changes to its preliminary view, although its expectation was that such changes would be minor. Based on the preliminary work that had then been completed and subject to the caution noted above, National Bank Financial expressed its view that the fair market value of the Units was between CDN$79.00 to CDN$97.00. National Bank Financial also reviewed published information on future coal prices and its analysis of that information. It then expressed its preliminary view of long term coal prices and US$/CDN$ exchange rates. Representatives of National Bank Financial then left the meeting. At that point, RBC reviewed with the Independent Committees the results of its preliminary analysis that would support its view on fairness should a fairness opinion be sought, including its analysis of coal prices and foreign exchange rates.

Following receipt of the presentation from National Bank Financial and RBC, the Independent Committees directed Mr. Grandin to communicate to Teck that they would be prepared to consider a proposal. However, Mr. Grandin, RBC and Osler were instructed to communicate to Teck and their advisors that a confidentiality and standstill agreement would be required in order to proceed with the negotiation of a transaction. Following the meeting, the views of the Independent Committees were communicated to Teck and its advisors by, respectively, Mr. Grandin and RBC. Teck and its advisors were not advised of National Bank Financial’s preliminary view of the fair market value of the Units.

On July 25, 2008, the Independent Committees met. Representatives of Osler and RBC attended the meeting. The purpose of the meeting was to consider an indicative and non-binding proposal that had been received from Teck just prior to the meeting pursuant to which Teck had offered to purchase the assets of Fording for aggregate consideration of US$87.00 per Unit, consisting of US$77.00 in cash and 0.245 of a Class B Share, payment of Fording’s transaction costs and assumption of its other liabilities. The proposal was subject to Fording suspending distributions until completion of the transaction and that Fording’s transaction costs and other liabilities not exceed $410 million in the aggregate. The proposal contemplated that it would be a condition in favour of Teck that the financing from its lenders be available at closing. There was then extensive discussion regarding Teck’s proposal and in particular, the overall value of the offer, the fact that it required the suspension of distributions otherwise payable to Unitholders, the fact that the cash consideration was proposed to be paid in US dollars, the fact that a portion of the consideration was in the form of Class B Shares and the fact that the proposal was subject to financing. The Independent Committees then considered what an appropriate counter offer might be and received advice from RBC in that regard. There was also extensive discussion as to whether Unitholders would be better served by having Fording continue with its current business model as opposed to selling the Units or the assets of Fording at that time. In this regard, RBC and a number of members of the Independent Committees commented on the fact that metallurgical coal was trading at an all time high and that consensus projections from analysts, the view of RBC and the view reflected in the preliminary view expressed by National Bank Financial to the Independent Committees, was that such prices would not continue over the long term (although there was uncertainty as exactly to when prices would begin to weaken materially). The Independent Committees also considered the estimates they had received from various sources regarding long term coal prices. The Independent Committees then discussed the implications to Unitholder value resulting from the taxable status of Fording commencing in 2011. Accordingly, the Independent Committees formed the view that maintaining the status quo would likely only yield superior value to Unitholders in circumstances where existing coal prices were maintained over an extended period of time or where long term coal prices were higher than the estimates that had been received. After extensive discussion, including consideration of indicating to Teck that the Independent Committees did not wish to discuss further a supported offer, the Independent Committees decided to indicate a level at which they would be willing to recommend a transaction to Unitholders. In that regard, the Independent Committees determined to propose a counter offer of US$96.00 with the proviso that distributions not be suspended (with the result that Unitholders would receive a distribution in respect of the third quarter in the range of US$2.50 to US$3.00 per Unit). Mr. Grandin was instructed to communicate the Independent Committees’ counter proposal to Teck. Osler was instructed to terminate its discussions with Stikeman Elliott regarding the provisions of the Arrangement Agreement.

Immediately following completion of the meeting, Mr. Grandin called Mr. Lindsay and communicated the decision of the Independent Committees. Mr. Lindsay advised Mr. Grandin that he would discuss the revised proposal internally.

On the morning of July 26, 2008, Mr. Lindsay called Mr. Grandin to communicate to Mr. Grandin the material terms of a revised proposal from Teck. Mr. Lindsay advised that Teck might be willing to accept a deal at US$90.00 comprised of US$80.00 in cash and 0.245 of a Class B Share for each Unit provided that distributions were suspended upon entering into a definitive agreement and otherwise on the terms originally proposed. Mr. Grandin indicated that he would take the revised proposal to the Independent Committees.

Later on July 26, 2008, the Independent Committees met again. Representatives of Osler and RBC attended the meeting. At the meeting, Mr. Grandin updated the Independent Committees as to the terms of Teck’s revised proposal. The Independent Committees considered the revised proposal and received the advice of their advisors in connection therewith. In particular, there was extensive discussion regarding the value to be ascribed to the share consideration. The Independent Committees again discussed whether to cease discussions or make an appropriate counter offer. Following those discussions, the Independent Committees directed Mr. Grandin to communicate to Teck that the Independent Committees would be prepared to consider an offer comprised of US$80.00 in cash plus 0.335 of Class B Share per Unit provided that Unitholders received a fixed distribution of CDN$3.00 per Unit. RBC advised that using current exchange rates and market prices for the Class B Shares, the counter offer proposed by the Independent Committees was worth approximately CDN$95 per Unit (exclusive of the CDN$3.00 distribution).

Following the completion of that meeting, Mr. Grandin communicated the Independent Committees’ revised proposal to Mr. Lindsay. Mr. Lindsay indicated that he would discuss the matter internally and would be in contact with Mr. Grandin. Osler was directed to recommence negotiations on the terms of the Arrangement Agreement. RBC and Osler commenced a confirmatory diligence investigation of Teck, including the review by Osler of a data room that had been prepared by Teck and the holding of an oral due diligence session led by Osler and in which RBC participated with Teck officers and auditors.

On the morning of July 27, 2008, Mr. Lindsay called Mr. Grandin and advised that Teck was prepared to raise its offer to US$82.00 in cash (including a final Unitholder distribution of US$3.00 but otherwise assuming suspension of Unitholder distributions through to completion of the transaction), plus 0.245 of a Class B Share per Unit and otherwise on the terms originally proposed. Mr. Lindsay advised that this was Teck’s final offer. Mr. Grandin advised Mr. Lindsay that he would discuss Teck’s revised offer with the Independent Committees.

Later on July 27, 2008, the Independent Committee met again. Representatives from Osler and RBC attended the meeting. The main purpose of the meeting was to advise the Independent Committees of the terms of the revised proposal that had been put forward by Teck (US$92.00 comprised of US$82.00 in cash (including a final Unitholder distribution of US$3.00 but otherwise assuming suspension of Unitholder distributions through to completion of the transaction), and 0.245 Class B Shares). Discussions then ensued regarding the revised proposal. Mr. Grandin advised the Independent Committee that Mr. Lindsay had said that this was Teck’s final offer. Osler then advised the Independent Committees that based on its discussions with Stikeman Elliott, Teck was seeking a US$450 million break fee and a 10 day right to match. Osler reminded the Independent Committee that the proposal continued to be subject to financing and confirmed that in addition, Teck was proposing to sell its approximately 29.5 million Units and use the proceeds from such sale to finance a portion of its offer. RBC reiterated its earlier advice that notwithstanding the stock component, the fact that the cash consideration would be paid in US dollars and that Teck would be required to sell its approximately 29.5 million Units in order to complete the proposed transaction, there should be sufficient liquidity in the market such that Unitholders wishing to sell prior to closing would have the opportunity to do so and that following the Transaction Confirmation Date, the spread between the market price for the Units and the consideration available under the offer would be materially reduced as a result of increased deal certainty and the time value of money. The Independent Committees instructed their advisors to seek a shorter match period and break fee that was less than 3% of the total transaction value. The advisors were also instructed to seek a reverse break fee in response to Teck’s request for a financing condition. In response to a question as to whether the current Teck proposal represented a sufficient premium to market, RBC expressed its view as to the value that would have to be obtained in order for the offer to achieve broad support in the market. Lastly there was a discussion regarding a possible time table to closing in light of Teck’s request to suspend distributions upon execution of the Arrangement Agreement. The Independent Committees then resolved to test Teck’s position that it had put its last, best offer forward, by making a further counter proposal of Teck’s current offer plus an additional $2.00 of consideration per Unit (payable in either cash or Class B Shares). Mr. Grandin was instructed to communicate this counter proposal to Mr. Lindsay. A further meeting of the Independent Committees was scheduled for later that day.

Following completion of that meeting, Mr. Grandin communicated the decision of the Independent Committees to Mr. Lindsay including their counter proposal. Mr. Lindsay reiterated that Teck’s previous proposal represented its last offer but nonetheless agreed to discuss the counter proposal internally.

The Independent Committees reconvened later in the day on July 27, 2008, with representatives of Osler and RBC being present. The principal purpose of the meeting was to receive an update from Mr. Grandin as to his further discussions with Mr. Lindsay and from the advisors with respect to the status of the negotiations of the Arrangement Agreement and the other definitive documentation. Mr. Grandin advised the Independent Committees that Mr. Lindsay had said that Teck was not prepared to improve on its previous proposal and reiterated that such proposal represented its last, best offer. Osler and RBC then advised on the status of the negotiation of the definitive documentation. In particular, the financing condition was discussed in detail and the Independent Committees received advice from Osler, following its review of the Debt Commitment Letter that had been provided by Teck, regarding the conditions that would have to be satisfied in order for such financing to be available at closing. There was also significant discussion regarding the magnitude of the proposed break fee and Teck’s request to suspend distributions upon the signing of the Arrangement Agreement. The Independent Committees determined not to make any further decision with respect to Teck’s revised offer until such time as certain of the key issues other than price had been resolved. The advisors were directed to continue their negotiation of the definitive documentation with representatives of Teck and its advisors.

The Independent Committees met on the morning of July 28, 2008. Representatives of Osler and RBC were present. Mr. Grandin reported on a discussion that he had had with Mr. Lindsay regarding the financing condition in the Teck revised offer. Representatives of Osler and RBC reported on the status of negotiation of the Arrangement Agreement and certain of the key issues that had been discussed at the previous meetings. Osler also advised that Teck had stated that it was not prepared to entertain a reverse break fee. Osler and RBC reported on the scope and results of the confirmatory diligence investigation that had been undertaken in respect of Teck. A further meeting of the Independent Committees was scheduled later in the day to receive an update on these points.

The Independent Committees reconvened later in the day on July 28, 2008. Representatives of Osler and RBC were present. The Independent Committees received a report from Osler and RBC on the status of the negotiation of the Arrangement Agreement and related documentation. In particular Osler reported that Teck was prepared to accept a break fee of $400 million which was approximately 2.9% of the consideration available under the current proposal as well as to shorten the matching period to eight days. Osler expressed the view that while an eight day matching period was somewhat longer than what was customary in such circumstances, Teck had agreed to waive in certain circumstances its rights of first offer under the EVCP Partnership Agreement and the Teck Agreement (which allowed Teck a period of 60 days within which to determine whether to exercise such rights). There was further discussion about Teck’s financing arrangements and the Independent Committees received further advice from Osler and RBC on that topic. Osler and RBC also provided advice as to how the risk associated with the financing condition could be mitigated in part through the receipt of stronger covenants from Teck as well as Teck’s agreement to pay Fording’s transaction costs if the transaction did not proceed as a result of the failure of Teck to obtain the required financing. RBC also provided its view as to the current state of the credit markets and the likelihood that Teck could obtain the financing it required to complete a transaction with Fording. The Independent Committees then received an oral presentation from National Bank Financial wherein it set out the final results of its independent valuation. Those results were substantially consistent with the previous report which had been received by the Independent Committees although National Bank Financial increased its range of fair market value for the Units to CDN$79.00 to CDN$99.00 as a result of its further work including discussions with Fording’s senior management team. There was then a further discussion on coal prices. At the request of the Independent Committee, RBC then provided an oral fairness opinion to the Independent Committees in which RBC concluded that, as of July 28, 2008, the consideration under the Arrangement was fair, from a financial point of view, to Unitholders (other than Teck and its affiliates). RBC also described its analysis in reaching its opinion on fairness. RBC also advised that the consideration under Teck’s final proposal represented a premium of approximately 17% based on the weighted average trading price of the Units on the TSX for the 20 trading days ended July 28, 2008. Based on the foregoing, the Independent Committees unanimously resolved to accept Teck’s final proposal subject to certain other material terms of the Arrangement Agreement being resolved in a manner favourable to the Unitholders, and directed Mr. Grandin to conclude those negotiations. Mr. Grandin then left the meeting to speak with Mr. Lindsay. Mr. Grandin returned to the meeting and reported that Mr. Lindsay had agreed to accept Fording’s position on such material terms. The meeting then terminated to permit a full meeting of the Trustees and Directors to commence.

A meeting of the Trustees and Directors was then held with representatives of Osler and RBC in attendance. Messrs. Lindsay, Seyffert and Thompson declared their interest in the matters before the meeting, abstained from voting and were excused from the meeting. National Bank Financial then made an oral presentation wherein it set out the final results of its independent valuation of Fording which were consistent with its presentation at the prior meeting of the Independent Committees. RBC then provided its oral fairness opinion that was consistent with the fairness opinion expressed at the prior meeting of the Independent Committee. The meeting then received the recommendation of the Independent Committees that Fording accept the revised offer put forward by Teck being US$82.00 in cash (including a final distribution of US$3.00) and 0.245 of a Class B Share per Unit with distributions otherwise being suspended upon execution of the Arrangement Agreement and Teck paying all of Fording’s transaction costs and assuming all of its other liabilities. The Trustees and Directors agreed unanimously (with the exception of those Trustees and Directors that had abstained from voting) to accept such offer by authorizing Fording to enter into the Arrangement Agreement and to recommend that Unitholders vote in favour of the transaction.

Final negotiation of the Arrangement Agreement and a confidentiality and standstill agreement with Teck proceeded throughout the remainder of the evening and into the early hours of Tuesday, July 29th. Those agreements were concluded at approximately 6:00 a.m. Calgary time. Executed signature pages were then exchanged and a press release announcing the transaction was issued by each of Fording and Teck prior to open of trading on the TSX and the NYSE.

The Independent Committees have expressly adopted the analyses and opinion of each of RBC and National Bank Financial, among the other factors considered by the Independent Committees in reaching their respective determinations.

Position of the Independent Committees as to Fairness


	•	The Independent Committees were formed in June 2007 and were given a broad mandate to consider a wide range of alternatives, including an acquisition of all of Fording’s Units by a third party, a sale of Fording’s assets, including its interest in the Partnership, a combination, reorganization or similar form of transaction, an acquisition of Teck’s 40% interest in the Partnership or continuing with Fording’s current business model. The announcement of the Arrangement Agreement on July 29, 2008 represents the culmination of a 14-month process that has been conducted at the direction and under the supervision of the Independent Committees, and with the advice of experienced external advisors, pursuant to which 21 parties located around the world were contacted to determine their interest in pursuing a transaction with Fording. From this group, 15 parties entered into confidentiality agreements and undertook a due diligence investigation of Fording and its assets. This process resulted in two indicative expressions of interest, from parties other than Teck, being received in March 2008 at values significantly lower than the consideration available under the Arrangement. In light of the thoroughness and independence of the process, the Independent Committees believe that the consideration available to Unitholders under the Arrangement represents superior value to Unitholders over any of the other alternatives that were considered.

	•	Due to a combination of a strong demand for steel and a tight supply of seaborne metallurgical coal, exacerbated by flooding in Queensland, Australia, metallurgical coal prices for the 2008 coal year have reached historic highs of approximately US$300 per tonne and are substantially higher than the average price for seaborne metallurgical coal over the preceding 20 years and the prior year coal price of approximately US$93 per tonne. This in turn has contributed to a significant increase in the trading price of the Units. If current pricing for metallurgical coal is not sustained in respect of subsequent coal years, then the increase in revenue and income from operations experienced by Fording in respect of the 2008 coal year, and the resulting level of distributions paid to Unitholders, will not be sustainable particularly in the context of the Partnership’s position as a high cost producer relative to its competitors. The Independent Committees considered forecasts of future coal prices from various sources as well as the advice of its financial advisors regarding such forecasts when evaluating whether maintaining Fording’s current business model would yield superior value to Unitholders compared to the Arrangement. The Independent Committees concluded that maintaining Fording’s current business model would only provide enhanced value to Unitholders in circumstances where either the long-term average price of metallurgical coal is materially higher than the average level the analysts that were surveyed are currently


		projecting or where current metallurgical coal prices were maintained for a period materially longer than the average period the analysts that were surveyed are currently projecting, even without factoring in Fording’s taxable status commencing in 2011 as a result of the SIFT Rules.


	•	The SIFT Rules and the elimination of the tax efficiencies on distributions commencing in 2011 would reduce the cash flow otherwise available for distribution to Unitholders. In turn, the reduction of the amount of income distributed to Unitholders as a result of Fording’s taxable status could be expected to result in a reduction in the trading price of the Units.

	•	The opinion of RBC to the effect that, as of July 28, 2008, and based upon and subject to the analyses, assumptions, qualifications and limitations set forth therein, the consideration of 0.245 of a Class B Share and cash in the amount of US$82.00 (which includes the Final Unitholder Distribution of US$3.00) per Unit to be received under the Arrangement was fair, from a financial point of view, to the Unitholders (other than Teck and its affiliates).

	•	The determination of National Bank Financial that, as of July 28, 2008, and based upon and subject to the analyses, assumptions, qualifications and limitations set forth in the Independent Valuation, the fair market value of the Units was in the range of $79.00 to $99.00 per Unit.

	•	The consideration to be received by the Unitholders under the Arrangement represented as of July 28, 2008, a premium of approximately 17% based on the weighted average trading price of Units on the TSX for the 20 trading days ended July 28, 2008 (the trading day before the Arrangement was announced).

	•	A significant portion of the consideration payable to Unitholders pursuant to the Arrangement will be paid in cash which provides some certainty of value.

	•	The assets of Fording consist of a non-operating interest in the Partnership and Fording does not have the right to take in kind the coal produced by the Partnership. Through its ownership of Units, Teck owns an approximately 19.6% interest in Fording. In addition, Teck owns a 40% interest in the Partnership, and, through an affiliate, acts as the Managing Partner of the Partnership and is responsible for managing its business and affairs, subject to certain matters that require the approval of all partners. Teck has also been granted a right of first offer over the transfer of Fording’s interest in the Partnership. In light of the foregoing, Fording’s interest in the Partnership is essentially a right to receive income from the sale of coal produced by the Partnership, and the Independent Committees have been advised by RBC that this fact has limited the pool of parties that would be interested in acquiring Fording or its assets as a number of parties that were contacted expressed a desire to acquire operating rights or direct access to the Partnership’s coal resources.

	•	The Independent Committees believe that the 0.245 of a Class B Share forming part of the per Unit consideration available to Unitholders under the Arrangement provides Unitholders with continued participation in the metallurgical coal market as well as other resources.

	•	The Class B Shares are listed on the TSX and the NYSE. Teck has a larger market capitalization than Fording and trading liquidity comparable to that of Fording. Further, upon completion of the Arrangement, Teck’s market capitalization will be larger and its liquidity enhanced.

	•	There are no material competition or other regulatory issues which are expected to arise in connection with the Arrangement so as to prevent its completion, and all required regulatory clearances and approvals are expected to be obtained.

The Independent Committees believe that the Arrangement is procedurally fair to the Unitholders for the following reasons:


	•	The Arrangement Resolution must be approved by a simple majority of the votes cast by Unitholders (excluding the votes cast by Teck and certain other parties related to or affiliated with Teck that must be excluded in accordance with applicable securities laws) present in person or represented by proxy at the Meeting, as well as by a special majority of Securityholders and also by a special majority of Unitholders, in each case, present in person or represented by proxy at the Meeting.

	•	Completion of the Arrangement will be subject to a judicial determination as to its fairness by the Court.


	•	The Independent Committees retained independent financial and legal advisors who advised the Independent Committees throughout the 14-month process noted above.

	•	The Independent Committees conducted arm’s-length negotiations with Teck over the key economic terms of the Arrangement Agreement and oversaw the negotiation of other material terms of the Arrangement Agreement and the Arrangement. After negotiations with Teck, in which the Independent Committees obtained improved financial terms, the Independent Committees concluded that the consideration offered in the Arrangement was the highest price that Fording could obtain from Teck and that, based on Teck’s unequivocal statements that the consideration offered under the Arrangement was Teck’s best and final offer, further negotiation could have caused Teck to withdraw its proposal, thereby leaving Unitholders without an opportunity to evaluate and vote on a transaction that provides a premium to the current trading price for the Units.

	•	If the Arrangement does not receive the Requisite Level of Approval or the financing condition in favour of Teck or the condition relating to Teck demonstrating to Fording that Teck has or will be able to draw sufficient funds (other than the funds resulting from the sale of its Units) to complete the Arrangement is not satisfied or waived, Teck has agreed to reimburse Fording for the expenditures incurred by Fording in connection with the Arrangement to a maximum of $10 million. Further, in the event that the Arrangement Agreement is terminated as a result of the failure of the financing condition to be satisfied or waived, Fording is not required to pay the US$400 million Break Fee to Teck.

	•	Registered Unitholders who do not vote in favour of the Arrangement will have the right to require a judicial appraisal of their Units and obtain “fair value” pursuant to the exercise of the Dissent Rights under the Arrangement.

	•	Under the Arrangement Agreement, the Trustees are able to respond, in accordance with their fiduciary duties, to unsolicited Acquisition Proposals that are or could reasonably be expected to lead to a Superior Proposal. The terms of the Arrangement Agreement, including the US$400 million Break Fee payable to Teck in certain circumstances, are reasonable and not, in the opinion of the Independent Committees, preclusive of other proposals.

	•	Teck has agreed that, if there is a Superior Proposal that would otherwise be subject to Teck’s right of first offer and Teck does not exercise its matching rights under the Arrangement Agreement, it shall, upon payment of the US$400 million Break Fee, waive the 60 day right of first offer that it currently has over the transfer of Fording’s indirect interest in the Partnership and which could otherwise significantly impede certain types of alternative transactions.

The Independent Committees also considered a number of risks and potential negative factors relating to the Arrangement including the following:


	•	The Arrangement is conditional on the Debt Financing contemplated by the Debt Commitment Letter being available to Teck as of the Transaction Confirmation Date. Such availability is subject to a number of conditions. There can be no assurance that Teck will be able to obtain the Debt Financing contemplated by the Debt Commitment Letter or, in the event that Teck is unable to obtain the Debt Financing contemplated by the Debt Commitment Letter, that it will be able to obtain alternative debt financing commitments. The Independent Committees considered the advice of RBC as to the current state of the financial markets and the advice of Osler as to the terms of the Debt Commitment Letter. The Independent Committees also considered the magnitude of Teck’s obligations in obtaining the financing contemplated by the Debt Commitment Letter, the adverse affect that the failure to satisfy the conditions and obtain the financing would have on Teck, and that Teck must reimburse Fording for its Transaction Expenses, to a maximum of $10 million, if the conditions to the Arrangement are not met due to Teck’s failure to obtain the financing.

	•	If the Arrangement is successfully completed, Fording will no longer exist as an independent public income trust and, although Unitholders, through the Class B Shares to be issued under the Arrangement, will have the opportunity to continue to participate in the metallurgical coal markets, the consummation of the Arrangement will diminish the opportunity for Unitholders (other than Teck and its affiliates) to participate in the longer term potential benefits of the business of Fording to the extent that those benefits exceed those potential benefits reflected in the consideration to be received under the Arrangement.


	•	Teck was prepared to offer the consideration available under the Arrangement only if the Arrangement was structured as an asset sale by Fording to Teck. The Independent Committees believe that the net tax efficiency of the structure to Teck has enabled Teck to make an enhanced offer to Unitholders under the Arrangement. This structure results in the distribution of taxable income to Unitholders generally equal to the payments to be made to Unitholders under the Arrangement. This distribution of income may result in a higher level of taxation than would have been the case had Teck offered to purchase the Units from Unitholders who are Canadian residents (for tax purposes) and who hold Units as capital property and from Non-Resident Unitholders. However, no such offer was available. The Independent Committees considered available information as to the composition of the Unitholders and the advice of RBC as to the likely liquidity and operation of the public markets prior to and during the Pre-Closing Period.

	•	If Fording is required to pay the US$400 million Break Fee to Teck and an alternative transaction is not concluded, Fording’s financial condition will be materially and adversely affected.

	•	If the Arrangement Agreement is terminated and the Trustees decide to seek another merger or business combination, there is no assurance that Fording will be able to find a party willing to pay greater or equivalent value compared to the consideration available to Unitholders under the Arrangement, or that the continued operation of Fording under its current business model will yield equivalent or greater value to Unitholders compared to that available under the Arrangement.

	•	The trading price of the Class B Shares may fluctuate. The Independent Committees received advice from RBC as to the likely impact of the issuance of the Class B Shares in connection with the Arrangement on the market price for such shares, and the possible effect on earnings per share, cash flow and credit characteristics of Teck as a result of its acquisition of Fording. The Independent Committees also received advice from RBC and Osler as to the scope and results of the focused confirmatory diligence investigation of Teck that was undertaken by the advisors. The Independent Committees considered the advice that was received from the advisors in that regard and further considered the characteristics of the Class B Shares.

	•	Teck’s obligations under the Arrangement are subject to certain conditions and Teck has the right to terminate the Arrangement Agreement in certain circumstances.

Recommendation of the Independent Committees

Recommendation of the Trustees and the Directors

After careful consideration by the Trustees (with the interested Trustee, being Warren Seyffert, declaring his interest and excusing himself from the determination to make such recommendation) and the Directors (with the interested Directors, being Donald Lindsay and David Thompson, declaring their interests and excusing themselves from the determination to make such recommendation), the Trustees and the Directors have unanimously concluded that the Arrangement is fair to the Unitholders (other than Teck and its affiliates) and in the best interests of Fording and have authorized the submission of the Arrangement to the Securityholders for their approval at the Meeting. The Trustees and the Directors also have determined unanimously (with interested Trustees and Directors excusing themselves from the determination to make such recommendation) to recommend to the Unitholders that they vote FOR the Arrangement Resolution. Each Trustee and Director intends to vote his or her Units and Phantom Units FOR the Arrangement Resolution.

In adopting the respective Independent Committees’ recommendations and concluding that the Arrangement is substantively and procedurally fair to the Unitholders (other than Teck and its affiliates) and that the Arrangement is in the best interests of Fording, the Trustees and the Directors considered and relied upon the same factors and considerations that the Independent Committees relied upon, as described above, and adopted the Independent Committees’ analyses in their entirety. The Trustees and the Directors also considered the fact that certain of the Trustees, Directors and executive

officers of Fording and Fording ULC may have interests that differ from those of the Unitholders. See “Special Factors-Position of the Independent Committees as to Fairness” in this Circular.

Reasons for the Arrangement from Fording’s and Fording ULC’s Perspectives

Fording and Fording ULC took the step of forming the Independent Committees in response to an expression of interest received in June 2007 from Teck to acquire from Fording its indirect 60% interest in the Partnership. The Independent Committees were given a broad mandate to consider a wide range of alternatives, including an acquisition of all of Fording’s Units by a third party, a sale of Fording’s assets, including its interest in the Partnership, a combination, reorganization or similar form of transaction, an acquisition of Teck’s 40% interest in the Partnership, or continuing with Fording’s current business model. In considering the range of options available to Fording, the Independent Committees were mindful of a number of considerations, including the outlook for the price of metallurgical coal, the developments involving Canadian taxation that would reduce the cash flow otherwise available for distributions to Unitholders and the likely implications for the trading price of the Units in such circumstances, and the fact that Fording’s assets consist of essentially a non-operating interest in the Partnership without any right to take in kind the coal produced by the Partnership.

The announcement of the Arrangement Agreement on July 29, 2008 represents the culmination of a 14-month process. See “Special Factors — Background to the Arrangement” in this Circular.

General Considerations

The above discussion of the information and factors considered by the Independent Committees, the Trustees and the Directors is not intended to be exhaustive but is believed by the Independent Committees, the Trustees and the Directors to include the material factors considered by each of the Independent Committees, the Trustees and the Directors in their respective assessment of the Arrangement. In view of the wide variety of factors considered by each of the Independent Committees, the Trustees and the Directors in connection with their respective assessment of the Arrangement, and the complexity of such matters, the Independent Committees, the Trustees and the Directors did not consider it practical, nor did any of them attempt, to quantify, rank or otherwise assign relative weights to the foregoing factors that each considered in reaching their decision. In addition, in considering the factors described above, individual members of the Independent Committees, the Trustees and the Directors may have given different weights to various factors and may have applied different analysis to each of the material factors considered by the Independent Committees, the Trustees and the Directors. Each of the Independent Committees, the Trustees and the Directors recommended the Arrangement based upon the totality of the information presented to and considered by them.

In the course of reaching their respective decisions to recommend to the Trustees and the Directors, as the case may be, that they approve the Arrangement, the Independent Committees did not consider the liquidation value of Fording’s assets because they considered Fording to be a viable going concern business. Further, the Independent Committees did not consider the net book value, which is an accounting concept, as a factor because they believed that net book value is not a material indicator of the value of Fording as a going concern but rather is indicative of historical costs. The net book value of Fording is substantially below the value of the consideration payable pursuant to the Arrangement.

Reasons for the Arrangement from the Perspective of Teck

Under SEC rules, Teck is deemed to be engaged in a “going private” transaction and may be required to express its reasons for entering into the Arrangement to unaffiliated Unitholders. Teck is making the statements included in this section solely for the purposes of complying with the requirements of these rules. Teck does not believe that it has or has had any fiduciary duty to Fording or its Unitholders, including with respect to the Arrangement.

Teck believes that the acquisition of all of the assets of Fording is an attractive investment opportunity. Although Teck believes that there will be significant opportunities associated with the acquisition, it realizes that there also are substantial risks that such opportunities may not ever be fully realized. The acquisition is consistent with Teck’s strategy of increasing its exposure to non-exchange traded commodities. Teck believes that the relative short-term predictability of revenue in a business such as the metallurgical coal business, in which prices are negotiated annually with customers, is a useful complement to Teck’s copper and zinc business, in which prices fluctuate daily based on trading activity by a broad range of participants in terminal markets for those commodities. In addition, Teck believes that as the sole owner of the Partnership, Teck will have increased flexibility over the longer term to make decisions regarding, and to effect changes in, the business of the Partnership without regard to the short-term effects of those decisions on distributable cash, which Fording must consider as an income trust. Teck believes that this flexibility will enhance the long-term prospects for the business of the Partnership. Teck also believes that over the longer term, the acquisition should result in Teck being in a stronger position to consider and act on further acquisition or expansion opportunities in the metallurgical coal business.

Teck believes that the structure of the transaction as a “going private” transaction, and in particular as an acquisition of all of the assets of Fording, is preferable to other transaction structures, including any alternative “going private” transaction involving an acquisition of all of the Units, because it is the only transaction structure that would achieve Teck’s objective of owning the entire economic interest in the Partnership through a single transaction. Because Teck will treat substantially all of the purchase price as a Canadian Development Expense for income tax purposes, which is generally deductible against income for tax purposes on a 30% declining balance basis, Teck expects that the transaction will permit it to suspend Canadian tax installment payments of approximately $40 million per month after completion of the transaction and will generate in 2009 a refund of Canadian cash taxes paid in respect of the 2005 to 2008 tax years of approximately $800 million. The structure of the transaction allows Teck to pay aggregate consideration that reflects the tax efficiency of Fording’s income trust structure, and it represents an opportunity for Unitholders to receive fair value for their Units.

Position of Teck Regarding Fairness of the Arrangement

Under SEC rules, Teck may be required to provide certain information regarding its position as to the substantive and procedural fairness of the Arrangement to unaffiliated Unitholders. Teck is making the statements included in this section solely for purposes of complying with such requirements. Teck’s view as to the fairness of the Arrangement should not be construed as a recommendation to any Unitholder as to how that Unitholder should vote on the proposal to approve the Arrangement or otherwise.

Teck attempted to negotiate the terms of a transaction that would be most favourable to it, and not the Unitholders and, accordingly, did not negotiate the Arrangement Agreement with the goal of obtaining terms that were fair to unaffiliated Unitholders. Teck did not undertake a formal evaluation of the fairness of the Arrangement, nor did it engage a financial advisor to perform any valuation analysis for the purposes of assessing the fairness of the Arrangement.

Teck believes that the Arrangement, including the consideration to be received pursuant to the Arrangement by the Unitholders, is reasonable and fair to unaffiliated Unitholders. Teck bases its belief as to the reasonableness and fairness of the Arrangement on the following factors:


	•	The formation of the Independent Committees was publicly announced in December 2007. Fording has disclosed in this Circular that the Independent Committees conducted a review process, which, among other things, involved the solicitation of alternative purchasers and the consideration of alternative transactions. According to the disclosure of Fording in this Circular, no alternative purchaser came forward with a transaction comparable to the one proposed by Teck.

	•	The terms of the Arrangement Agreement and the Plan of Arrangement were negotiated at arm’s length among (a) Teck and its advisors and (b) the Independent Committees (which are comprised exclusively of independent Trustees and Directors) and its advisors.

	•	The consideration to be received by the Unitholders under the Arrangement represented as of July 28, 2008 a premium of approximately 17% based on the volume weighted average trading price of Units on the TSX for the 20 trading days ended July 28, 2008 (the trading day before the Arrangement was announced).


	•	The structure of the transaction, which involves a purchase of all of the assets of Fording, and the tax consequences of that structure to Teck, permit Teck to pay aggregate consideration that reflects the tax efficiency of Fording’s income trust structure, which would otherwise terminate on December 31, 2010.

	•	Under the Arrangement Agreement, the Trustees are able to respond, in accordance with their fiduciary duties, to unsolicited Acquisition Proposals that are or could reasonably be expected to lead to a Superior Proposal, and Teck must in certain circumstances pay Fording’s expenses in connection with the Arrangement to a maximum of $10 million.

	•	Teck has agreed that, if there is a Superior Proposal that would otherwise be subject to Teck’s right of first offer, and Teck does not exercise its matching rights under the Arrangement Agreement, it shall, upon payment of the US$400 million Break Fee, waive the 60-day right of first offer that it currently has over the direct or indirect transfer of Fording’s interest in the Partnership that would otherwise apply to such Superior Proposal, and which could otherwise significantly impede certain types of alternative transactions.

	•	The members of the Independent Committees unanimously determined that the Arrangement is fair to the Unitholders (other than Teck and its affiliates) and in the best interests of Fording.

	•	Teck did not have any involvement in the Independent Committees’ evaluation of the Arrangement.

	•	The members of the Independent Committees unanimously approved the Arrangement and unanimously recommended that (a) the Trustees and the Directors approve the Arrangement Agreement and the Arrangement, and (b) the Trustees and the Directors recommend that the Unitholders vote for the Arrangement Resolution.

	•	The Trustees and the Directors unanimously (with the interested Trustee and Directors excusing themselves from the determination to make such recommendation) (a) determined that the terms of the Arrangement are fair to the Unitholders (other than Teck and its affiliates) and in the best interests of Fording, (b) approved and authorized Fording to enter into the Arrangement Agreement and the Arrangement, (c) authorized the submission of the Arrangement to the Securityholders for their approval at the Meeting, and (d) determined to recommend that the Unitholders vote for the Arrangement Resolution.

	•	The Arrangement Resolution must be approved by, among others, at least a simple majority of the votes cast by Unitholders (excluding the votes cast by Teck and certain other parties related to or affiliated with Teck that must be excluded in accordance with applicable securities laws) present in person or represented by proxy at the Meeting.

	•	The Independent Committees received a Fairness Opinion from RBC to the effect that, as of July 28, 2008, based upon and subject to the various considerations set forth in the opinion, including the various analyses, assumptions, qualifications and limitations set forth therein, the consideration to be received under the Arrangement was fair, from a financial point of view, to the Unitholders (other than Teck and its affiliates).

	•	The Independent Committees received the Independent Valuation from National Bank Financial to the effect that, as of July 28, 2008, and based upon and subject to the analyses, assumptions, qualifications and limitations set out in the Independent Valuation, the fair market value of the Units was in the range of $79.00 to $99.00 per Unit.

	•	Registered Unitholders will be granted Dissent Rights and may seek appraisal of the fair value of their Units if the Arrangement is completed, subject to their compliance with the dissent procedures summarized under the heading “Dissenting Registered Unitholders’ Rights” in this Circular.

	•	The Arrangement must be approved by a Final Order of the Court, based on its consideration of, among other things, the fairness of the Arrangement to the Unitholders.

	•	Other than as disclosed in this Circular, Teck is not aware of any offer made by any unaffiliated person during the past two years for a merger or consolidation of Fording, a purchase or other transfer of all or substantially all of Fording’s assets, or a purchase of Units that would enable the holder to exercise control over Fording.

Teck considered whether the aggregate consideration is reasonable and fair with reference to current and historical market prices. The current market price of the Units reflects all-time high prices for metallurgical coal. Teck believes that, as illustrated in the chart below, the proceeds of the transaction to Unitholders compare extremely favourably to historical market prices for the Units through to and including July 25, 2008.

Source: Bloomberg

Teck did not consider the net book value of Fording’s business as reflected in Fording’s financial statements to be material in any way to its determination whether the aggregate consideration is reasonable and fair to unaffiliated Unitholders because Teck believes that net book value, which is an accounting concept, is not a material indicator of the value of Fording as a going concern but rather is indicative of historical costs. The net book value of Fording is substantially below the value of the consideration payable pursuant to the Arrangement. Similarly, Teck did not consider liquidation value in determining the reasonableness and fairness of the Arrangement to unaffiliated Unitholders because Teck expects to continue to operate the business of the Partnership as a going concern.

The foregoing discussion of the information and factors considered and given weight by Teck is not intended to be exhaustive but is believed by Teck to include all material factors considered by Teck in connection with the reasonableness and fairness of the Arrangement to unaffiliated Unitholders. Teck did not find it practicable to assign, nor did it assign, relative weights to the individual factors considered in reaching its conclusion as to reasonableness and fairness. Teck believes that the foregoing factors provide a reasonable basis for its belief that the terms of the Arrangement are fair to unaffiliated Unitholders.

Certain Effects of the Arrangement

If (a) the Arrangement Resolution is passed, (b) the Final Order is obtained, (c) all other conditions to closing are satisfied or waived and (d) the Pre-Closing Period is completed, the Articles of Arrangement will be filed and the Arrangement will become effective on the Effective Date. In connection therewith, the Declaration of Trust will be amended to the extent necessary to facilitate the Arrangement as provided in the Plan of Arrangement. Fording and Teck currently expect that the Effective Date will be on or about October 30, 2008. Unitholders are cautioned that each of Teck and Fording have agreed to amend the form of Plan of Arrangement which was attached to the Arrangement Agreement as Schedule “A”, and as a result such form of Plan of Arrangement is superseded by the Plan of Arrangement attached as Appendix E to this Circular and summarized under the heading “The Arrangement-Arrangement Mechanics”. Unitholders are further cautioned that the Plan of Arrangement may be further amended in accordance with its terms.

Upon the Arrangement becoming effective, Teck will acquire all of the assets of Fording, including its interest in the Royalty and all of its direct and indirect interest in Fording LP. As a result, Teck’s direct and indirect interest in the assets of the Partnership will increase from approximately 52% (consisting of a 40% direct interest and an approximately 12% indirect interest through its ownership of approximately 19.6% of Fording) to 100%. See the Unaudited Pro Forma Consolidated Financial Statements of Teck included in this Circular as Appendix I. Accordingly, Teck and its shareholders will be the beneficiaries of any future increases in the value of the Partnership and will bear the entire risk of all losses incurred in the operation of, and all decreases in the value of, the Partnership. Unitholders will no longer have an indirect interest in Fording LP or the Partnership, and will therefore cease to benefit from, and bear any of the risks incident to, ownership of such an indirect interest, other than to the extent of their ownership of Class B Shares.

Fording is currently a reporting issuer (or its equivalent) in each of the provinces and territories of Canada. and files periodic reports with the SEC under the 1933 Act. Fording’s Units are currently registered under U.S. Securities Laws and are listed on the TSX under the symbol “FDG.UN” and on the NYSE under the symbol “FDG”. After consummation of the Arrangement, the Units will cease to be listed on the TSX and the NYSE, and trading of the Units in the public market will no longer be possible. In addition, Fording will terminate its status as a reporting issuer under Canadian Securities Laws, and Fording will deregister the Units under U.S. Securities Laws and will cease to be required to file reports with the SEC or continuous disclosure documents with Canadian Securities Administrators. Upon completion of the Arrangement, the Unit certificates which immediately prior to the Effective Time represented Units will be cancelled. As of the Effective Date, the Unit certificates will only represent the right of the Registered Unitholder to receive upon surrender the consideration payable to such holder under the Arrangement.

The sale of Fording’s assets to Teck, including the Royalty, will be a taxable event to Fording for Canadian federal income tax purposes, resulting in ordinary income to Fording which will be distributed to Unitholders at the Effective Time. See “Certain Tax Considerations for Unitholders-Certain Canadian Federal Income Tax Considerations”.

Effects on Fording if the Arrangement is Not Completed

If the Arrangement is not approved by the Securityholders or if the Arrangement is not completed for any other reason, the Unitholders will not receive any payment for their Units in connection with the Arrangement. Instead, Fording will remain an independent public income trust, the Units will continue to be listed and traded on the TSX and the NYSE and the payment of distributions in accordance with Fording’s distribution policy would recommence. If the Arrangement is not completed, it is expected that Fording’s management will operate Fording in a manner similar to that in which it is being operated today and that the Unitholders will continue to be subject to the same risks and opportunities currently facing Fording, including, among other things, the nature of the metallurgical coal industry generally, on which Fording’s business largely depends, and general industry, economic, regulatory and market conditions. See “Information Concerning Fording — Risk Factors Relating to Fording”. Accordingly, if the Arrangement is not consummated, there can be no assurance as to the effect of these risks and opportunities on the future trading price or value of the Units. The Trustees and the Directors would continue to evaluate and review, among other things, the SIFT Rules, the distribution policy and the capitalization of Fording and make such changes as are deemed appropriate. In addition, Fording could be required to pay Teck a Break Fee of US$400 million if the Arrangement Agreement is terminated in certain limited circumstances, including if the Trustees make a Change in Recommendation or Fording materially breaches its non-solicitation obligations. In certain circumstances, Teck will be required to pay Fording’s Transaction Expenses to a maximum of CDN$10 million.

Fairness Opinion

The following constitutes a summary only of the Fairness Opinion of RBC. The Fairness Opinion has been provided for the use of the Independent Committees, the Trustees and the Directors and for inclusion in this Circular. The Fairness Opinion does not address the merits of the underlying decision by Fording to engage in the Arrangement and does not constitute a recommendation to any Unitholder as to how such Unitholder should vote on the Arrangement or any matter related thereto. The following summary is qualified in its entirety by the full text of the Fairness Opinion attached as Appendix C to this Circular. Unitholders are urged to read the full text of the Fairness Opinion attached to this Circular.

Engagement of RBC by the Independent Committees

The Independent Committees initially contacted RBC in June 2007 regarding a potential advisory assignment and RBC was formally engaged by the Independent Committees to provide financial advice regarding a potential transaction and to provide the Fairness Opinion in connection with the Arrangement pursuant to an agreement (the “RBC Engagement Letter”) dated as of November 2, 2007. Under the terms of the RBC Engagement Letter, RBC has, to date, been paid retainer fees and fees related to the delivery of the Fairness Opinion amounting to $2.25 million and RBC will be paid a fee of approximately $57 million upon the closing of the Arrangement against which the $2.25 million will be credited. RBC is to be reimbursed for its reasonable out-of-pocket expenses and to be indemnified by Fording in certain circumstances.

Credentials of RBC

RBC is one of Canada’s largest investment banking firms, with operations in all facets of corporate and government finance, corporate banking, mergers and acquisitions, equity and fixed income sales and trading and investment research. RBC also has significant operations in the United States and internationally. The Fairness Opinion represents the opinion of RBC and the form and content of the Fairness Opinion have been approved for release by a committee of RBC’s directors, each of whom is experienced in merger, acquisition, divestiture and fairness opinion matters.

RBC’s Relationships with Interested Parties

RBC has not been engaged to provide any financial advisory services nor has it participated in any financing involving Fording, Teck or any of their respective associates or affiliates, within the past two years, other than the services provided under the RBC Engagement Letter and as described in this Circular. Royal Bank of Canada, the controlling shareholder of RBC, acted as administrative agent and RBC acted as lead arranger of the Fording credit facility provided for under the Fording Credit Agreement. Fording paid Royal Bank of Canada and RBC fees for their services in relation to the facility in the amount of $1.1 million in 2006, $0.6 million in 2007 and $0.3 million for the period from and including January 1, 2008 to and including July 28, 2008. An affiliate of RBC provides a US$50 million bilateral revolving credit facility to Teck Cominco Alaska Incorporated, as amended in June 2008, a $75 million bilateral revolving credit facility to Teck, as amended most recently in September 2007, and a US$3.5 million letter of credit facility to BMC Insurance Company Limited, a wholly owned subsidiary of Teck, as amended in June 2007. An affiliate of RBC participated in and acted as co-documentation agent for a US$800 million syndicated revolving credit facility for Teck, as amended most recently in February 2008. Teck paid an affiliate of RBC fees for its services in relation to the aforementioned facilities in the amount of $0.7 million in 2006, $0.4 million in 2007 and $0.2 million for the period from and including January 1, 2008 to and including August 19, 2008.

With the consent of the Independent Committees, an affiliate of RBC has participated in the syndicate of banks that has agreed to make the Facilities available to Teck in connection with the Arrangement for which an affiliate of RBC will earn fees of approximately $13 million, and an additional amount of approximately $4 million upon refinancing of the bridge loan. See “Special Factors-Background to the Arrangement” in this Circular.

No understandings, agreements or commitments exist between RBC and any of Fording, Teck or any of their respective associates or affiliates with respect to any future business dealings other than as described in this Circular or as contemplated by the RBC Engagement Letter. RBC may, in the future, in the ordinary course of its business, perform financial advisory or investment banking services for Fording, Teck or any of their respective associates or affiliates. Royal Bank of Canada, controlling shareholder of RBC, provides banking services to Fording and Teck in the normal course of business.

RBC acts as a trader and dealer, both as principal and agent, in major financial markets and, as such, may have had and may in the future have positions in the securities of Fording, Teck or any of their respective associates or affiliates and, from time to time, may have executed or may execute transactions on behalf of such companies or other clients for which it received or may receive compensation. As an investment dealer, RBC conducts research on securities and may, in the ordinary course of its business, provide research reports and investment advice to its clients on investment matters, including with respect to Fording, Teck or the Arrangement.

Fairness Opinion of RBC

In considering the fairness of the consideration under the Arrangement from a financial point of view to the Unitholders other than Teck and its affiliates, RBC principally relied upon a net asset value (“NAV”) analysis of Fording. NAV analysis incorporates the use of discounted cash flow (“DCF”) analysis to determine asset values. Adjustments are made for balance sheet items and the value of investments. These adjustments are either added or subtracted from the DCF values to arrive at NAV for an entity.

RBC also considered (a) the implied dollar per tonne of measured and indicated resources under the Arrangement compared to precedent transactions, (b) a comparison of the consideration to the recent market trading prices of the Units, and (c) a review of the process conducted by the Independent Committees, with the assistance of RBC, on behalf of Fording to solicit interest in Fording. RBC also reviewed trading multiples of publicly traded coal companies from the perspective of whether a public market value analysis might exceed NAV or precedent transaction values. RBC noted that the difference in coal type, coal quality, mine life and stage of development limits the applicability of the comparable companies. Given the foregoing and that public company values generally reflect minority discount values rather than “en bloc” values, RBC did not rely on this methodology.

RBC believes that its analyses must be considered as a whole and that selecting portions of the analyses or the factors considered by it, without considering all factors and analyses together, could create a misleading view of the process underlying the Fairness Opinion. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Any attempt to do so could lead to undue emphasis on any particular factor or analyses. The Fairness Opinion is not to be construed as a recommendation to any holder of Units as to whether to vote in favour of the Arrangement.

Fairness Opinion Conclusion

Based upon and subject to the analyses, assumptions, qualifications and limitations set forth in the Fairness Opinion (the full text of which is attached as Appendix C to this Circular), RBC was of the opinion that, as of July 28, 2008, the consideration under the Arrangement was fair, from a financial point of view, to the Unitholders (other than Teck and its affiliates).

Independent Valuation

The following constitutes a summary only of the Independent Valuation of National Bank Financial. The Independent Valuation has been provided for the use of the Independent Committees, the Trustees and the Directors and for inclusion in this Circular. The Independent Valuation does not address the merits of the underlying decision by Fording to engage in the Arrangement and does not constitute a recommendation to any Unitholder as to how such Unitholder should vote on the Arrangement or any matter related thereto. The following summary is qualified in its entirety by the full text of the Independent Valuation attached as Appendix D to this Circular. Unitholders are urged to read the full text of the Independent Valuation attached to this Circular.

Engagement of National Bank Financial by the Independent Committees

The Independent Committee of Fording initially contacted National Bank Financial on July 14, 2008 regarding a potential assignment to prepare and deliver a formal valuation and National Bank Financial was formally engaged by the Independent Committee of Fording through an agreement dated as of July 15, 2008 between the Independent Committee of Fording and National Bank Financial (the “National Bank Financial Engagement Letter”). National Bank Financial was not asked to provide, and did not provide, any type of fairness opinion in respect of the Arrangement. The terms of the National Bank Financial Engagement Letter provide for the payment by Fording of fees to National Bank Financial of $250,000 as a retainer fee upon execution of the National Bank Financial Engagement Letter, $500,000 upon delivery to

the Independent Committees of National Bank Financial’s preliminary view and $1,250,000 upon delivery to the Independent Committees of the Independent Valuation. The fees to be paid to National Bank Financial under the National Bank Financial Engagement Letter were agreed between National Bank Financial and the Independent Committee of Fording. None of the fees payable to National Bank Financial are contingent upon the conclusions reached by National Bank Financial in the Independent Valuation or on the completion of the Arrangement. In the National Bank Financial Engagement Letter, Fording has agreed to indemnify National Bank Financial in respect of certain liabilities that might arise out of its engagement and to reimburse it for its reasonable expenses.

Credentials of National Bank Financial

National Bank Financial is a leading Canadian investment dealer whose businesses include corporate finance, mergers and acquisitions, equity and fixed income sales and trading, and investment research. The Independent Valuation is the opinion of National Bank Financial and its form and content was reviewed and approved for release by a group of National Bank Financial’s managing directors, each of whom is experienced in valuation matters.

Independence of National Bank Financial

National Bank Financial has represented to the Independent Committee of Fording that it considers itself independent and qualified for the purposes of MI 61-101. Based upon the Independent Committees’ own investigation, including its assessment of information provided by National Bank Financial as to its qualifications and independence, the Independent Committees are satisfied that National Bank Financial is independent and qualified to provide the Independent Valuation.

Neither National Bank Financial nor any of its affiliates (a) is an “issuer insider”, “associated entity” or “affiliated entity” (as those terms are defined in MI 61-101) of Teck or Fording; (b) is a financial advisor to Teck in connection with the Arrangement; (c) is a manager or co-manager of a soliciting dealer group formed for purposes of the Arrangement (or will, as a member of any such group, perform services beyond the customary soliciting dealers’ functions or receive more than the per security or per security holder fees payable to other members of such group); or (d) has a material financial interest in the completion of the Arrangement.

There are no commitments, agreements or understandings involving Fording, Teck or any of their respective associated entities or affiliated entities under which National Bank Financial or any of its affiliates has a material financial interest in future business and neither National Bank Financial nor any of its affiliates is a participant in the syndicate of banks providing debt financing to Teck in connection with the Arrangement. National Bank Financial is an indirect, wholly owned subsidiary of National Bank of Canada, and National Bank Financial or its affiliates (including National Bank of Canada) may, in the future, in the ordinary course of their respective businesses, perform financial advisory or investment banking or other services to Teck, Fording or any of their respective associated or affiliated entities. Although the National Bank of Canada is a lender under the Fording Credit Agreement, National Bank Financial has confirmed to Fording that the amount of indebtedness owing to National Bank of Canada under the Fording Credit Agreement is not financially material to National Bank of Canada nor are the fees payable to National Bank of Canada in connection with the Fording Credit Agreement financially material to National Bank of Canada. In addition, the Partnership is not in financial difficulty and as a result the repayment of the Fording Credit Agreement as contemplated by the Arrangement Agreement cannot be reasonably expected to have the effect of materially enhancing National Bank of Canada’s position. The Partnership paid National Bank of Canada fees for its services in relation to this credit facility in the amount of $71,049 for National Bank of Canada’s 2006 fiscal year, $63,137 for its 2007 fiscal year and $35,164 for the current fiscal year to date.

Although the National Bank of Canada was a lender under Teck’s syndicated revolving credit facility until February of 2008, National Bank Financial has confirmed to Fording that the amount of indebtedness owing to National Bank of Canada under the syndicated revolving credit facility was not financially material to National Bank of Canada nor were the fees payable to National Bank of Canada in connection with such facility financially material to National Bank of Canada. Teck paid National Bank of Canada fees for its services in relation to the syndicated revolving credit facility in the amount of $46,038 for National Bank of Canada’s 2006 fiscal year, $34,412 for its 2007 fiscal year and $7,371 for the period from the end of the prior fiscal year to February 14, 2008.

National Bank Financial acts as a trader and dealer, both as principal and agent, in major financial markets and, as such, may have had and may in the future have positions in the securities of Fording, Teck or their respective associates or affiliates and, from time to time, may have executed or may execute transactions on behalf of such companies or other

clients for which it received or may receive compensation. As an investment dealer, National Bank Financial conducts research on securities and may, in the ordinary course of its business, provide research reports and investment advice to its clients on investment matters, including with respect to Fording, Teck or the Arrangement.

Scope of Review

In preparing the Independent Valuation, National Bank Financial reviewed certain publicly available information and financial statements and non-public information relating to Fording and the Partnership; reviewed information relating to the business, operations, financial performance and, where applicable, stock market data and research publications relating to Fording and other selected comparable companies; held discussions with senior officers of Fording and certain employees of the Partnership providing support to Fording under applicable services agreements; reviewed third party technical reports, mine plans, and relevant independent and institutional industry research reports; held discussions with legal counsel to the Independent Committees; and carried out other investigative exercises, more specifically described in the Independent Valuation.

General Assumptions and Limitations

With the Independent Committees’ approval, National Bank Financial relied upon the completeness, accuracy and fair presentation of all of the financial and other information, data, advice, opinions or representations obtained by it from public sources, Fording and the Partnership and Fording’s consultants and advisors. National Bank Financial did not meet with the auditors of Fording and assumed the accuracy and fair presentation of, and relied upon, the audited consolidated financial statements of Fording and the reports of its auditors thereon. The Independent Valuation is conditional upon such completeness, accuracy and fair presentation. Subject to the exercise of National Bank Financial’s professional judgment and except as expressly described in the Independent Valuation, National Bank Financial did not attempt to verify independently the accuracy, completeness or fair presentation of any of such data or information. Fording has represented to National Bank Financial, in certificates of three senior officers of Fording dated the date of the Independent Valuation that, among other things, the information, data and other materials provided to National Bank Financial by or on behalf of Fording (the “Fording Information”) were complete and correct at the date the Fording Information was provided to National Bank Financial and that, since the date of the Fording Information, there has been no material change, financial or otherwise, in the financial condition, assets or liabilities (contingent or otherwise), business, operations or prospects of Fording or any of its subsidiary entities (as such term is defined in MI 61-101) and no material change has occurred in the Fording Information or any part thereof which would have or which would reasonably be expected to have a material effect on the Independent Valuation.

The Independent Valuation was given as of July 28, 2008 on the basis of securities markets, economic, financial and general business conditions prevailing on that date and the condition and prospects, financial and otherwise of Fording, the Partnership and their respective subsidiaries and affiliates, as they were reflected in the Fording Information provided to National Bank Financial and as they were represented to National Bank Financial in their discussions with the management of Fording and employees of the Partnership. Although National Bank Financial reserves the right to change, modify or withdraw the Independent Valuation in the event that there is any material change in any fact or matter affecting the Independent Valuation after the date thereof, National Bank Financial has disclaimed any undertaking or obligation to advise any person of any change in any fact or matter affecting the Independent Valuation which may come or be brought to National Bank Financial’s attention after the date thereof, except as otherwise required by MI 61-101.

In the Independent Valuation, National Bank Financial stated that its analyses must be considered as a whole and that selecting portions of the analyses or the factors considered by it, without considering all factors and analyses together, could create a misleading view of the process underlying the Independent Valuation. The preparation of a valuation is a complex process and is not necessarily susceptible to partial analysis or summary description and any attempt to do so could lead to undue emphasis on any particular factor or analysis. The Independent Valuation should not be construed as a recommendation to any Securityholder as to whether to vote in favour of the Arrangement.

Definition of Fair Market Value

For purposes of the Independent Valuation, fair market value is defined as the monetary consideration that, in an open and unrestricted market, a prudent and informed buyer would pay to a prudent and informed seller, each acting at arm’s length with the other and under no compulsion to act. National Bank Financial made no downward adjustment to the

value of the Units to reflect the liquidity of the Units, the effect of the Arrangement on the Units, whether or not the Units form part of a controlling interest, or the fact that Fording does not manage or have operational control of the Partnership. Consequently, the Independent Valuation provides a conclusion on a per Unit basis with respect to Fording’s “en bloc” value being the price at which all of the Units could be sold to one or more buyers at the same time.

Valuation Methodologies

For purposes of determining the fair market value of the Units, National Bank Financial relied on three principal methodologies:


	•	a DCF approach;

	•	a comparable trading approach; and

	•	a comparable precedent transactions approach.

In addition, National Bank Financial reviewed historical trading data for Fording, bid premia from precedent transactions and research analyst target prices.

In the Independent Valuation, National Bank Financial stated that it was aware that certain potential buyers of all of the Units may realize unique benefits as a result of such a transaction. Furthermore, these benefits are not necessarily available to all buyers and the amount of any benefit may vary by buyer. As National Bank Financial’s valuation of Fording is on an “en bloc” basis, the value of these benefits, if any, cannot be attributed to the “en bloc” value of Fording and, accordingly, has not been factored into National Bank Financial’s valuation conclusion.

National Bank Financial prepared a comprehensive DCF analysis of the Partnership to assist in determining the fair market value of the Units. National Bank Financial believed that the DCF approach was the most appropriate methodology for estimating the “en bloc” value of Fording and benchmarked the results of this approach against other valuation methodologies. National Bank Financial further believed that the DCF approach is the most broadly used valuation methodology in the mining industry. The DCF approach reflects the growth prospects and risks inherent in the Partnership’s operations by taking into account the future free cash flow generating capability of its assets.

The present value of the unlevered after-tax free cash flows derived from the DCF analysis represents the aggregate value of the Partnership’s operating assets. To arrive at an equity value of Fording, and subsequently an equity value per Unit, National Bank Financial made a number of adjustments. These adjustments included, among other things, adjustments for net debt as of June 30, 2008, losses from foreign exchange contracts, adjustments for Fording’s 60% ownership of the Partnership, transaction expenses, the estimated present value of unfunded pension liabilities and the estimated present value of future asset retirement obligations.

The equity value per Unit derived from the DCF analysis was determined by National Bank Financial to be in the range of $78.71 to $99.41.

In applying the comparable companies methodology, National Bank Financial reviewed the public market trading multiples of selected coal companies including four based in Australia, three based in Canada and five based in the United States. National Bank Financial limited its universe to those companies that currently produce metallurgical coal. Development-stage coal companies or those that produce primarily steam coal were excluded. National Bank Financial found that the comparables landscape did not yield perfect comparables for Fording and, accordingly, rather than focusing on specific comparables, applied the multiples observed across the entire comparable set.

In applying this methodology, National Bank Financial considered Enterprise Value/2009E EBITDA and Enterprise Value/Measured and Indicated Resources to be the most relevant multiples. These metrics were considered appropriate for Fording given its very large resource base that is constrained by transportation capacity. A review of these multiples across the comparable set implied a per Unit valuation range of $75.19 to $98.30.

In applying the precedent transaction methodology, National Bank Financial reviewed recent transactions in the coal sector. This methodology considers transaction prices in the context of the purchase or sale of a comparable company or asset to estimate the “en bloc” value of a particular asset or company. The application of this methodology is limited by the extent to which the companies or assets acquired in the precedent transactions are comparable to Fording in terms of stage of development, cost parameters and type of coal produced. Applicability is further limited by the divergence in the prevailing spot and forecasted prices for coal at the time the precedent transactions were executed and those observed at

present. While this is generally a consideration when using this methodology, National Bank Financial stated that it was particularly relevant in this situation given the recent volatility in the spot and forecasted prices for metallurgical coal. Accordingly, National Bank Financial placed greater weight upon its analysis of more recent transactions.

In applying the precedent transaction methodology, National Bank Financial considered Enterprise Value/Measured and Indicated Resources to be the most relevant metric for the same reasons described above relating to the comparable companies methodology. A review of this metric across the list of precedent transactions implied a valuation range from $77.86 to $92.79 per Unit.

Benefits to Teck of Acquiring Fording’s Assets

In preparing the Independent Valuation, National Bank Financial considered whether any distinctive material benefit would accrue to Teck through the acquisition of all the assets and liabilities of Fording as contemplated by the Arrangement. In this regard, National Bank Financial noted that it understood that the purchase price for the Royalty would be recorded by Teck as a Canadian Development Expense (“CDE”) for Canadian income tax purposes, which is generally deductible from Canadian taxable income at an annual 30% declining balance rate. However, National Bank Financial was of the view that such benefit was available to certain other purchasers in a transaction structured in the manner of the Arrangement. The extent to which Teck or another purchaser could utilize such a CDE deduction, and realize any net benefit therefrom, would depend on the Canadian taxable income position of the particular purchaser. National Bank Financial did not have sufficient financial information or analysis from Teck to quantify such net benefits to Teck.

National Bank Financial was also of the view that there were likely no material specific operational or financial benefits (other than noted above) that would accrue to Teck that would not equally accrue to other potential buyers such as lower income tax rates, reduced operating costs, increased revenues, higher asset utilization or any other operational or financial benefits. However, National Bank Financial did not have sufficient financial information or analysis from Teck to verify this belief.

Valuation Conclusion

In arriving at an opinion of fair market value of the Units, National Bank Financial did not attribute any particular weight to any specific factor but made qualitative judgments based on its experience in rendering such opinions and on circumstances then prevailing as to the significance and relevance of each factor. National Bank Financial did, however, weight each valuation approach differently and ascribed the greatest amount of importance to the DCF approach.

Based on and subject to the factors set forth in the Independent Valuation, National Bank Financial expressed the opinion that, as of July 28, 2008, the fair market value of the Units was in the range of $79.00 to $99.00 per Unit.

Valuation of Non-Cash Consideration

National Bank Financial was not engaged to prepare a formal valuation of the Class B Shares on the basis that the conditions set out in Section 6.3(2) of MI 61-101 have been, or will be, satisfied, those conditions being that:


	•	the Class B Shares are securities of a reporting issuer;

	•	Fording has no knowledge of any material information concerning Teck, or concerning the Class B Shares, that has not been generally disclosed;

	•	a liquid market (as such term in defined for the purposes of MI 61-101) in the Class B Shares exists, which determination was verified by National Bank Financial as at July 28, 2008;

	•	the Class B Shares to be issued in connection with the Arrangement constitute 25% or less of the number of Class B Shares that are outstanding immediately before the Arrangement;

	•	the Class B Shares will be freely tradable under applicable securities laws at the time the Arrangement is completed; and

	•	National Bank Financial has advised the Independent Committees that it is of the opinion that a valuation of the Class B Shares is not required.

FURTHER DISTRIBUTIONS

If the Arrangement is completed, no further quarterly or other distributions with respect to the Units will be declared or paid to the Unitholders.

THE ARRANGEMENT

Expected Timing of Arrangement

Required Securityholder Approval

At the Meeting, Securityholders will be asked to vote to approve the Arrangement Resolution. Pursuant to the Interim Order, the Arrangement Resolution must be approved by the affirmative vote of:


	•	at least 662/3% of the votes cast at the Meeting by Unitholders present in person or represented by proxy and entitled to vote at the Meeting, voting separately as a class;

	•	at least 662/3% of the votes cast at the Meeting by Securityholders present in person or represented by proxy and entitled to vote at the Meeting, voting together as a single class; and

	•	at least a simple majority of the votes cast by Unitholders (excluding the votes cast by Teck and certain other parties related to or affiliated with Teck that must be excluded in accordance with applicable securities laws) present in person or represented by proxy and entitled to vote at the Meeting (collectively, the “Requisite Level of Approval”).

In determining whether the minority Unitholder approval described in the third bullet above has been obtained, the votes cast by Teck and certain other parties related to or affiliated with Teck must be excluded in accordance with applicable securities laws. See “Principal Legal Matters — Canadian Securities Law Matters” in this Circular. To the knowledge of Fording, after reasonable inquiry, a total of 29,510,871 votes that may be cast on the Arrangement Resolution will be excluded in determining whether minority Unitholder approval for the Arrangement Resolution has been obtained. The Arrangement Resolution must receive the Requisite Level of Approval in order for Fording to seek the Final Order and implement the Arrangement on the Effective Date in accordance with the Final Order. Notwithstanding the approval by Securityholders of the Arrangement Resolution, Fording reserves the right not to proceed with the Arrangement, subject to and in accordance with the terms of the Arrangement Agreement and the Plan of Arrangement.

Arrangement Mechanics

The following description is qualified in its entirety by reference to the full text of the Plan of Arrangement, which is attached as Appendix E to this Circular. Unitholders are cautioned that each of Teck and Fording have agreed to amend the form of Plan of Arrangement which was attached to the Arrangement Agreement as Schedule “A”, and as a result, such form of Plan of Arrangement is superseded by the Plan of Arrangement attached as Appendix E to this Circular and summarized below. Unitholders are further cautioned that the Plan of Arrangement may be further amended in accordance with its terms. The Plan of Arrangement has been amended to, among other things, clarify that Fractional Unit Interests are to be treated in the same manner as whole Units for the purposes of the Plan, including in respect of payments made to Unitholders under the Arrangement (but prorated in proportion to the Fractional Unit Interest) and the exercise of Dissent Rights, and to clarify the treatment of Exchange Options and Phantom Units. As well, the Plan of Arrangement now provides that Fording will be terminated and cease to exist as part of the Plan of Arrangement rather than in the ordinary course after completion of the Arrangement. Upon the Arrangement becoming

effective and subject to any further amendments to the Plan of Arrangement in accordance with its terms, the following transactions, among others, will occur and will be deemed to occur in the order and at the times set out in the Plan of Arrangement:


	(a)	the Unitholder Rights Plan will terminate and be of no further force or effect;

	(b)	the Fording LP Agreement Amendments will become effective;

	(c)	the Royalty Agreement Amendments will become effective;

	(d)	the New Amended and Restated Declaration of Trust will become effective;

	(e)	[intentionally deleted];

	(f)	each of the Trustees will be deemed to have resigned and the Corporate Trustee will be appointed and become the sole trustee of Fording;

	(g)	each of the Directors and each of the directors of Acquiror will be deemed to have resigned and the directors of Fording ULC and the directors of Acquiror will be those persons designated by Teck;

	(h)	immediately before the time that the transaction described in paragraph (i) below occurs, Fording LP will make a distribution to Fording in an amount equal to all debts owing by Fording to Fording LP, and will make such distribution by offset against such debts;

	(i)	Acquiror will purchase from Fording, and Fording will transfer to Acquiror, all of the limited partnership interest in Fording LP held by Fording and all of the issued and outstanding equity securities of Fording ULC held by Fording at a price equal to the amount described in paragraph (j)(vi) below, in consideration for the issuance by Acquiror to Fording of 10,000,000 common shares of Acquiror, and at the time of the purchase, Fording will cease to be a member of Fording LP;

	(j)	Fording will transfer to Teck, and Teck will purchase from Fording, the Royalty (including all rights under the Royalty Agreement, other than any amount of Royalty accrued but not paid up to the Effective Time), all of the issued and outstanding equity securities of Acquiror, and all of the issued and outstanding equity securities of the Legacy Subsidiaries held by Fording at the Effective Time, in consideration of:


	(i)	the payment by Teck to Fording of the Securityholder Consideration, plus

	(ii)	the payment by Teck to Fording of sufficient cash to enable Fording, when such additional cash is combined with its otherwise available cash, to make the Final Unitholder Distribution of US$3.00 per Unit, plus

	(iii)	the assumption by Teck of the Residual Liabilities,

which consideration will be allocated as follows:


	(iv)	an amount equal to the fair market value of the equity securities of each of the Legacy Subsidiaries will be allocated to those securities;

	(v)	97% of the remaining consideration will be allocated to the purchase of the Royalty and the rights under the Royalty Agreement from Fording; and

	(vi)	3% of the remaining consideration will be allocated to the purchase of all of the equity securities of Acquiror;

and after the purchase and transfers described in this paragraph (j) and the transfers described in paragraph (r) below, none of Fording, the Trustees, the Directors or any of their respective successors or assigns will have any rights, liabilities or obligations in connection with the Acquired Assets;


	(k)	Fording will make the Final Unitholder Distribution by distributing to each Unitholder (including Dissenting Unitholders) and to each registered holder of Phantom Units, in respect of each Unit (including Fractional Unit Interests) or Phantom Unit then held, its pro rata portion of the Final Unitholder Distribution by paying in accordance with Article 5 of the Plan of Arrangement such amount to the Unitholders (in the case of Unitholders other than Dissenting Unitholders) and holders of Phantom Units, and by paying such amount to


		the Dissenter Trustee in the case of Dissenting Unitholders, in each case, less amounts withheld in respect of the distribution pursuant to Section 5.4 of the Plan of Arrangement. The payment of the Final Unitholder Distribution to the registered holders of Phantom Units as aforesaid shall be in lieu of, and shall extinguish the right of, such holders to receive additional Phantom Units under the Joint Phantom Unit Plan in connection with the Final Unitholder Distribution;


	(l)	each holder of an issued and outstanding Exchange Option will be deemed to have exercised such holder’s Unit Appreciation Rights, as defined in the Exchange Option Plan, pursuant to the Notice of Exercise thereunder, in exchange for the payment by Fording to such registered holder, for each Exchange Option held by such holder, of an amount in cash equal to the difference between the sum of the Unit Consideration plus the Final Unitholder Distribution over the Exercise Price of such Exchange Option (less any amounts withheld pursuant to Section 5.4 of the Plan of Arrangement), and thereafter all of the Exchange Options will be terminated and none of the former holders of Exchange Options, Fording, the Trustees, the Directors, the Fording Subsidiaries, Teck, the Acquiror or any of their respective successors or assigns will have any rights, liabilities or obligations in connection with such Exchange Options. For the purpose of this paragraph (l), the cash value of the Share Consideration component of the Unit Consideration shall be calculated using the weighted average trading price per share of the Class B Shares on the NYSE over the last 10 trading days ending on the second trading day prior to the Effective Date;

	(m)	the Effective Date will be deemed to be a Mandatory Payment Date (as defined in the Joint Phantom Unit Plan) and at the Effective Time all of the then issued and outstanding Phantom Units will be deemed to have vested and each holder of Phantom Units at the Effective Time will be deemed to have elected pursuant to Section 5.4(d) of the Joint Phantom Unit Plan to redeem all Phantom Units credited to such holder’s Phantom Unit Account for an amount per Phantom Unit equal to the Unit Consideration, and Fording will pay and transfer to such holder the Unit Consideration to which such holder is entitled as a result of such deemed redemption (less any amounts withheld pursuant to Section 5.4 of the Plan of Arrangement); amounts paid by Fording in relation to Phantom Units held by Directors and issued to them in that capacity will be deemed to have been paid by Fording on behalf of Fording ULC and will be deemed to have been funded by way of a capital contribution by Fording to Acquiror and immediately thereafter, by way of a capital contribution by Acquiror to Fording ULC and thereafter all of the Phantom Units will be terminated and none of the former holders of Phantom Units, Fording, the Trustees, the Directors, the Fording Subsidiaries, Teck, the Acquiror or any of their respective successors or assigns will have any rights, liabilities or obligations in connection with such Phantom Units;

	(n)	[intentionally deleted];

	(o)	the Exchange Option Plan and the Joint Phantom Unit Plan will terminate and thereafter, none of Fording, the Trustees, the Directors, the Fording Subsidiaries, Teck, the Acquiror or any of their respective successors or assigns will have any further liability or obligation to the Securityholders under such plans or agreements and the Securityholders will have no further rights under such plans or agreements;

	(p)	Fording will distribute in respect of each issued and outstanding Unit, including Fractional Unit Interests and Units and Fractional Unit Interests held by Dissenting Unitholders, as a payment under Canadian law in respect of the capital interest in Fording represented by the Unit or Fractional Unit Interests, as applicable, and not as proceeds of disposition of that capital interest, an amount per Unit (or the prorated portion thereof in the case of Fractional Unit Interests) equal to:


	(i)	the Unit Consideration, less

the total of:


	(ii)	any amounts in respect of the Unit or Fractional Unit Interests, as applicable, withheld pursuant to Section 5.4 of the Plan of Arrangement in respect of the amounts described in paragraph (p)(i) above and paragraph (q) below, plus

	(iii)	0.001 of a Class B Share,

by paying and transferring such amount to the Unitholder (in the case of Unitholders other than Dissenting Unitholders) in accordance with Article 5 of the Plan of Arrangement and by paying and transferring such amount to the Dissenter Trustee in the case of Dissenting Unitholders;


	(q)	each issued and outstanding Unit, and if applicable, each outstanding Fractional Unit Interest (including Units and Fractional Unit Interests held by Dissenting Unitholders that have exercised their Dissent Rights) will be purchased by Fording for cancellation without any further act or formality and free and clear of all encumbrances (other than obligations in respect of Dissent Rights) in consideration of the payment by Fording in respect of each Unit or Fractional Unit Interest, as applicable, of 0.001 of a Class B Share per Unit (or the prorated portion thereof in the case of Fractional Unit Interests), which consideration shall be transferred to the Unitholder (in the case of Unitholders other than Dissenting Unitholders) in accordance with Article 5 of the Plan of Arrangement and shall be transferred to the Dissenter Trustee in the case of Dissenting Unitholders, and thereafter all such Units and Fractional Unit Interests will be cancelled, the Fording DRIP will terminate and none of the Unitholders or former Unitholders, any former beneficial owner of Units, Fording, the Trustees, the Directors, the Fording Subsidiaries, Teck, the Acquiror or any of their respective successors or assigns will have any rights, liabilities or obligations in connection with such Units and Fractional Unit Interests (other than, as applicable, the obligations in respect of Dissent Rights in Article 4 of the Plan of Arrangement and the right to receive the distributions and other amounts payable under the Plan of Arrangement in accordance with Article 5 of the Plan of Arrangement); and

	(r)	contemporaneously with the purchase of the Units pursuant to paragraph (q) above, all of the remaining assets of Fording, including the right to amounts under the Royalty accrued but not paid up to the Effective Time and any other Acquired Assets not transferred to Teck pursuant to paragraph (j) above, will be transferred by Fording to Teck with such transfer occurring as a reduction of the consideration paid by Teck in respect of the purchase of assets pursuant to paragraph (j) above and in an amount equal to the fair market value of the assets transferred under this paragraph (r), and the reduction of the consideration will be allocated proportionately between the assets described in paragraph (j)(v) and paragraph (j)(vi) above, and immediately thereon Fording shall terminate and cease to exist.

Letter of Transmittal

such Letter of Transmittal, and any additional documents as Teck or the Depositary may reasonably require, the Registered Unitholder will be entitled to receive, and Teck will cause the Depositary to deliver a cheque (or other form of immediately available funds) representing the cash component of the consideration to which the Registered Unitholder is entitled, and a certificate representing the number of Class B Shares to which the Registered Unitholder is entitled, in each case less applicable withholding taxes. The Unit certificates which immediately prior to the Effective Time represented Units will be cancelled. As of the Effective Date, the Unit certificates will only represent the right of the Registered Unitholder to receive upon surrender the consideration payable to such holder under the Arrangement. You can request additional copies of the Letter of Transmittal by contacting the Depositary. The Letter of Transmittal is also available at the website maintained by the Canadian Securities Administrators at www.sedar.com.

Registered Unitholders who choose not to dispose of their Units on the TSX and the NYSE are encouraged to complete, sign, date and return the enclosed Letter of Transmittal, together with their Unit certificate(s) at least two business days prior to the Effective Date which will assist Teck in arranging for the prompt payment in respect of their Units if the proposed Arrangement is completed.

If you are a Non-Registered Unitholder, you should carefully follow the instructions from the Intermediary that holds Units on your behalf in order to submit your Units. You should not complete the Letter of Transmittal applicable to Registered Unitholders unless specifically instructed to do so by your Intermediary.

In order for holders of Phantom Units and Exchange Options to receive any amounts to which they may be entitled, the holders of Phantom Units and Exchange Options need to read the instruction letter delivered separately by Fording and comply with the instructions set out therein and in this Circular.

Lost Certificates

A Unitholder who does not hold Units through an Intermediary and who has lost or misplaced its Unit certificates should complete the Letter of Transmittal as fully as possible and forward it, together with an affidavit regarding the loss or misplacement, to the Depositary. The Depositary will assist in making arrangements for the necessary affidavit (which will include a bonding requirement) for payment of the consideration in accordance with the Arrangement. Further details are set out in the Letter of Transmittal.

Cancellation of Rights after Six Years

Any certificate which immediately before the Effective Time represented Units and which has not been surrendered, with all other documents required by the Depositary, on or before the sixth anniversary of the Effective Date, will cease to represent any claim by or interest of any former Unitholder of any kind or nature against or in Fording, Teck or the Acquiror. Accordingly, persons who tender certificates for Units after the sixth anniversary of the Effective Date will not receive Class B Shares, will not own any interest in Teck, and will not be paid any cash or other compensation in connection with the Arrangement.

Fractional Shares

Delivery Requirements

The method of delivery of Unit certificates, the Letter of Transmittal and all other required documents is at the option and risk of the Unitholder surrendering them. Fording recommends that such documents be delivered by hand to the Depositary, at one of the offices noted in the Letter of Transmittal, and a receipt obtained therefor or, if mailed, that registered mail, with return receipt requested, be used and that proper insurance be obtained. Unitholders holding Units registered in the name of an Intermediary must contact such Intermediary to arrange for the surrender of their Unit certificates.

Payment of Consideration

In the case of Registered Unitholders, as soon as practicable after the Effective Date, assuming due delivery of the required documentation, including the applicable Unit certificates and a duly and properly completed Letter of Transmittal, Teck will cause the Depositary to forward a cheque (or other form of immediately available funds) and a certificate representing the Class B Shares to which the Registered Unitholder is entitled, in each case less applicable withholding taxes, by first class mail to the address of the Unitholder as shown on the register maintained by Computershare Investor Services Inc., unless the Unitholder indicates in the Letter of Transmittal that it wishes to pick up the cheque and the certificate representing the Class B Shares. It is anticipated that the consideration under the Arrangement will be available from the Depositary as soon as practicable, but in any event, no later than three business days following the Effective Date. Under no circumstance will interest on the consideration be paid by Fording, Teck or the Depositary by reason of any delay in paying the consideration or otherwise.

Interests of Trustees, Directors, Executive Officers and Others in the Arrangement

Other than as disclosed below, none of the Trustees, the Directors or executive officers of Fording or Fording ULC and, to the knowledge of such Trustees, Directors and executive officers after reasonable enquiry, no associate or affiliate of an insider of Fording, none of Teck or its directors and executive officers, or any of their respective associates or affiliates, no associate or affiliate of Fording, no insider of Fording (other than a Trustee, Director or executive officer of Fording or Fording ULC) and no person or company acting jointly or in concert with Fording beneficially owns, or exercises control or direction over, any of the securities of Fording.

In connection with the Arrangement, none of the Trustees, the Directors or the executive officers of Fording or Fording ULC played any role in initiating or negotiating the terms of the Arrangement (other than the members of the Independent Committees and Mr. Lindsay in his capacity as President and Chief Executive Officer of Teck). In addition, none of the Trustees, the Directors or the executive officers of Fording or Fording ULC has entered into any arrangements or understanding pursuant to which they are assured to receive increased compensation or favourable alterations to existing employment agreements. After giving effect to the Arrangement, none of the Trustees, the Directors or the executive officers of Fording or Fording ULC will own more than 1% of Teck’s outstanding voting shares and no such Trustees, Directors or executive officers (other than Messrs. Lindsay and Seyffert) will hold a seat on Teck’s board of directors.

In considering the recommendations of the Independent Committees, the Trustees and the Directors with respect to the Arrangement, Unitholders should be aware that certain of the Trustees, Directors and executive officers of Fording or Fording ULC may have interests that differ from those of the Unitholders. The Independent Committees, the Trustees and the Directors are aware of these interests and considered them along with other matters described below.

The Declaration of Trust and the Memorandum and Articles of Association of Fording ULC contain procedures to be followed by the Trustees, the Directors and officers of Fording and Fording ULC in cases of conflict of interest, in order to preserve the independence of the body considering transactions and agreements in respect of which a Trustee, Director or officer has a material interest. Generally, these provisions require Trustees, Directors and officers to disclose all actual or potential conflicts of interest and refrain from voting on matters in which the Trustee, Director or officer of Fording or Fording ULC has a conflict of interest. In addition, the Trustee or Director, as applicable, is required to excuse himself or herself from any discussion or decision on any matter in which he or she is precluded from voting as a result of a conflict of interest or which otherwise affects his or her personal, business or professional interests.

Unit Holdings

As of August 19, 2008, the Trustees, Directors, executive officers and insiders of Fording and Fording ULC (including Teck and its directors and executive officers) beneficially own, directly or indirectly, or exercise control or direction over, in the aggregate, 29,576,871 Units, which represent approximately 19.7% of the total number of outstanding Units. All Units held by the Trustees, Directors, executive officers and insiders of Fording or Fording

ULC, as applicable, will be treated identically and in the same manner under the Arrangement as Units held by any other Unitholder.

Trustees, Directors and Executive Officers

The following table sets out the names and positions of the Trustees, Directors and executive officers of Fording or Fording ULC, as applicable, and as of August 19, 2008, the number and percentage of Units beneficially owned or over which control or direction is exercised by each such Trustee, Director or executive officer of Fording or Fording ULC, as applicable and, where known after reasonable enquiry, by their respective associates or affiliates.


		Ownership or
		Control over
Name	Position	Units^(1),(2)

Michael A. Grandin	Chairman and Chief Executive Officer/Trustee and Director		39,000
Richard T. Mahler	Trustee and Director		6,000
Michael S. Parrett	Trustee and Director		6,000
Donald Pether	Trustee		—
Warren S.R. Seyffert	Trustee		—
Peter Valentine	Trustee		—
John B. Zaozirny	Trustee		12,500
Dawn L. Farrell	Director		1,000
Donald R. Lindsay	Director		—
Dr. Thomas J. O’Neil	Director		—
L.I. Prillaman	Director		—
David Thompson	Director		—
Boyd Payne	President		—
R. James Brown, C.A.	Vice President		—
James F. Jones	Vice President, Human Resources and Legal Affairs, Secretary		1,500
Mark D. Gow, C.A.	Vice President and Chief Financial Officer		—
Paul Clements, C.A.	Controller		—


(1)	The Units held by the individual Trustees and Directors and officers in each case represent less than 1% of the Units.

(2)	Does not include Units that may be held through the Trust Unit Purchase Plan.

Unit Holdings of Teck and its Directors and Executive Officers

The following table sets out the number and percentage of Units beneficially owned or over which control or direction is exercised by Teck and each of its directors and executive officers who so own or control Units and, where known after reasonable enquiry, by their respective associates or affiliates.


	Ownership or		% of the
	Control over		Outstanding
Name	Units		Units⁽¹⁾

Teck Cominco Limited		29,507,142		19.6	%
Mayank M. Ashar, Director		1,023		—
Jalynn H. Bennett, Director		1,347		—
Ronald A. Millos, Senior Vice President, Finance and Chief Financial Officer		1,359		—


(1)	The Units held by the individuals represent less than 1% of the Units.

In addition, the Trustees, Directors and executive officers of Fording or Fording ULC understand that in excess of 10% of the Units are registered in the name of CDS, as nominee, and are owned by various Intermediaries and other parties on behalf of their clients and others. The names of the beneficial owners holding their Units through CDS are not all known to Fording.

Transactions with Teck

Warren S.R. Seyffert serves on the Board of Directors of Teck and for his service, Teck paid Mr. Seyffert $82,000, $92,945 and $54,250 in 2006, 2007 and 2008, respectively. In addition, Mr. Seyffert was awarded certain deferred share units of Teck. Donald R. Lindsay does not earn any compensation in his role as a director of Teck, however, Mr. Lindsay does earn compensation in his capacity as President and Chief Executive Officer of Teck. For further information on Mr. Lindsay’s compensation in such capacity, see “Compensation of Named Executive Officers” in Teck’s Management Information Circular dated March 3, 2008.

Joint Phantom Unit Plan

Participating Trustees and Directors receive a portion of their annual retainer in the form of Phantom Units payable under the Joint Phantom Unit Plan established by Fording and Fording ULC. All or a portion of such retainer may be paid by way of a credit to the Phantom Unit account of each Trustee and Director in the form of Phantom Units awarded by reference to the Unit price by means of a bookkeeping entry on the books of Fording or Fording ULC, as applicable. When distributions are declared and paid on Units, the Phantom Unit Account of each Trustee and Director is credited with additional Phantom Units with a value equal to the distribution. The Joint Phantom Unit Plan allows for deferral of taxation on the value of the Phantom Units until the time that the Trustee or the Director actually receives settlement of the Phantom Units from the Joint Phantom Unit Plan. The Trustees and the Directors may elect to receive settlement in Units issued from treasury or cash. The market price for Phantom Units is determined by reference to the weighted average trading price of the Units on the TSX for the five trading days immediately preceding the day settlement is made.

On the Effective Date, in conjunction with the Arrangement, all of the issued and outstanding Phantom Units will be deemed to have vested and each holder of Phantom Units will be deemed to have elected to redeem all Phantom Units credited to such holder’s Phantom Unit account for an amount per Phantom Unit equal to the Unit Consideration and will be paid such consideration (less any amounts withheld on account of taxes) as a result of the deemed redemption plus the Final Unitholder Distribution.

The following table sets out the names and positions of the Trustees and Directors as of August 19, 2008, the number and percentage of Phantom Units they held and the amount of cash each such person is expected to receive if the Arrangement is completed as contemplated:


				% of the		Cash
		No. of		Outstanding		Consideration^(1),(2),(3)		Share
Name	Position	Phantom Units		Phantom Units		(US$)		Consideration^(4),(5)

Michael A. Grandin	Trustee and Director		15,091.64		9.99	$	1,237,514.48		3,697
Richard T. Mahler	Trustee and Director		20,266.09		13.42	$	1,661,819.38		4,965
Michael S. Parrett	Trustee and Director		20,211.72		13.38	$	1,657,361.04		4,951
Donald Pether	Trustee		4,499.46		2.98	$	368,955.72		1,102
Warren S.R. Seyffert	Trustee		4,499.46		2.98	$	368,955.72		1,102
Peter Valentine	Trustee		18,947.60		12.54	$	1,553,703.20		4,642
John B. Zaozirny	Trustee		16,143.51		10.69	$	1,323,767.82		3,955
Dawn L. Farrell	Director		12,216.74		8.09	$	1,001,772.68		2,993
Donald R. Lindsay	Director		8,395.73		5.56	$	688,449.86		2,056
Dr. Thomas J. O’Neil	Director		6,503.34		4.31	$	533,273.88		1,593
L.I. Prillaman	Director		5,828.03		3.86	$	477,898.46		1,427
David Thompson	Director		18,445.91		12.21	$	1,512,564.62		4,519


(1)	Rounded to the nearest cent.

(2)	Amounts do not include any cash amount that may be received for fractional share interests.


(3)	The consideration stated assumes that the Trustees and Directors will not convert their Phantom Units to Units prior to the Effective Date.

(4)	In Class B Shares.

(5)	Fractions of Class B Shares, which will be sold into the market and paid to the holder of Phantom Units, are not depicted.

Voting Intentions

The Trustees, Directors and executive officers of Fording and Fording ULC who beneficially own, directly or indirectly, or exercise control or direction over, in the aggregate: (a) 66,000 Units as at August 19, 2008, which represent less than 1% of the outstanding Units; and (b) 151,049.23 Phantom Units as at August 19, 2008, which represent approximately 100% of the Phantom Units and less than 1% of the Units and Phantom Units taken as a single class, have indicated that they each intend to vote FOR the Arrangement Resolution. In addition, Teck and its directors and executive officers, who beneficially own, directly or indirectly, or exercise control or direction over, in the aggregate 29,510,871 Units as at August 19, 2008, which represent approximately 19.7% of the outstanding Units, have each indicated that they intend to vote for the Arrangement Resolution.

Chair and Chief Executive Officer

Michael A. Grandin has served as Chair and Chief Executive Officer of each of Fording and Fording ULC since the formation of Fording in 2003 and the incorporation of Fording ULC in 2005. Pursuant to the Declaration of Trust and the memorandum of association of Fording ULC, the Chair and Chief Executive Officer of each of Fording and Fording ULC is appointed from the independent Trustees and the independent Directors, respectively. As the appointment of the Chief Executive Officer results in the incumbent being an officer of Fording and Fording ULC, the Trustee or Director appointed to the position no longer meets the technical definition of “independence” as determined by National Instrument 58-101 — Disclosure of Corporate Governance Practices of the Canadian Securities Administrators. However, the Chief Executive Officer is not an officer of the Partnership or any of its subsidiaries and is not responsible for the day-to-day management of the affairs of Fording or the business and affairs of Fording ULC, which responsibility instead rests with the President. Accordingly, the Independent Committees determined with the advice of Osler, that precluding Mr. Grandin from acting as Chair of the Independent Committees would not serve to enhance the independence of the Trustees and the Directors from management of Fording and Fording ULC and their respective subsidiaries. Moreover, the Independent Committees determined that, in light of Mr. Grandin’s knowledge, experience and expertise, excluding Mr. Grandin from participating as the Chair of the Independent Committees would negatively impact the functions of the Independent Committees.

Indemnity and Insurance Arrangements and Treatment of Fording Officers Following the Consummation of the Arrangement

For a description of the indemnification and insurance arrangements under the Arrangement Agreement, see “The Arrangement Agreement — Trustees’, Directors’, and Officers’ Indemnification”, and “The Arrangement Agreement — Further Indemnification Obligations” in this Circular.

Under the terms of certain agreements between Fording and the Partnership, the Partnership is required to make certain of its executive personnel available to serve as officers of Fording and Fording ULC. In addition to Mr. Grandin, Messrs. Payne, Brown, Gow, Jones and Clements, among others, serve as officers of Fording, Fording ULC and the Partnership. Except as otherwise described in this paragraph or under “Special Factors — Background to the Arrangement” with regard to the involvement of Mr. Payne in certain management presentations to potential bidders, none of these individuals participated in the strategic review commenced in June 2007, nor were any of them involved in any negotiations with Teck or any other party regarding the possible sale of Fording. Officers of Fording and Fording ULC, as well as employees of the Partnership, assisted, among other things, in the preparation of the Virtual Data Room to which potentially interested parties were granted access and provided information to the Independent Committees and their advisors upon request from time to time. Such officers also provided assistance in the preparation of the management presentations which were provided to such parties. In addition, and to enable Fording to negotiate the Arrangement Agreement, members of the Independent Committees and their advisors depended upon Messrs. Payne, Brown, Gow, Jones and Clements to provide information to assist in confirming the accuracy of the Fording representations, including assisting in the preparation of a disclosure letter and providing other administrative support. In the course of providing such information and administrative support, none of these officers were permitted to disclose to Teck or any of its affiliates any information regarding the status of the negotiations or the nature of the administrative support provided to the Independent Committees and their advisors. Furthermore, Fording will not be able to consummate the Arrangement

without the continued provision of administrative support by these officers. In negotiating the Arrangement Agreement, in order to secure their continued assistance, Fording sought assurances from Teck that none of these officers would suffer any adverse employment consequences in terms of the officers’ relationship with the Partnership following the Effective Date as a result of their provision of such administrative support to Fording. As a result, the Arrangement Agreement provides that for a period of 24 months following the Effective Date, Teck will cause the Managing Partner of the Partnership to provide such officers with terms and conditions of employment, including salary, bonus, benefits, perquisites, title, duties, responsibilities and location of employment, which are the same or better than those enjoyed by such officers immediately prior to the announcement of the Arrangement, other than such changes resulting directly from the completion of the Arrangement. This provision was negotiated solely by the Independent Committees and its advisors.

Sources of Funds for the Arrangement

Debt Financing

The following is a summary of certain material terms of the Debt Commitment Letter. A copy of the Debt Commitment Letter is available on SEDAR at www.sedar.com and at the SEC website at www.sec.gov. This summary and certain capitalized terms referred to in the summary do not contain all of the information about the Debt Commitment Letter. Therefore, Unitholders should read the Debt Commitment Letter carefully and in its entirety, as the rights and obligations of Teck and the Lenders are governed by the terms of the Debt Commitment Letter and not by this summary or any other information contained in this Circular.

Teck has received the Debt Commitment Letter from the Lenders pursuant to which the Lenders have committed to provide Teck an aggregate US$4 billion senior term loan facility and a US$5.81 billion senior bridge loan facility (collectively, the “Facilities”). The Facilities will be guaranteed by Teck Metals, a wholly owned subsidiary of Teck. The Facilities will be used to finance a portion of the aggregate Cash Consideration. Teck has represented to Fording that the funds contemplated to be received under the Facilities, together with the expected proceeds from the sale of Teck’s approximate 19.6% ownership interest in Fording and Teck’s cash on hand, will be sufficient to pay the aggregate Cash Consideration payable under the Arrangement and to make all other necessary payments to be made by it in connection with the Arrangement.

At Teck’s election, borrowings under each of the senior term loan facility and the senior bridge loan facility may bear interest at a rate per annum equal to (a) the highest of the rate of interest publicly announced by JPMorgan Chase Bank, N.A., Toronto Branch, as its prime rate in effect and the Federal Funds Effective Rate from time to time plus 0.5%, in each case, plus an applicable margin ranging from 0% to 1.50% or (b) the LIBO Rate, as adjusted for statutory reserve requirements for eurocurrency liabilities plus an applicable margin ranging from 1.00% to 2.50%. As used in this summary, “LIBO Rate” means the rate at which eurodollar deposits in the London interbank market for one, two, three or six months (as selected by Teck) are quoted on the Reuters BBA LIBOR Rates page 3750. Borrowings under the Facilities may be prepaid and commitments may be reduced by Teck without penalty (except LIBOR breakage costs) in minimum amounts to be agreed upon with the Lenders. There are no mandatory prepayment requirements for the senior term loan facility. The senior bridge loan facility is required to be prepaid in an amount equal to (i) 100% of the net proceeds received by Teck or any of its subsidiaries from material assets sales, subject to certain exceptions to be agreed upon with the Lenders, and (ii) 100% of the net proceeds received by Teck or any of its subsidiaries from the issuance of debt or equity after the date the conditions precedent to the senior bridge loan facility are satisfied, subject to certain exceptions. In addition, the commitments in respect of the senior bridge loan facility shall be reduced by the amount of any capital markets debt or equity issued, or the amount of proceeds of any material asset sale by Teck, prior to the date on which the loans are made. The maturity date for the senior term loan facility is three years after the date on which the loans are made. The maturity date for the senior bridge loan facility is 364 days after the date on which the loans are made.

The obligation of each of the Lenders to provide the Debt Financing on the terms outlined in the Debt Commitment Letter is subject to conditions, including the following material conditions:


	•	there not occurring or becoming known to a Lender any event, development or circumstance that has had or could reasonably be expected to have a material adverse effect on the business, operations, property or condition (financial or otherwise) of Teck, the Partnership, and their subsidiaries, taken as a whole;

	•	such Lender not becoming aware of any information or other matter (including any matter relating to financial models and underlying assumptions relating to projections) affecting Teck, the Partnership and their subsidiaries or the Arrangement or the Debt Financing that in such Lender’s judgment is inconsistent in a material and adverse manner with any such information or other matter disclosed to such Lender prior to the date of the Debt Commitment Letter or could reasonably be expected to materially impair the syndication of the Facilities;

	•	there not having occurred a material disruption of or material adverse change in conditions in the financial, banking or capital markets that, in such Lender’s judgment, could reasonably be expected to materially impair the syndication of the Facilities;

	•	such Lender’s satisfaction that prior to and during the syndication of the Facilities there shall be no competing offering, placement or arrangement of any debt securities or bank financing by or on behalf of Teck, the Partnership or any of their affiliates (other than debt securities to be issued by Teck to refinance the senior bridge loan facility or to reduce the amount required to be borrowed under the senior bridge loan facility on the date on which the conditions precedent to the Facilities are satisfied);

	•	the Arrangers having been afforded a reasonable period of time to syndicate the Facilities, which in no event will be less than 45 days from the date of commencement of syndication;

	•	the execution and delivery of the definitive financing documentation on or before September 30, 2008 and the funding of the loans under the Facilities on or before December 31, 2008;

	•	all government and third party approvals necessary in connection with the Arrangement, the financing thereof and the continuing operations of Teck and the Acquired Assets having been obtained on satisfactory terms;

	•	there not existing any action, investigation, litigation or proceeding pending or threatened in any court or before any arbitrator or governmental authority that could reasonably be expected to have a material adverse effect on Teck, the Acquired Assets, the Arrangement, the financing thereof or any of the other transactions contemplated by the Debt Commitment Letter;

	•	the accuracy of all representations and warranties in the definitive credit documentation (including, without limitation, the material adverse change and litigation representations), and there being no default or event of default in existence at the time of, or after giving effect to the making of, such extension of credit (as used in the Debt Commitment Letter, “material adverse change” means an event, development or circumstance that has had a material adverse effect on the business, properties, conditions (financial or otherwise) or operations of Teck and its subsidiaries taken as a whole, or which could reasonably be expected to have a material adverse effect on Teck’s ability to perform its obligations under the credit documentation);

	•	receipt of certain Teck financial information and certain pro forma financial information, adjusted to give effect to the Arrangement and the debt financing; and

	•	other customary conditions for financings of this type.

The foregoing conditions to the availability of financing are not exhaustive. Under the Debt Commitment Letter, the Lenders and Teck may agree on additional conditions to the availability of financing.

Notwithstanding the commitment of the Lenders evidenced by the Debt Commitment Letter, Teck may elect to pursue alternative means of financing. Pursuant to a second amended and restated base shelf prospectus dated August 11, 2008, Teck may issue up to US$6 billion of debt securities, the proceeds of which could be used by Teck to satisfy a portion of the consideration required under the Arrangement Agreement and/or to repay a portion of the Facilities. Teck’s obligation to close under the Arrangement Agreement is conditional on its receipt of written confirmation of the Lenders that the conditions precedent to the availability of the Debt Financing, subject to certain limited exceptions, have been satisfied or waived which satisfaction or waiver must occur on or before the Transaction Confirmation Date. The

documentation governing the Facilities has not been finalized and, accordingly, the actual terms thereof may differ from those described in this Circular.

Fording’s obligation to complete the transactions contemplated by the Arrangement Agreement is conditional on Teck providing the Trustees on or before October 31, 2008, with written evidence reasonably satisfactory to the Trustees that Teck has or will be able to draw, on or prior to the Effective Date, the funds (other than the funds resulting from the sale of its Units) necessary to complete the Transaction which shall include the execution of definitive credit agreements in respect to the Debt Financing contemplated by the Debt Commitment Letter.

Sale of Units

Teck intends to sell the 29,507,142 Units it currently owns prior to the Effective Date and to use the net proceeds of that sale to fund a portion of the consideration payable by it under the Arrangement.

Confidentiality Agreement

The following is a summary of certain material terms of the Confidentiality Agreement. A copy of the Confidentiality Agreement is available on SEDAR at www.sedar.com and at the SEC website at www.sec.gov. This summary and certain capitalized terms referred to in the summary do not contain all of the information about the Confidentiality Agreement. Therefore, Unitholders should read the Confidentiality Agreement carefully and in its entirety, as the rights and obligations of Fording and Teck are governed by the terms of the Confidentiality Agreement and not by this summary or any other information contained in this Circular.

Immediately prior to entering into the Arrangement Agreement, Fording and Teck entered into the Confidentiality Agreement. The Confidentiality Agreement contains confidentiality and standstill provisions which are typical for agreements of this type. The confidentiality and standstill provisions survive for a period of six months following the date of the Confidentiality Agreement, subject to certain exceptions in the case of the confidentiality provisions. Teck’s standstill covenant falls away in certain circumstances and is subject to certain exceptions.

THE ARRANGEMENT AGREEMENT

The following is a summary of certain material terms of the Arrangement Agreement, a copy of which is attached as Appendix B to this Circular. This summary and certain capitalized terms referred to in the summary do not contain all of the information about the Arrangement Agreement. Therefore, Unitholders should read the Arrangement Agreement carefully and in its entirety, as the rights and obligations of Fording and Teck are governed by the express terms of the Arrangement Agreement and not by this summary or any other information contained in this Circular.

The Arrangement Agreement contains representations and warranties made by Fording and Teck. These representations and warranties, which are set forth in the Arrangement Agreement, were made by and to the parties thereto for the purposes of the Arrangement Agreement and are subject to qualifications and limitations agreed to by the parties in connection with negotiating and entering into the Arrangement Agreement. In addition, these representations and warranties were made as of specified dates, may be subject to a contractual standard of materiality different from what may be viewed as material to Unitholders, or may have been used for the purpose of allocating risk between the parties instead of establishing such matters as facts. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this Circular, may have changed since the date of the Arrangement Agreement.

On July 29, 2008, Fording and Teck entered into the Arrangement Agreement, under which it was agreed that, subject to the terms and conditions set forth in the Arrangement Agreement, Teck will acquire all of the assets of Fording and assume all of its liabilities as part of a Plan of Arrangement under which Unitholders will receive 0.245 of a Class B Share and cash in the amount of US$82.00 (which includes the Final Unitholder Distribution of US$3.00) (less any amounts withheld on account of taxes) per Unit. The terms of the Arrangement Agreement are the result of arm’s length negotiations conducted between the Independent Committees and Teck and their respective advisors.

Conditions to the Arrangement

Mutual Conditions

The Arrangement Agreement provides that the obligations of the parties to complete the Arrangement and the other transactions contemplated by the Arrangement Agreement are subject to the fulfilment of each of the following conditions at or before the Transaction Confirmation Date or such other time as may be specified below, each of which may only be waived jointly by Fording and Teck:


	•	the Interim Order shall have been granted in form and substance satisfactory to Fording and Teck, acting reasonably, and shall not have been set aside or modified in a manner unacceptable to Fording and Teck, acting reasonably;

	•	the Arrangement Resolution shall have received the Requisite Level of Approval;

	•	the Final Order shall have been granted in form and substance satisfactory to Fording and Teck, acting reasonably, and shall not have been set aside or modified in a manner unacceptable to Fording and Teck, acting reasonably;

	•	the Articles of Arrangement shall be in form and substance consistent with the Arrangement Agreement, the Plan of Arrangement and the Final Order and shall be satisfactory to Fording and Teck, acting reasonably;

	•	the TSX shall have approved the listing of the Class B Shares to be issued in connection with the Arrangement subject only to satisfaction of customary conditions;

	•	the Class B Shares to be issued in connection with the Arrangement shall have been approved for listing on the NYSE, subject only to official notice of issuance;

	•	the Arrangement Agreement shall not have been terminated in accordance with its terms;

	•	the Closing Regulatory Approvals shall have been obtained on terms and conditions acceptable to Fording and Teck, acting reasonably, and shall not have been set aside or modified in a manner unacceptable to Fording and Teck, acting reasonably; and

	•	there shall not be in effect any applicable Law that makes the consummation of the Arrangement or any other transactions contemplated in the Arrangement Agreement which are necessary to complete the Arrangement illegal or otherwise prohibited or enjoins either Fording or Teck from consummating the Arrangement or any other transactions contemplated in the Arrangement Agreement which are necessary to complete the Arrangement.

Fording Conditions

The Arrangement Agreement provides that the obligation of Fording to complete the Arrangement and the other transactions contemplated by the Arrangement Agreement is subject to the fulfilment of the following additional conditions at or before the Transaction Confirmation Date or such other time as is specified below, each of which conditions may be waived by Fording:


	•	the representations and warranties made by Teck in the Arrangement Agreement which are qualified by the expression “material”, “Teck Material Adverse Effect” or “material and adverse” shall be true and correct as of the date of the Arrangement Agreement and as of the Transaction Confirmation Date as if made on and as of such date (except to the extent such representations and warranties expressly speak as of an earlier date, in which event such representations and warranties shall be true and correct as of such earlier date) and all other representations and warranties made by Teck in the Arrangement Agreement which are not so qualified shall be true and correct in all material respects as of the date of the Arrangement Agreement and as of the Transaction Confirmation Date as if made on such date (except to the extent that such representations and warranties expressly speak of an earlier date, in which event, such representations and warranties shall be true and correct in all material respects as of such earlier date), and Teck shall have provided to Fording a certificate of two authorized persons certifying such accuracy on the Transaction Confirmation Date;


	•	Teck shall have complied in all material respects with its covenants under the Arrangement Agreement, and Teck shall have provided to Fording a certificate of two authorized persons certifying that it has complied with such covenants;

	•	from the date of the Arrangement Agreement up to and including the Transaction Confirmation Date, there shall not have occurred or have been disclosed to the public a Teck Material Adverse Effect, and Teck shall have provided to Fording a certificate of two qualified officers to such effect on the Transaction Confirmation Date; and

	•	on or before October 31, 2008, Teck shall have provided written evidence reasonably satisfactory to the Trustees that it has or will be able to draw, on or prior to the Effective Date, the funds (other than the funds resulting from the sale of its Units) necessary to complete the Arrangement which shall include the execution of definitive credit agreements in respect of the Debt Financing contemplated by the Debt Commitment Letter.

Teck Conditions

The Arrangement Agreement provides that the obligation of Teck to complete the Arrangement and the other transactions contemplated by the Arrangement Agreement is subject to the fulfilment of the following additional conditions at or before the Transaction Confirmation Date or such other time as specified below, each of which may be waived by Teck:


	•	the representations and warranties made by Fording in the Arrangement Agreement which are qualified by the expression “material”, “material adverse change” or “material adverse effect” shall be true and correct as of the date of the Arrangement Agreement and as of the Transaction Confirmation Date as if made on such date (except to the extent that such representations and warranties expressly speak of an earlier date, in which event, such representations and warranties shall be true and correct as of such earlier date) and all other representations and warranties made by Fording in the Arrangement Agreement which are not so qualified shall be true and correct in all material respects as of the date of the Arrangement Agreement and as of the Transaction Confirmation Date as if made on such date (except to the extent that such representations and warranties expressly speak of an earlier date, in which event, such representations and warranties shall be true and correct in all material respects as of such earlier date), and Fording shall have provided to Teck a certificate of two qualified officers certifying such accuracy on the Transaction Confirmation Date;

	•	from the date of the Arrangement Agreement up to and including the Transaction Confirmation Date, there shall not have occurred or have been disclosed to the public a Fording Material Adverse Effect and Fording shall have provided to Teck a certificate of two qualified officers to such effect on the Transaction Confirmation Date;

	•	Fording shall have complied in all material respects with its covenants in the Arrangement Agreement, and Fording shall have provided to Teck a certificate of two qualified officers certifying that it has complied with such covenants;

	•	the Lenders shall have confirmed to Teck in writing that the conditions precedent to the availability of the Debt Financing, other than the condition which provides that the Chief Financial Officer of Teck shall have delivered a certificate confirming that (a) the Pre-Closing Period has been completed in accordance with the Arrangement Agreement; (b) Teck is ready to initiate the transaction implementation procedure under the Arrangement Agreement; and (c) substantially concurrently with the advance of funds, the Arrangement, the Debt Financing and the payments of fees, commissions and expenses in connection with each of the foregoing will be completed in accordance with the Arrangement Agreement and other than the payment by Teck to Fording of the transaction consideration and payment by Teck of the fees payable to the Lenders on the closing date, have been satisfied or waived in the event that Teck intends to utilize such Debt Financing in connection with the Arrangement;

	•	the Trustees shall not have made a Change in Recommendation;

	•	Dissent Rights shall not have been exercised in respect of more than 5% of the Units (on a fully-diluted basis); and

	•	Teck shall have determined in good faith that the total amount of the Residual Liabilities on the Effective Date and immediately after completion of the steps comprising the Plan of Arrangement, net of current assets of Fording and excluding the FX Hedge and Residual Liabilities that were not incurred in wilful violation of the


		Arrangement Agreement, will not exceed $475 million (if the Fording Credit Agreement will not be repaid on or prior to the Effective Date) or will not exceed $200 million (if the Fording Credit Agreement will be repaid on or prior to the Effective Date without Fording incurring liabilities to make such repayment).

Confirmation of Arrangement

Immediately following the satisfaction or waiver of the conditions described above (excluding conditions that, by their terms, cannot be satisfied until the Transaction Confirmation Date, but subject to the satisfaction or waiver, by the applicable party or parties in whose favour the condition is made, of those conditions as of the Transaction Confirmation Date), and provided that the date on which the conditions are satisfied or waived is no later than November 20, 2008, each of Fording and Teck will confirm, in writing, to each other, that all conditions in its favour have been satisfied or waived and will issue a public announcement in form and content satisfactory to each of them, acting reasonably, to that effect.

Representations and Warranties

The Arrangement Agreement contains a number of customary representations and warranties of Fording relating to, among other things, the following matters: organization, power to carry on business; capitalization; subsidiaries; authority; no breach; indebtedness; consents and approvals; no defaults; no breach of Laws; conduct of business; employment and consulting agreements; financial statements; books and records; litigation; liabilities; environmental; tax matters; employee benefits; reports; intellectual property; Sarbanes-Oxley Act and internal controls; non-arm’s length transactions; reporting issuer status; no orders; material contracts; investment company; Royalty Agreement; ownership of the Partnership; brokers; and Acquired Assets.

The Arrangement Agreement also contains a number of customary representations and warranties of Teck, relating to, among other things, the following matters: organization; authority; no breach; consents and approvals; third party consents; litigation; no breach of Laws; capitalization and listing; reports, reporting issuer status; financial statements; conduct of business; no orders; sufficient funds; security ownership; indebtedness; environmental; mineral reserves and resources; employment matters; tax matters; no defaults; Sarbanes-Oxley Act and internal controls; subsidiaries and interests; and Investment Canada Act.

Fording Covenants

General Covenants

In the Arrangement Agreement, Fording agreed to certain customary negative and affirmative covenants relating to the operation of its business between the date of the Arrangement Agreement and until the earlier of the Effective Date and the day upon which the Arrangement Agreement is terminated in accordance with its terms. These covenants include, unless expressly required by a Material Contract or applicable Laws, a covenant to continue to carry on its and each Fording Subsidiary’s business and operations in the usual and ordinary course in a manner consistent with past practice, and to use its reasonable commercial efforts to preserve intact its and each Fording Subsidiary’s business organizations and goodwill. Fording also agreed that, following the execution of the Arrangement Agreement, (a) it would not do anything that would adversely affect Fording’s status as a “mutual fund trust” for the purposes of the Tax Act or would cause the definition of a “SIFT trust” in subsection 122.1(1) of the Tax Act to apply to Fording for any taxation year ending before 2011 and (b) it would promptly suspend, and not subsequently reinstate, the distribution of Units under the Fording DRIP and suspend the grant of further Phantom Units under the Joint Phantom Unit Plan (it being acknowledged and agreed that in lieu of the grant of further Phantom Units, Fording will make cash equivalent payments in the ordinary course and in a manner consistent with past compensation practice to the Trustees and the Directors). In addition, Fording agreed to co-operate with Teck and the Partnership to take all action necessary to terminate the TUPP as at the Effective Date.

Covenants to Assist with Debt Financing

Fording agreed to use reasonable commercial efforts to provide, and to use reasonable commercial efforts to cause its trustees, directors, officers, employees, independent auditors, counsel and other representatives to provide, all such reasonable and timely cooperation in connection with the arrangement of the Debt Financing contemplated by the Debt

Commitment Letter as may be reasonably requested by Teck, the Lenders or their affiliates, including to using its reasonable commercial efforts to:


	•	participate in meetings, drafting sessions and due diligence sessions;

	•	furnish such financial and other pertinent information regarding Fording and the Fording Subsidiaries as may be reasonably requested;

	•	assist in the preparation of an offering document to be used in connection with the Debt Financing contemplated by the Debt Commitment Letter or the refinancing thereof, as well as presentation materials and materials for rating agency presentations;

	•	reasonably cooperate with the marketing and syndication efforts;

	•	obtain reasonable auditors’ reports, reasonable comfort letters and reasonable legal opinions (in each case as are customary); and

	•	provide Teck with reasonable cooperation and assist in satisfying the conditions and obligations set forth in the Debt Commitment Letter in respect of matters within the control of Fording.

Notwithstanding the foregoing, neither Fording nor any Fording Subsidiary is required to:


	•	pay any commitment, consent or other fee or incur any other liability in connection with any such financing prior to the Effective Time;

	•	take any action or do anything that would contravene any applicable Law, contravene any contract of Fording or any Fording Subsidiary that relates to borrowed money or would be capable of impairing or preventing the satisfaction of any condition described under the heading “The Arrangement Agreement — Conditions to the Arrangement — Fording Conditions”;

	•	commit to take any action that is not contingent on the consummation of the Arrangement at the Effective Time;

	•	disclose any information that would result in the disclosure of any trade secrets or similar information or violate any obligations of Fording or any other person with respect to confidentiality; or

	•	cooperate with Teck to the extent that it would unreasonably interfere with the business or operations of Fording or any of the Fording Subsidiaries.

Covenant to Repay Amounts Outstanding under the Fording Credit Agreement

Fording agreed, subject to its reasonable commercial efforts, to co-operate with Teck to take all such action as may be necessary or advisable to permit all amounts outstanding under the Fording Credit Agreement to be repaid at the Effective Time and for all related security and hedging arrangements to be fully discharged and releases related thereto to be obtained from all applicable lenders at the cost of Teck provided that Fording shall not be required to take any action, or fail to take any action inconsistent with or that otherwise affects its ability to make a payment under the Plan of Arrangement.

Covenant Regarding Distributions

Fording agreed that unless expressly contemplated by the Arrangement Agreement or expressly required by any contract, agreement or arrangement in effect on the date of the Arrangement Agreement or applicable Laws, it will not, directly or indirectly, whether by or through any Fording Subsidiary, declare, set aside or pay any dividend or other distribution payable in cash, stock, property or otherwise, other than those distributions made by Fording and the Fording Subsidiaries pursuant to and in accordance with the Plan of Arrangement.

Further Covenants

Fording agreed that, subject to the terms and conditions of the Arrangement Agreement, it will in a timely and expeditious manner take or cause to be taken all such steps and do or cause to be done all such acts and things, as are specified in the Interim Order, the Plan of Arrangement and the Final Order to be taken or done by Fording and the Fording Subsidiaries.

Fording further agreed that as soon as reasonably practicable after the date of the Arrangement Agreement, subject to the caveat noted below, to use all commercially reasonable efforts to satisfy (or cause the satisfaction of) the conditions precedent to its and Teck’s obligations under the Arrangement Agreement to the extent the same is within its or any Fording Subsidiary’s control and take, or cause to be taken, all other actions and do, or cause to be done, all other things necessary, proper or advisable under all applicable Laws to complete the Arrangement and the other elements of the Transaction as promptly as practicable, including using its commercially reasonable efforts to:


	•	obtain all Fording Regulatory Approvals;

	•	respond to any request for information made by any Governmental Entity;

	•	oppose, lift or rescind any injunction or restraining order or other order, proceeding or action challenging or affecting the Arrangement or the transactions contemplated thereby, or seeking to restrain, enjoin or prohibit the completion of the Arrangement in accordance with the terms thereof;

	•	obtain and maintain all approvals, clearances, consents, registrations, permits, authorizations and other confirmations required to be obtained from any Governmental Entity or other third party that are necessary, proper or advisable to consummate the Arrangement, including the Third Party Consents; and

	•	co-operate with Teck in connection with the performance by it of its obligations thereunder.

Teck and Fording acknowledged and agreed that, prior to the Effective Time, neither Fording nor any of the Fording Subsidiaries will be required to spend material sums of money (other than in connection with the fees and expenses in connection with the retention of their professional advisors), agree to any material restriction on their respective businesses or operations, surrender any material registration, license, permit, authorization or similar instrument, terminate or modify any material customer or supplier relationship or divest itself of any asset.

Pre-Arrangement Wind-Up of Fording LLC

Fording agreed to cause Fording LLC to be wound-up, and to the extent practicable in the circumstances, dissolved prior to the Effective Time, all in accordance with applicable Laws so as to cause all of the assets and obligations of Fording LLC, including all of the then issued and outstanding equity securities of Fording ULC, to be distributed to or assumed by Fording in connection with the wind-up.

Teck Covenants

General Covenants and Acknowledgments

Teck agreed to certain customary negative and affirmative covenants relating to the operation of its business between the date of the Arrangement Agreement and the earlier of the Effective Date and the day upon which the Arrangement Agreement is terminated in accordance with its terms, including, unless expressly required by a contract in effect on the date of the Arrangement Agreement or applicable Laws, to continue to carry on its business and operations in the usual and ordinary course in a manner consistent with past practice and use its reasonable commercial efforts to preserve intact its business organizations and goodwill.

Further Covenants

Teck agreed that, subject to the terms and conditions of the Arrangement Agreement, it will in a timely and expeditious manner take all such steps and do all such acts and things, as are specified in the Interim Order, the Plan of Arrangement and the Final Order to be taken or done by Teck.

Teck agreed that, as soon as reasonably practicable after the date of the Arrangement Agreement, it will, subject to the caveat noted below, use all commercially reasonable efforts to satisfy (or cause the satisfaction of) the conditions precedent to its obligations described under the heading “The Arrangement Agreement — Conditions to the Arrangement — Teck Conditions” to the extent the same is within its control (including voting all Units held by it or over which it or its affiliates exercises direction or control) and take, or cause to be taken, all other actions and do, or cause to be done, all other things necessary, proper or advisable under all applicable Laws to complete the Arrangement and the other elements of the Transaction as promptly as practicable, including using its commercially reasonable efforts to:


	•	obtain all Teck Regulatory Approvals;


	•	respond to any request for information made by any Governmental Entity;

	•	oppose, lift or rescind any injunction or restraining order or other order, proceeding or action challenging or affecting the Arrangement Agreement or the transactions contemplated thereby, or seeking to restrain, enjoin or prohibit the completion of the Arrangement in accordance with the terms of the Arrangement Agreement;

	•	obtain and maintain all approvals, clearances, consents, registrations, permits, authorizations and other confirmations required to be obtained from any Governmental Entity or other third party that are necessary, proper or advisable to consummate the Arrangement; and

	•	co-operate with Fording in connection with the performance by it of its obligations under the Arrangement Agreement.

Fording and Teck acknowledged and agreed that, prior to the Effective Time, neither Teck nor any of its affiliates shall be required to spend material sums of money (other than in connection with fees and expenses in connection with the retention of their professional advisors), agree to any material restriction on their respective businesses or operations, surrender any material registration, license, permit, authorization or similar instrument, terminate or modify any material customer or supplier relationship or divest itself of any material asset.

Covenant to Ensure it has Sufficient Funds

Teck agreed, subject to its commercially reasonable efforts, to take all necessary action to ensure that it has sufficient funds, in excess of those expected to be made available as part of the Debt Financing contemplated by the Debt Commitment Letter, to carry out its obligations under the Arrangement Agreement, the Arrangement and the other elements of the Transaction and to pay all related fees and expenses.

Covenant to Cause Managing Partner to Manage the Partnership in the Ordinary Course

Teck agreed to cause the Managing Partner to manage the Partnership in the ordinary course and, subject to compliance with the then current Approved Plan (as such term is defined in the EVCP Partnership Agreement), in a manner consistent with past practice, and otherwise in full compliance with the EVCP Partnership Agreement and applicable Laws.

Covenant to Provide Notice of Material Change with Respect to the Debt Financing

Teck agreed to promptly advise Fording in writing of any material change with respect to the Debt Financing contemplated by the Debt Commitment Letter. Teck further agreed to notify Fording promptly, and in any event within 24 hours, if at any time prior to the Effective Time:


	•	the Debt Commitment Letter expires or is terminated for any reason;

	•	any event occurs that, with or without notice, lapse of time or both, would individually or in the aggregate, constitute a default or breach on the part of Teck under any material term or condition of the Debt Commitment Letter or under any agreement or instrument contemplated therein or if Teck has any reason to believe that it will be unable to satisfy, on a timely basis, any term or condition of any funding arrangements contemplated by the Debt Commitment Letter required to be satisfied by it, that in each case, would reasonably be expected to impair the ability of Teck to consummate the Debt Financing contemplated by the Debt Commitment Letter; or

	•	any financing source that is a party to the Debt Commitment Letter advises Teck, whether orally or in writing, that such source either no longer intends to provide or underwrite any financing contemplated by the Debt Commitment Letter on the terms set forth in the Debt Commitment Letter or requests amendments or waivers thereto that are or could reasonably be expected to be materially adverse to the timely completion by Teck of the transactions contemplated by the Arrangement Agreement.

Covenants with Respect to the Debt Commitment Letter

In connection with the Debt Commitment Letter, Teck covenanted and agreed that:


	•	it will use its best efforts to arrange and obtain the Debt Financing contemplated by the Debt Commitment Letter as soon as reasonably practicable, but in any event prior to October 31, 2008, on the terms and conditions described in the


		Debt Commitment Letter and it will deliver to Fording correct and complete copies of executed definitive agreements and documentation promptly when available and drafts of such agreements and documentation from time to time upon the reasonable request by Fording;


	•	it will use its best efforts to satisfy, on a timely basis, in all material respects all covenants, terms, representations and warranties and conditions in the Debt Commitment Letter that are within its control;

	•	other than as specifically contemplated in the Arrangement Agreement, it will not, without the prior written consent of Fording, take any action or enter into any transaction, including any merger, acquisition, joint venture, disposition, lease, contract or debt or equity financings, that would reasonably be expected to prevent or materially impede or delay Teck in obtaining the Debt Financing contemplated by the Debt Commitment Letter or prevent, materially impede or delay its ability to complete the Arrangement;

	•	it will not amend or alter, or agree to amend or alter, the Debt Commitment Letter or any other definitive agreement or documentation related to the Debt Commitment Letter in any manner that would reasonably be expected to prevent, materially impede or delay the completion of the Arrangement without the prior written consent of Fording; and

	•	if the Debt Commitment Letter is terminated or modified in a manner materially adverse to Teck’s ability to complete the Arrangement for any reason, it will use commercially reasonable efforts to:


	•	obtain, as promptly as practicable, and, once obtained, provide Fording with a copy of, one or more new debt financing commitments in replacement of the Debt Financing and in an amount substantially similar to the amount anticipated to be available under the Debt Financing, that is not subject to any condition precedent materially less favourable from the perspective of Fording than the conditions precedent contained in the Debt Commitment Letter (provided that Teck is not required to use any efforts to obtain any commitments that are on terms materially less favourable to Teck, as determined in the reasonable judgment of Teck, than those in the Debt Commitment Letter);

	•	negotiate and enter into definitive credit, loan or other agreements and all required documentation with such third parties as may be necessary for Teck to obtain such funds on terms and conditions consistent with such new debt financing commitments, as soon as reasonably practicable but in any event prior to October 31, 2008, and deliver to Fording correct and complete copies of such executed definitive agreements and documentation promptly when available; and

	•	satisfy, on a timely basis, in all material respects, all covenants, terms, representations and warranties and conditions applicable to Teck in respect of such new debt financing commitments and all other required agreements and documentation related to such commitments.

Covenants Regarding Non-Solicitation

Covenant in Respect of Acquisition Proposals

The Arrangement Agreement provides that subject to the exceptions described under this heading and “The Arrangement Agreement — Covenants Regarding Non-Solicitation-Superior Proposal Determination”, from and after the date of the Arrangement Agreement, Fording shall not, directly or indirectly, through any officer, trustee, director, employee, representative (including any financial or other advisor) or agent of Fording or any of the Fording Subsidiaries (collectively, “Fording Representatives”):


	•	solicit, assist, initiate, encourage or otherwise in any way facilitate (including by way of furnishing information, or entering into any form of written or oral agreement, arrangement or understanding) any Acquisition Proposal or any inquiries, proposals or offers regarding any Acquisition Proposal;

	•	participate in any discussion or negotiations regarding, or furnish to any person any confidential information with respect to, any Acquisition Proposal or potential Acquisition Proposal or otherwise co-operate in any way with, or assist or participate in, facilitate or encourage, any effort or attempt by any person to make an Acquisition Proposal or potential Acquisition Proposal;

	•	make a Change in Recommendation;


	•	accept, approve, agree to, endorse, recommend, or propose publicly to accept, approve, agree to, endorse, recommend any Acquisition Proposal; or

	•	accept, approve, agree to, endorse or recommend or enter into, or publicly propose to accept, approve, agree to, endorse or recommend or enter into, any agreement in respect of an Acquisition Proposal,

provided however that, notwithstanding any provision of the Arrangement Agreement, if at any time following the date of the Arrangement Agreement and prior to obtaining the Requisite Level of Approval, Fording receives a written Acquisition Proposal that did not result from a breach of Fording’s non-solicitation covenants, that the Trustees determine in good faith, after receiving advice from their financial advisors and outside legal counsel, is or could reasonably be expected to lead to a Superior Proposal, then Fording may furnish information, including providing access to the Virtual Data Room, to the person making such Acquisition Proposal and/or enter into, participate, facilitate and maintain discussions or negotiations with, and otherwise cooperate with or assist, the person making such Acquisition Proposal (but, subject to provisions of the Arrangement Agreement described under the heading “The Arrangement Agreement-Covenants Regarding Non-Solicitation-Superior Proposal Determination”, not approve, recommend, accept or enter into any agreement (other than a confidentiality agreement as contemplated below), arrangement or understanding with respect to such Acquisition Proposal), provided that prior to entering into discussions or negotiations with any person regarding the Acquisition Proposal, Fording notifies Teck of its determination that such Acquisition Proposal is or could reasonably be expected to lead to a Superior Proposal and otherwise complies with its non-solicitation covenants, and provided that Fording shall not, and shall not allow the Fording Subsidiaries or the Fording Representatives to, disclose any non-public information to such person without having entered into a confidentiality agreement with such person (a draft copy of which confidentiality agreement shall be provided to Teck prior to its execution) containing confidentiality covenants and standstill obligations substantially similar to those set out in the Confidentiality Agreement and provided further that Fording shall promptly provide to Teck any non-public information concerning Fording or the Fording Subsidiaries or any of their assets provided to such other person that has not previously been made available to Teck.

Covenant to Cease Discussions with any Person (other than Teck)

Fording agreed to, and agreed to cause the Fording Subsidiaries and the Fording Representatives to, immediately cease and cause to be terminated any solicitation, encouragement, discussion or negotiation with any persons (other than Teck) conducted by Fording, the Fording Subsidiaries or any of the Fording Representatives prior to the date of the Arrangement Agreement with respect to any Acquisition Proposal or potential Acquisition Proposal, and, in connection with any such previous discussion or negotiation, Fording agreed to discontinue access to the Virtual Data Room (other than in connection with the Arrangement and the financing thereof), and agreed not to establish or allow access to any other data rooms, virtual or otherwise or otherwise furnish information other than as permitted above and requested, to the extent that it is entitled to do so, the return or destruction of all confidential information regarding Fording, the Fording Subsidiaries or the Partnership previously provided and to further request, to the extent it is entitled to do so, the destruction of all material including or incorporating or otherwise reflecting any confidential information regarding Fording, the Fording Subsidiaries or the Partnership. Fording agreed that it will not terminate, waive, amend or modify any provision of any existing confidentiality agreement relating to an Acquisition Proposal or potential Acquisition Proposal, or any standstill agreement to which it or any of the Fording Subsidiaries is a party. In this regard, Teck and Fording agreed that any deemed amendment or modification to any aforementioned confidentiality agreement or standstill agreement resulting from the entering into of the Arrangement Agreement or the Confidentiality Agreement without further action by Fording will not constitute an amendment or modification of such agreement.

Covenant in Respect of Notice of Acquisition Proposals

Fording agreed to promptly (and in any event within 24 hours) notify Teck (at first orally and then in writing) of any Acquisition Proposal (or any amendment) or any request for non-public information relating to Fording or any of the Fording Subsidiaries or any of their assets of which Fording or any of the Fording Representatives are or become aware, or any amendments. Fording agreed that such notice shall include a copy of any written Acquisition Proposal (and any amendment) which is received or, if no written Acquisition Proposal is received, a description of the material terms and conditions of, and the identity of the person making any inquiry, proposal, offer or request. Fording also agreed to provide such further and other details of the Acquisition Proposal or any amendment as Teck may reasonably request. Fording further agreed to keep Teck promptly and fully informed of the status, including any change to the material terms, of any

Acquisition Proposal or any amendment, and to respond promptly to all inquiries by Teck with respect to any such Acquisition Proposal, and also agreed to provide to Teck copies of all material correspondence and other written material sent or provided to Fording by any person in connection with such inquiry, proposal, offer or request, or sent or provided by Fording to any person in connection with such inquiry, proposal, offer or request.

Covenant to Reaffirm Recommendation

Fording agreed to reaffirm its recommendation of the Arrangement by press release promptly in the event that:


	•	any Acquisition Proposal which is publicly announced is determined not to be a Superior Proposal; or

	•	Fording and Teck enter into an amended Arrangement Agreement pursuant to the provisions of the Arrangement Agreement described under the heading “The Arrangement Agreement — Covenants Regarding Non-Solicitation — Right to Match” which results in any Acquisition Proposal not being a Superior Proposal.

Superior Proposal Determination

Fording agreed that it shall not accept, approve, agree to, endorse, recommend or enter into any agreement in respect of an Acquisition Proposal (a “Proposed Agreement”) (other than a confidentiality agreement in accordance with provisions of the Arrangement Agreement described under the heading “The Arrangement Agreement — Covenants Regarding Non-Solicitation — Covenant in Respect of Acquisition Proposals”) unless:


	•	the Acquisition Proposal constitutes a Superior Proposal;

	•	Fording has complied with the provisions of the Arrangement Agreement described under the heading “The Arrangement Agreement — Covenants Regarding Non-Solicitation”;

	•	Fording has provided Teck with notice in writing that there is a Superior Proposal together with all documentation comprising such Acquisition Proposal;

	•	a period of at least eight business days (the “Matching Period”) shall have elapsed from the later of the date: (a) Teck received notice of Fording’s proposed determination to accept, approve, recommend or enter into any agreement relating to such Superior Proposal (other than a confidentiality agreement in accordance with provisions of the Arrangement Agreement described under the heading “The Arrangement Agreement — Covenants Regarding Non-Solicitation — Covenant in Respect of Acquisition Proposals”); and (b) Teck received a true and complete copy of the Acquisition Proposal;

	•	if Teck proposes to amend the terms of the Arrangement Agreement in accordance with provisions of the Arrangement Agreement described under the heading “The Arrangement Agreement — Covenants Regarding Non-Solicitation — Right to Match”, the Trustees (after receiving advice from their financial advisors and outside legal counsel) shall have determined in good faith that the Acquisition Proposal continues to constitute a Superior Proposal after taking into account such amendments; and

	•	prior to entering into an agreement relating to such Superior Proposal (other than a confidentiality agreement in accordance with provisions of the Arrangement Agreement described under the heading “The Arrangement Agreement — Covenants Regarding Non-Solicitation — Covenant in Respect of Acquisition Proposals”), Fording shall have terminated the Arrangement Agreement and paid to Teck the Break Fee.

Fording agreed that the Trustees shall not, after the public announcement of an Acquisition Proposal in respect of which no Proposed Agreement has been or is proposed to be entered into (an “Announced Acquisition Proposal”) make a Change in Recommendation or accept, approve, agree to, endorse or recommend any Announced Acquisition Proposal unless:


	•	the Announced Acquisition Proposal constitutes a Superior Proposal;

	•	Fording has provided Teck with not less than eight business days prior written notice that the Trustees intend to make a Change in Recommendation;

	•	Fording has complied with the provisions of the Arrangement Agreement described under the heading “The Arrangement Agreement — Covenants Regarding Non-Solicitation” with respect thereto; and


	•	if Teck has proposed to amend the terms of the Arrangement Agreement in accordance with provisions of the Arrangement Agreement described under the heading “The Arrangement Agreement — Covenants Regarding Non-Solicitation — Right to Match”, the Trustees (after receiving advice from their financial advisors and outside legal counsel) shall have determined in good faith that the Announced Acquisition Proposal continues to constitute a Superior Proposal after taking into account such amendments.

Right to Match

Under the Arrangement Agreement, Fording agreed that, during the Matching Period, Teck shall have the opportunity, but not the obligation, to offer to amend the terms of the Arrangement Agreement and the Arrangement, and Fording agreed to co-operate with Teck with respect to any such amendment, including negotiating in good faith with Teck to enable Teck to propose such adjustments to the terms and conditions of the Arrangement Agreement and the Arrangement as Teck deems appropriate. Fording further agreed that the Trustees will review any amended offer by Teck to amend the terms of the Arrangement Agreement and the Arrangement in good faith in order to determine, after seeking the advice of their independent financial advisors and outside legal counsel, whether any such amended offer upon acceptance by Fording would result in an Acquisition Proposal ceasing to be a Superior Proposal. If the Trustees so determine, Fording agreed to enter into an amended agreement with Teck reflecting Teck’s amended proposal.

Teck Waiver of Right of First Offer

Teck agreed that if there is an Acquisition Proposal that is a Superior Proposal that would otherwise be subject to the right of first offer under the Teck Agreement or the EVCP Partnership Agreement, and Teck does not exercise its right to amend the terms of the Arrangement Agreement described under the heading “The Arrangement Agreement — Covenants Regarding Non-Solicitation — Right to Match” such that the Acquisition Proposal ceases to be a Superior Proposal, then, effective upon payment of the Break Fee, Teck will waive all rights of first offer under the Teck Agreement and the EVCP Partnership Agreement in respect of any such Acquisition Proposal.

Termination

The Arrangement Agreement may be terminated:


	•	by mutual written consent of Fording and Teck; or

	•	by either Fording or Teck, as applicable, if the conditions precedent in its favour have not been satisfied by November 20, 2008, and that failure is not the result of a breach of the Arrangement Agreement by the party proposing to terminate; or

	•	by Teck on or prior to the date on which the Requisite Level of Approval is obtained, if on or prior to the date when such Requisite Level of Approval is obtained the Trustees withdraw, amend, modify or qualify, or propose publicly to withdraw, amend, modify or qualify, in a manner adverse to Teck, their recommendation of the Arrangement (a “Change in Recommendation”) or shall have failed to reaffirm their recommendation of the Arrangement within five business days of receipt of any written request to do so by Teck; or

	•	by Teck if there is a breach of Fording’s non-solicitation obligations in any material respect; or

	•	by Teck or by Fording if the Meeting shall have been held and completed and the Requisite Level of Approval shall not have been obtained; or

	•	by Fording to enter into an agreement in respect of a Superior Proposal as provided in the Arrangement Agreement provided Fording pays the Break Fee to Teck; or

	•	by Teck if, following the Transaction Confirmation Date, Teck determines, in good faith, that (a) the total amount of the Residual Liabilities on the Effective Date and immediately after completion of the steps comprising the Plan of Arrangement, net of current assets of Fording and excluding the FX Hedge, will exceed CDN$475 million (if the Fording Credit Agreement is not repaid on or prior to the Effective Date) or CDN$200 million (if the Fording Credit Agreement is repaid on or prior to the Effective Date without incurring liabilities to make such repayment), and such excess constitutes a Fording Material Adverse Effect; or (b) that the total amount of the Residual Liabilities on the Effective Date and immediately after completion of the steps comprising the Plan of Arrangement, net of current assets of Fording and excluding the FX Hedge and any Residual Liabilities that were


		not incurred in wilful violation of the Arrangement Agreement, will exceed CDN$475 million (if the Fording Credit Agreement is not repaid on or prior to the Effective Date) or CDN$200 million (if the Fording Credit Agreement is repaid on or prior to the Effective Date without Fording incurring liabilities to make such repayment); or


	•	by Teck or by Fording if the Transaction Confirmation Date does not occur on or before November 20, 2008 or the Effective Date does not occur on or before December 30, 2008, except that such right to terminate is not available to any party whose wilful failure to fulfill any of its obligations has been the cause of, or resulted in, the failure of the Transaction Confirmation Date or the Effective Date, as applicable, not to occur by such date; or

	•	by Teck or by Fording if after the date of the Arrangement Agreement any action is taken under applicable Laws or any statute, rule, regulation or order is enacted, enforced, promulgated, issued, amended, modified or terminated by any court, department, board, regulatory authority, Governmental Entity or similar agency, domestic or foreign, entitled to exercise jurisdiction over either of Teck or Fording, or in the administration or interpretation thereof, that has become final and non-appealable and that makes illegal or otherwise directly or indirectly restrains, enjoins or prohibits the Arrangement or any other transactions contemplated by the Arrangement Agreement which are necessary to complete the Arrangement; or

	•	by Teck or by Fording if after the date of the Arrangement Agreement any action is taken under applicable Laws or any statute, rule, regulation or order is enacted, enforced, promulgated, issued, amended, modified or terminated by any court, department, board, regulatory authority, Governmental Entity or similar agency, domestic or foreign, entitled to exercise jurisdiction over either of Teck or Fording, or in the administration or interpretation thereof, or any announcement is issued or made by way of press release or otherwise by any such department, board, regulatory authority, Governmental Entity or similar agency that results in a material and adverse change in the anticipated tax treatment of the Arrangement, or any material part thereof, to Fording or Teck or any Unitholders, provided that in the case of a material and adverse change in the anticipated tax treatment to the Unitholders, only Fording may terminate the Arrangement Agreement.

Break Fee

The Arrangement Agreement provides that if the Arrangement Agreement is terminated:


	•	by Teck pursuant to the third bullet (relating to a Change in Recommendation) under the heading “The Arrangement Agreement — Termination”;

	•	by Fording pursuant to the sixth bullet (relating to entering into an agreement in respect of a Superior Proposal) under the heading “The Arrangement Agreement — Termination”;

	•	by Teck pursuant to the fourth bullet (relating to a material breach of Fording’s non — solicitation obligations) under the heading “The Arrangement Agreement — Termination”; or

	•	by Teck pursuant to the second bullet (relating to the satisfaction of conditions) or fifth bullet (relating to the failure to obtain the Requisite Level of Approval) under the heading “The Arrangement Agreement — Termination”, but only if (a) after the date of the Arrangement Agreement and prior to such termination, an Acquisition Proposal is made or publicly disclosed; and (b) within twelve months following the date of such termination of the Arrangement Agreement: (i) Fording or any of the Fording Subsidiaries enters into a contract providing for the implementation of an Acquisition Proposal (whether or not such Acquisition Proposal is the same Acquisition Proposal referred to above) and such Acquisition Proposal is consummated, whether or not amended prior to its consummation and whether such consummation is before or after the expiry of such twelve month period; or (ii) an Acquisition Proposal (whether or not such Acquisition Proposal is the same Acquisition Proposal referred to above) is consummated,

then, in consideration of the release of Teck’s rights under the Arrangement Agreement, Fording shall pay to Teck, in the case of the second bullet above, concurrently with termination of the Arrangement Agreement, in the case of first or third bullet above, within two business days following termination of the Arrangement Agreement, or in the case of fourth bullet above within two business days following the consummation of the Acquisition Proposal, the amount of US$400 million, in immediately available funds to an account designated by Teck (the “Break Fee”).

For purposes of the foregoing, the Arrangement Agreement provides that the term “Acquisition Proposal” has the meaning assigned to such term under the Arrangement Agreement, except that references to “20% or more” shall be deemed to be references to 50% or more.

Expense Reimbursement

The Arrangement Agreement provides that subject to the provisions described below or as otherwise expressly provided for in the Arrangement Agreement, all out-of-pocket third party transaction expenses incurred in connection with the Arrangement Agreement and the Arrangement, including legal fees, financial advisor fees and all disbursements by advisors, shall be paid by the party incurring such expenses, whether or not the Arrangement is consummated. However, the Arrangement Agreement provides that if the Effective Date occurs all of Fording’s Transaction Expenses shall be paid to Fording (or as it may direct) by Teck. The Arrangement Agreement further provides that no later than five business days prior to the Effective Date, Fording shall provide Teck with a list of Transaction Expenses and payment instructions.

Trustees’, Directors’ and Officers’ Indemnification

Teck agreed to ensure that the Declaration of Trust, as well as the by-laws and other charter documents of any of the Fording Subsidiaries and any entity continuing following any amalgamation, merger, plan of arrangement, consolidation or winding-up of Fording or any of the Fording Subsidiaries with or into one or more persons (a “Continuing Entity”) shall contain provisions with respect to indemnification that are no less favourable to the persons entitled to indemnification under the Declaration of Trust and the charter documents of the Fording Subsidiaries at the Effective Time, as applicable (“Fording Indemnified Persons”) as compared to those rights of indemnification in favour of Fording Indemnified Parties contained in the Declaration of Trust and in the charter documents of the Fording Subsidiaries at the Effective Time, as applicable, which provisions Teck agreed shall not be amended, repealed or otherwise modified for a period of six years from the Effective Date in any manner that would adversely affect the rights thereunder of any Fording Indemnified Persons, and, subject to applicable Law, Teck agreed to ensure that the obligations of Fording or any of the Fording Subsidiaries under any indemnification agreements between Fording or any of the Fording Subsidiaries on the one hand and any of their respective Fording Indemnified Persons on the other hand continue in place and are assumed by, if applicable, any Continuing Entity (the rights of indemnification in favour of the Fording Indemnified Persons described in this paragraph are collectively referred to as the “Charter and Contractual Indemnification Rights”).

Teck further agreed that Fording shall, prior to the Effective Time, purchase and maintain for the period from the Effective Time until six years after the Effective Time on a “trailing” (or “run-off”) basis, a prepaid, non-cancellable trustees’, directors’ and officers’ insurance policy for the benefit of all Fording Indemnified Persons, covering claims made prior to or within six years after the Effective Time, on terms and conditions which are no less advantageous than Fording’s existing trustees’ and officers’ insurance policies, and in compliance with all indemnification agreements in effect at the Effective Time and providing coverage of an amount no less than (but not materially more than) such existing policies (the “Trailing D&O Coverage”).

Further Indemnification Obligations

From and after the Effective Time, Teck agreed to indemnify and save harmless each of the Trustees, the Directors, the officers of Fording and the respective directors, officers and employees of the Fording Subsidiaries (collectively referred to as the “Fording Indemnified Parties”) from and against all Claims, whether or not arising due to third party Claims and whether or not in respect of the period preceding or following the Effective Time, which may be made or

brought against the Fording Indemnified Parties, or any of them, or which they may suffer or incur, directly or indirectly as a result of or in connection with or relating to:


	•	any non fulfillment or breach of any covenant or agreement on the part of Teck contained in the Arrangement Agreement or in any certificate or other document furnished by or on behalf of Teck pursuant to the Arrangement Agreement;

	•	any act undertaken or failed to be undertaken by any Fording Indemnified Party in their capacity as a trustee, director or officer of Fording or any Fording Subsidiary including in connection with the Arrangement;

	•	the Residual Liabilities; and

	•	any information furnished by Teck for inclusion in this Circular containing any misrepresentation or alleged misrepresentation.

In the case only of the Trustees, the Directors and the directors and officers of the Fording Subsidiaries, the indemnity described in the second bullet above is only available to such person to the extent that:


	•	such person acted with a view to the best interest of Fording or the Fording Subsidiaries, as the case may be, provided that such person shall be deemed, absent compelling evidence to the contrary, to have acted with a view to the best interests of Fording or the Fording Subsidiaries, as the case may be, and Teck shall have the burden of establishing an absence of good faith on the part of such persons, provided further that, the knowledge and/or actions or failure to act, of any other trustee, director, officer or agent of Fording, any Fording Subsidiary or any other entity, shall not be imputed to such person for the purposes of determining the right to indemnification; and

	•	in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, such person had reasonable grounds for believing their conduct was lawful.

Treatment of Fording Officers Following the Consummation of the Arrangement

The Arrangement Agreement provides that for a period of 24 months following the Effective Date, Teck will cause the Managing Partner of the Partnership to provide certain identified officers of Fording with terms and conditions of employment, including salary, bonus, benefits, perquisites, title, duties, responsibilities and location of employment, which are the same or better than those enjoyed by such officers immediately prior to the announcement of the Transaction, other than such changes resulting directly from the completion of the Transaction. This provision was negotiated solely by the Independent Committees and its advisors. See “The Arrangement Agreement — Treatment of Fording Officers Following the Consummation of the Arrangement”.

PRINCIPAL LEGAL MATTERS

Court Approval of the Arrangement and Completion of the Arrangement

Subject to the requisite approval of the Arrangement Resolution by Securityholders at the Meeting in accordance with the Interim Order, the hearing in respect of the Final Order is currently scheduled to take place on September 30, 2008, at 1:15 p.m. (Calgary Time) in the Court at Calgary Courts Centre, 601-5th Street S.W., Calgary, Alberta, T2P 5P7. Any Unitholder and any other interested party who wishes to appear, or to be represented, and to present evidence or arguments must file and serve on Fording (c/o Osler, Hoskin & Harcourt LLP at Suite 2500, TransCanada Tower, 450-1st Street, S.W., Calgary Alberta T2P 5H1 (Attention: Tristram Mallet)) a notice of intention to appear (a “Notice of Intention to Appear”), together with a copy of any evidence or material which is to be presented to the Court at the hearing of the application for the Final Order, on or before 4:30 p.m. (Calgary time) on [ • ], 2008, as set out in the Interim Order, a copy of which is attached as Appendix F to this Circular, and satisfy any other requirements of the Court. The Court will consider, among other things, the procedural and substantive fairness of the Arrangement to the parties affected, including the Unitholders. The Court may approve the Arrangement in any manner the Court may direct, subject to compliance with any terms and conditions, if any, as the Court deems fit. In the event that the hearing is postponed, adjourned or rescheduled then, subject to further order of the Court, only

those persons having previously served a Notice of Intention to Appear in compliance with the Petition and the Interim Order will be given notice of the postponement, adjournment or rescheduled date. A copy of the Petition for the Final Order is attached as Appendix G to this Circular. The Final Order, if granted, will constitute the basis for the Section 3(a)(10) exemption from the registration requirements of the 1933 Act with respect to the Class B Shares to be issued in connection with the Arrangement. Prior to the application for the hearing of the Final Order, the Court will be advised that the Class B Shares will be issued in reliance on the Section 3(a)(10) exemption.

Principal Regulatory Matters

The Arrangement is conditional upon Competition Act Approval, HSR Approval as well as those approvals identified on Schedule “B” to the Arrangement Agreement, which counsel to Fording and Teck reasonably agree are legally required to complete the Arrangement. As of the date of this Circular, these additional approvals are as follows:


	•	European Commission filing and approval;

	•	Canada Transportation Act filing and approval;

	•	KFTC filing and approval; and

	•	Turkish Competition Board filing and approval.

General Matters

Fording and Teck believe that it is unlikely that one or more of the Governmental Entities with which the above-noted filings are to be or have been made will seek any regulatory concessions as conditions for granting approval of the Arrangement. Fording and Teck do not expect any material competition or other regulatory issues to arise in connection with the Arrangement to prevent its completion, and expect that all required regulatory clearances and approvals will be obtained during the first phase of review conducted by the relevant Governmental Entities. However, Fording or Teck may not obtain all of the regulatory approvals necessary to complete the Arrangement. Further, it is also possible that the above-noted approvals can only be obtained on a basis that results in the imposition of conditions on completion of the Arrangement or requires changes to the terms of the Arrangement, in either case, on terms and conditions that are not acceptable to Fording or Teck. Any such conditions or changes could result in conditions to the Arrangement not being satisfied. See “The Arrangement Agreement — Conditions to the Arrangement”.

HSR Act

Under the HSR Act, the Transaction may not be completed until the required HSR notifications have been filed with the Antitrust Division of the U.S. Department of Justice (“DOJ”) and the U.S. Federal Trade Commission (“FTC”), and the required waiting period has expired or been terminated. The initial waiting period is 30 calendar days after both parties have filed the required notification forms. This period may be shortened if the reviewing agency grants “early termination” of the initial waiting period. Alternatively, it may be lengthened if the reviewing agency determines that an in-depth investigation is required and issues to the parties formal requests for additional information and documentary material (referred to as “Second Requests”). In that case, the waiting period will expire 30 calendar days after both parties have substantially complied with the Second Requests, absent a decision by the reviewing agency to challenge the transaction. If either 30-day waiting period expires on a Saturday, Sunday or U.S. legal holiday, then the period is extended to the end of the next day that is not a Saturday, Sunday or U.S. legal holiday. On August 15, 2008 and August 18, 2008, Teck and Fording, respectively, filed their Notification and Report Forms under the HSR Act with the DOJ and the FTC and requested early termination of the waiting period.

Competition Act

Under the Competition Act, the acquisition of trust units of an entity that carries on an operating business in Canada is considered to be an acquisition of an interest in a combination that carries on an operating business in Canada and may require pre-merger notification if certain size of parties and size of transaction thresholds are exceeded (a “Notifiable Transaction”). Where a transaction constitutes a Notifiable Transaction, certain information must be provided to the Commissioner and the transaction may not be completed until the expiry, termination or waiver of a statutory waiting period. Notification may be made either on the basis of a short-form filing (in respect of which there is a 14-day statutory waiting period) or a long-form filing (in respect of which there is a 42-day statutory waiting period). If a short-form filing is made, the Commissioner may, within the 14-day waiting period, require that the parties make a long-form filing, thereby extending the waiting period for a further 42 days following receipt of the long-form filing.

Where a transaction does not raise substantive issues under the Competition Act, the Commissioner may issue an Advance Ruling Certificate (“ARC”) in respect of the transaction. Where an ARC is issued, the parties to the transaction are not required to a file a short-form or a long form pre-merger notification. In addition, if the transaction to which the ARC relates is substantially completed within one year after the ARC is issued, the Commissioner cannot seek an order of the Competition Tribunal under the merger provisions of the Competition Act in respect of the transaction solely on the basis of information that is the same or substantially the same as the information on the basis of which the ARC was issued.

The Commissioner’s review of a transaction may take longer than the statutory waiting period, depending upon a number of factors, including whether a transaction is classified by the Commissioner as non-complex, complex or very complex. Under the Competition Act, the Commissioner may decide to seek an interim order in the Competition Tribunal to prevent or delay closing. The Commissioner may also challenge a transaction by filing an application in the Competition Tribunal pursuant to section 92 of the Competition Act to seek a remedial order that could prevent closing if she proves that the transaction is likely to prevent or lessen competition substantially.

The Transaction is a Notifiable Transaction under the Competition Act, and as such, Fording and Teck must comply with the merger notification provisions of the statute. To do so, on August 12, 2008 Teck requested the issuance of an ARC and a waiver of the obligation to submit a pre-merger notification. Completion of the Transaction is, among other things, subject to the condition that the Commissioner shall have (a) issued an ARC under Section 102 of the Competition Act in connection with the Transaction or (b) the applicable waiting period under the Competition Act shall have expired or shall have been terminated or the obligation to make a pre-closing merger filing shall have been waived by the Commissioner and the Commissioner shall have advised Teck in writing that she is of the view that grounds do not exist to file an application pursuant to the merger provisions of the Competition Act in connection with the Transaction.

European Commission

The EC Merger Regulation imposes a pre-merger notification requirement on all transactions that qualify as concentrations and meet one of two specified financial thresholds, namely: (a)(i) the combined worldwide turnover of all ”undertakings concerned”, being the parties to the transaction, exceeds EUR5 billion and (ii) the European Community (“Community”)-wide turnover of each of at least two of the undertakings concerned exceeds EUR250 million, unless each of the undertakings concerned generates more than two thirds of its Community-wide turnover within the same Community member state or (b)(i) the combined worldwide turnover of all undertakings concerned exceeds EUR2.5 billion, (ii) the combined turnover of all undertakings concerned exceeds EUR100 million in each of at least three Community member states, (iii) each of at least two undertakings concerned generates more than EUR25 million turnover in each of at least three of the Community member states identified in step (ii), and (iv) each of at least two undertakings concerned generates more than EUR100 million turnover within the Community, unless each of the undertakings concerned generates more than two-thirds of its Community-wide turnover within the same Community member state.

A transaction that meets either one of the thresholds described in the prior paragraph requires that a notification be made to the European Commission (“EC”) before it is implemented and cannot normally be implemented until it has been cleared by the EC. Where the EC Merger Regulation applies, subject to limited exceptions, the EC has exclusive merger control jurisdiction over the transaction within the European Union.

Likewise, where the EC Merger Regulation applies, subject to limited exceptions, the states that are signatories to the European Economic Area (“EEA”) Agreement (Iceland, Liechtenstein and Norway (the “EFTA States”)), are not

entitled to review the transaction under their respective domestic merger control rules. In certain circumstances where the transaction has effects within the EFTA States, the EC will exchange information and consult with the EFTA Surveillance Authority, a body established under the EEA Agreement.

Following notification, by means of a “Form CO”, the EC has 25 working days in which to undertake its initial review of the transaction (generally known as a “phase I investigation”); that period may be increased to 35 working days if an EC member state’s competition authority requests jurisdiction over the transaction or the parties offer commitments to resolve any competition concerns. If, following its initial review, the EC has “serious doubts” as to whether the transaction threatens to “significantly impede effective competition” in the Community, it will initiate formal proceedings (generally known as a “phase II investigation”). Such proceedings last up to: (a) 90 working days from initiation of a phase II investigation, (b) 105 working days from initiation of a phase II investigation, if the parties offer commitments on or after the 55th working day following initiation of a phase II investigation, (c) within 110 working days from initiation of a phase II investigation, if (i) at any time during the phase II investigation, the EC agrees an extension of time with the parties, or (ii) the parties request an extension within the first 15 days from initiation of proceedings, or (d) 125 working days from initiation of a phase II investigation if the parties offer commitments on or after the 55th working day following initiation of a phase II investigation and (i) at any time during the phase II investigation, the EC agrees to an extension of time with the parties or (ii) the parties request an extension of time within 15 days from initiation of a phase II investigation.

The time periods noted above may be extended where the EC has to request information by decision or to order an on-site inspection, owing to circumstances for which one of the parties involved in the transaction is responsible, for example, in failing to respond to a simple request for information by the stated deadline. If, following a phase II investigation, the EC concludes that the transaction is likely to impede significantly effective competition in the Community, unless suitable remedies are offered by the parties, it will be blocked. Such decisions are appealable to the European Court of First Instance.

The Transaction satisfies the first jurisdictional threshold of the EC Merger Regulation (the conditions in (a) of the first paragraph under this heading). Accordingly, completion of the Transaction is conditional upon the Transaction having been cleared (or deemed cleared) by the EC.

On August 14, 2008, Fording and Teck filed a Form CO with the EC in respect of the Transaction pursuant to the EC Merger Regulation. Completion of the Transaction is conditional upon the Transaction being cleared (or deemed cleared) by the EC.

Canada Transportation Act

The parties to a proposed transaction involving a “transportation undertaking” which is a Notifiable Transaction under the Competition Act are required by the Canada Transportation Act (the “CTA”) to give notice of the transaction to the Minister of Transportation (the “Minister”) no later than the date on which notification to the Commissioner under the Competition Act is made or required. The Partnership owns a 46% interest in Neptune Bulk Terminals (Canada) Ltd. (“Neptune Terminals”), which owns and operates a multi-product bulk handling port facility located in North Vancouver, British Columbia. It is possible that the acquisition of a further 60% interest in the Partnership pursuant to the Arrangement, which would indirectly increase Teck’s interest in Neptune Terminals could be considered as involving the acquisition of a “transportation undertaking” and the Transaction would therefore be subject to notification under the CTA.

Where a transaction is subject to notification under the CTA, the Minister is required to assess whether the transaction will raise any issues with respect to the public interest as it relates to national transportation. If the Minister concludes that a proposed transaction does not raise any issues, the Minister is required to notify the parties accordingly within 42 days of receipt of a notification. In these circumstances, the proposed transaction is not subject to further review under the CTA and can be completed. If, however, the Minister is of the opinion that the proposed transaction does raise public interest issues, the Minister may direct the Canadian Transportation Agency (the “Agency”) or another person to examine them, and the proposed transaction may not be completed until it is approved by the Governor in Council.

Within 150 days of being directed to examine a proposed transaction (or any longer period that the Minister may allow), the Agency or other person is required to report to the Minister. The Commissioner is required to report to the

Minister and the parties on any concerns she may have regarding a “potential prevention or lessening of competition” within this same period.

Following receipt of the Commissioner’s report, but before making a recommendation to the Governor in Council as to whether a proposed transaction should be approved, the Minister is required to consult with the Commissioner regarding any overlap between their concerns, and to request that the parties address these concerns and any concerns of the Minister. After conferring with the Minister and the Commissioner, the parties are required to inform them of any measures they are prepared to undertake to address their concerns, and they may at that time propose modifications to the proposed transaction. Prior to making a recommendation to the Governor in Council as to whether a proposed transaction should be approved, the Minister is required to obtain the Commissioner’s assessment as to the adequacy of any undertakings or modifications to the proposed transaction proposed by the parties. If the Governor in Council is satisfied that it is in the “public interest” to approve a proposed transaction, taking into account any undertakings or modifications by the parties, on the recommendation of the Minister, the Governor in Council may approve a proposed transaction and specify any terms and conditions which are considered appropriate. Completion of the Transaction is conditional upon the Transaction being cleared by the Minister giving notice of his opinion that the Transaction does not raise issues with respect to the public interest or the Governor in Council approving the Transaction.

On August 12, 2008, the parties notified the Minister of the Transaction.

Korea Fair Trade Commission

A pre-merger notification with the Korea Fair Trade Commission (“KFTC”) is required to be made in relation to the proposed Transaction. The KFTC must be notified of the Transaction within 30 days of execution of the Arrangement Agreement and the Transaction may not be completed until KFTC clearance is obtained. The KFTC must issue a decision on whether to grant clearance within 30 days of its receipt of a complete notification. The KFTC may, in its discretion, extend the 30-day review period for up to an additional 90 days. A KFTC request for additional information from the parties suspends the running of the review period until the information is provided. The KFTC must grant clearance to transactions of which it is notified unless it finds that they substantially restrain competition in a given area of trade in Korea. The parties plan to file their notification with the KFTC during the week of August 18, 2008.

Turkish Competition Board

The Turkish Competition Board (“Turkish Competition Board”) must be notified of the Transaction and the Transaction may not be completed until it is approved by such regulatory authority. There are no statutory deadlines for filing, but in practice filings are made at least 30 days prior to the closing. The Turkish Competition Board must clear a transaction of which it is notified unless the board finds that the transaction creates or strengthens a dominant position and significantly impedes effective competition in a relevant product market within all or part of Turkey. If the Turkish Competition Board requires additional information or decides to initiate a final investigation, it has to inform the parties within 15 days following the notification. The Turkish Competition Board notifies the parties of its decision or extends its review within 30 days following a complete filing. If no notification to the parties is issued by the Turkish Competition Board within 30 days, the transaction is deemed approved. Conversely, if the Turkish Competition Board decides that an investigation is necessary, it may extend the review into a Stage II investigation, which takes approximately six months. The parties plan to file their notification with the Turkish Competition Board during the week of August 18, 2008.

Canadian Securities Law Matters

Multilateral Instrument 61-101

Fording is a reporting issuer (or its equivalent) in all provinces and territories of Canada and accordingly is subject to the applicable securities laws of such provinces and territories that have adopted MI 61-101, including Ontario and Quebec. MI 61-101 is intended to regulate certain transactions to ensure equality of treatment among securityholders, generally requiring enhanced disclosure, approval by a majority of securityholders excluding interested or related parties, independent valuations and, in certain instances, approval and oversight of the transaction by a special committee of independent trustees.

The Arrangement constitutes a “business combination” for the purposes of MI 61-101 and, as a result, Fording is required to obtain a formal valuation prepared by an independent valuator of the Units and to provide the Unitholders with

a summary of such valuation. The Independent Valuation prepared by National Bank Financial satisfies this requirement. See “Special Factors — Independent Valuation” and see Appendix D for a copy of the Independent Valuation. Pursuant to subsection 6.3(2) of MI 61-101, a formal valuation of the Class B Shares is not required.

MI 61-101 also requires that in addition to any other required securityholder approval, the Arrangement must also be approved by a simple majority of the votes cast by “minority” holders of each class of affected securities, voting separately as a class. In relation to the Arrangement and for purposes of this Circular, the “Minority Unitholders” of Fording are all Unitholders other than:


	•	Teck and any other interested party to the Arrangement within the meaning of MI 61-101;

	•	any other related party of Teck, including its directors and senior officers, or of an interested party within the meaning of MI 61-101, subject to the exceptions set out therein; and

	•	any person that is a joint actor with any of the foregoing for the purposes of MI 61-101.

To the knowledge of Fording, after reasonable inquiry, a total of 29,510,871 votes that may be cast on the Arrangement Resolution will be excluded in determining whether minority Unitholder approval for the Arrangement Resolution has been obtained. See “The Arrangement — Interests of Trustees, Directors, Executive Officers and Others in the Arrangement — Unit Holdings — Unit Holdings of Teck and its Directors and Executive Officers” in this Circular.

Judicial Developments

Prior to the adoption of MI 61-101 and its predecessors, Canadian courts had, in few instances, granted preliminary injunctions to prohibit transactions that constituted business combinations within the meaning of MI 61-101. The trend both in legislation, including the ABCA, and in Canadian judicial decisions has been towards permitting going private transactions and business combinations to proceed subject to compliance with requirements designed to ensure procedural and substantive fairness to the minority securityholders. Unitholders should consult their legal advisors for a determination of their legal rights.

Other Canadian Securities Law Considerations

The issuance of Class B Shares in connection with the Arrangement will be exempt from the prospectus and registration requirements of applicable Canadian Securities Laws. The first trade by Unitholders of the Class B Shares received pursuant to the Arrangement will be free from restrictions on resale provided that:


	•	Teck is and has been a reporting issuer in a jurisdiction of Canada for the four months immediately preceding the trade;

	•	such trade is not a control distribution;

	•	no unusual effort is made to prepare the market or to create a demand for Class B Shares;

	•	no extraordinary commission or consideration is paid to a person or company in respect of such trade; and

	•	if the selling security holder is an insider or officer of Teck, the selling security holder has no reasonable grounds to believe that Teck is in default of securities legislation.

Toronto Stock Exchange and New York Stock Exchange Approval

Teck is a reporting issuer (or its equivalent) in all of the provinces and territories of Canada and files periodic reports with the SEC under the 1934 Act. The Class B Shares are listed on the TSX and the NYSE. It is a condition of the Arrangement that the Class B Shares to be issued pursuant to the Arrangement shall have been approved for listing on the TSX and the NYSE prior to issuance subject to satisfaction of customary closing conditions and official notice of issuance, respectively.

Application has been made to the TSX and the NYSE for approval of the listing of the Class B Shares to be issued pursuant to the Arrangement.

Stock Exchange De-Listing and Reporting Issuer Status

Fording is currently a reporting issuer (or its equivalent) in each of the provinces and territories of Canada and files periodic reports with the SEC under the 1933 Act. Fording’s Units are currently registered under U.S. Securities Laws and are listed on the TSX under the symbol “FDG.UN” and on the NYSE under the symbol “FDG”. After consummation of the Arrangement, the Units will cease to be listed on the TSX and the NYSE, and trading of the Units in the public market will no longer be possible. In addition, Fording will terminate its status as a reporting issuer under Canadian Securities Laws, and Fording will deregister the Units under U.S. Securities Laws and will cease to be required to file reports with the SEC or continuous disclosure documents with Canadian Securities Administrators. Upon completion of the Arrangement, the Unit certificates which immediately prior to the Effective Time represented Units will be cancelled. As of the Effective Date, the Unit certificates will only represent the right of the Registered Unitholder to receive upon surrender the consideration payable to such holder under the Arrangement.

United States Securities Laws Considerations

Exemption from the Registration Requirements of the 1933 Act

The Class B Shares to be issued pursuant to the Arrangement will not be registered under the 1933 Act or the securities laws of any state of the United States in reliance on Section 3(a)(10) of the 1933 Act and exemptions provided under the securities laws of each state of the United States in which U.S. Unitholders reside. Section 3(a)(10) of the 1933 Act exempts from registration the offer and sale of a security which is issued in exchange for outstanding securities where the terms and conditions of such issue and exchange are approved, after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange have the right to appear, by a court or governmental authority expressly authorized by law to grant such approval. The Final Order, if granted, will constitute the basis for the Section 3(a)(10) exemption from the registration requirements of the 1933 Act with respect to the Class B Shares issued in connection with the Arrangement. Prior to the hearing of the Final Order, the Court will be advised that the Class B Shares will be issued in reliance on the Section 3(a)(10) exemption.

Resales of Class B Shares after the Completion of the Arrangement

Class B Shares received by a Unitholder who will be an “affiliate” of Teck after the Arrangement will be subject to certain restrictions on resale imposed by the 1933 Act. As defined in Rule 144 under the 1933 Act, an “affiliate” of an issuer is a person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the issuer. Typically, persons who are executive officers, directors or 10% or greater shareholders of an issuer are considered to be its “affiliates”.

Unitholders who are not affiliates of Teck, and have not been affiliates of Teck within 90 days of the date of the Arrangement, may resell Class B Shares issued to them upon closing of the Arrangement in the United States without restriction under the 1933 Act.

Unitholders who are affiliates of Teck after the Arrangement may not resell their Class B Shares that they receive in connection with the Arrangement in the absence of registration under the 1933 Act, unless an exemption from registration is available, such as the exemptions contained in Rule 144 or Regulation S under the 1933 Act.

Rule 144

In general, under Rule 144, Unitholders that are affiliates of Teck after the Arrangement will be entitled to resell in the United States, during any three-month period, that number of Class B Shares they receive pursuant to the Arrangement that does not exceed the greater of one percent of the then outstanding securities of such class and the average weekly trading volume of such securities on the NYSE during the four weeks preceding the date of sale, subject to certain restrictions contained in Rule 144 under the 1933 Act as to manner of sale, notice requirements, aggregation rules and the availability of certain public information about Teck. Unitholders who are affiliates of Teck after the Arrangement will continue to be subject to resale restrictions described in this paragraph for so long as they continue to be affiliates of Teck.

Regulation S

A Unitholder who is not an affiliate, or who is an affiliate solely by virtue of being an officer or director, of Teck after completion of the Arrangement may resell his or her Class B Shares outside the United States in “offshore transactions”

(which would include a sale through the TSX) provided (a) neither the Unitholder, an affiliate nor any person acting on their behalf engages in “directed selling efforts” in the United States, and (b) in the case of an officer or director of Teck, no selling concession, fee or other remuneration is paid in connection with such offer or sale other than the usual and customary broker’s commission that would be received by a person executing such transaction as agent. Under Regulation S, “directed selling efforts” are defined as “any activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for any of the securities being offered” in the resale transaction. Additional restrictions would apply to sales of Class B Shares pursuant to Regulation S under the 1933 Act by a Unitholder who will be an affiliate of Teck other than by virtue of his or her status as an officer or director of Teck.

INFORMATION CONCERNING FORDING

Formation

Fording is an open-ended mutual fund trust governed by the Declaration of Trust and the laws of the Province of Alberta. Fording’s head office is located at Suite 1000, 205-9th Avenue SE, Calgary, Alberta T2G 0R3.

Business Overview

Fording does not carry on any active business. Fording holds the Royalty granted to it by Fording LP and directly and indirectly owns all of the interests of Fording LP, which holds a 60% interest in the Partnership. Fording uses the cash it receives from its investments to make quarterly distributions to its Unitholders. The principal asset of Fording is the Royalty, which effectively derives its value from Fording LP’s 60% interest in the Partnership. The officers of Fording ULC are comprised of Michael Grandin, Chairman and Chief Executive Officer, Boyd Payne, President, R. James Brown, Vice President, James F. Jones, Vice President, Human Resources and Legal Affairs, Mark D. Gow, Vice President and Chief Financial Officer and Paul Clements, Controller. For further information regarding Fording’s officers, see “Governance-Officers of the Trust” in Fording’s Annual Information Form filed March 17, 2008.

Fording is not a trust company and it is not registered under any trust and loan company legislation, as it does not carry on or intend to carry on the business of a trust company. Fording was formed in 2003 in connection with a plan of arrangement. As part of that arrangement, the metallurgical coal mining operations and assets formerly owned by the public company predecessor to Fording, Teck, Luscar Ltd. and CONSOL Energy Inc. were contributed to the Partnership.

Prior to August 24, 2005, Fording held all of the shares and subordinated notes of its operating subsidiary company, Fording Inc. Effective August 24, 2005, Fording reorganized its structure by way of a plan of arrangement under which substantially all of the assets of its operating subsidiary were transferred to a new entity, Fording LP, and to Fording. This arrangement created a flow-through structure, whereby Fording directly and indirectly owned all of the partnership interests of Fording LP, which holds the partnership interests in the Partnership previously held by Fording’s former operating subsidiary.

Effective January 1, 2007, Fording reorganized into a royalty trust. As a royalty trust, current provisions of the Tax Act do not limit the level of foreign ownership of the Units.

Fording is a flow-through structure and under the Tax Act taxable income of Fording may be distributed to the Unitholders without being taxed at the Fording level. Fording does pay mineral taxes and Crown royalties to the provinces of British Columbia and Alberta.

On October 31, 2006, the Minister of Finance (Canada) announced a “Tax Fairness Plan” which, in part, proposed changes to the manner in which certain flow-through entities and the distributions from such entities are taxed. Bill C-52, Budget Implementation Act, 2007, which received Royal Assent on June 22, 2007, contained the SIFT Rules, which are designed to implement these proposals. Under the SIFT Rules, Fording, as a publicly traded income trust, is considered a SIFT and will be subject to trust level taxation as of January 1, 2011 at a rate comparable to the combined federal and provincial corporate tax rate on certain types of income. In addition, the taxable distributions received by Unitholders will be treated as taxable dividends from a taxable Canadian corporation for Canadian federal income tax purposes. The elimination of the tax efficiencies described in the foregoing paragraph may have a material and adverse impact on the trading price and value of the Units.

The Partnership produces and distributes metallurgical coal from six mines located in British Columbia and Alberta, Canada. The Partnership is a general partnership between Fording LP and affiliates of Teck. An affiliate of Teck is the managing partner of the Partnership and is responsible for managing its business and affairs, subject to certain matters that require the agreement of all partners of the Partnership.

Teck Cominco Coal Partnership and the Quintette Coal Partnership are the Teck affiliates that are partners of the Partnership. Teck Cominco Coal Partnership is the Managing Partner and Teck is the managing partner of Teck Cominco Coal Partnership.

The Partnership has an interest in six active mining operations. The Fording River, Coal Mountain, Line Creek, Elkview and Greenhills operations are located in the Elk Valley region of southeast British Columbia. The Cardinal River operation is located in west-central Alberta. The Fording River, Coal Mountain, Line Creek and Cardinal River operations are wholly owned. The Greenhills operation is a joint venture in which the Partnership has an 80% interest. Effective August 1, 2005, the Elkview operation was contributed to the Elkview Mine Limited Partnership in which the Partnership holds, directly and indirectly, a 95% general partnership interest.

All of the Partnership’s mines are open-pit, truck and shovel mining operations and are designed to operate year-round, 24 hours per day, seven days per week. However, the operating schedules can be varied depending on coal market conditions and shutdowns for maintenance activities. All of the mines are serviced by two-lane all weather roads. The Partnership’s reserves, facilities and overburden dumps are all proximate to its mine locations. The Partnership also owns numerous coal resources in British Columbia as well as a 46% interest in Neptune Terminals, a bulk facility located in North Vancouver, British Columbia.

For more information on the business operations of Fording, see “Description of the Business” in Fording’s Annual Information Form filed March 17, 2008.

Fording ULC

Fording ULC is an unlimited liability company existing under the Companies Act (Nova Scotia). The head office of Fording ULC is located at Suite 1000, Fording Place, 205-9th Avenue S.E., Calgary, Alberta, T2G 0R3. The officers of Fording ULC are comprised of Michael Grandin, Chairman and Chief Executive Officer, Boyd Payne, President, R. James Brown, Vice President, James F. Jones, Vice President, Human Resources and Legal Affairs, Mark D. Gow, Vice President and Chief Financial Officer, and Paul Clements, Controller, each of whom is also an officer of Fording.

The Unitholders are effectively entitled to elect the Directors of Fording ULC in that the Declaration of Trust requires the Trustees to cause the common shares in the capital of Fording ULC held by Fording to be voted in favour of the nominees to the board of directors of Fording ULC approved by more than 50% of the votes cast at a meeting of Unitholders called for such purpose, subject to provisions intended to maintain the independence of the Directors and rights of Teck to nominate a director in certain circumstances.

Like many Canadian public income trusts, when Fording was initially established, it was determined to be desirable to have a group of Trustees that, among other things, supervised the investments of Fording as well as another body that supervised the business underlying Fording’s investments. In the current structure, this second supervisory body is Fording ULC, which acts as general partner of Fording LP, the entity that holds directly Fording’s 60% in the Partnership. In this regard, the rights associated with Fording’s interest in the Partnership are exercised by the Directors of Fording ULC which also monitors the Partnership’s performance and reports and makes recommendations to the Trustees in that regard.

At the time when the Independent Committees were initially formed, the scope of the strategic review was broad and involved among other things an examination of internal growth prospects as well as the potential acquisition by Fording of Teck’s interest in the Partnership. The independent Trustees also considered that in light of the knowledge, experience and expertise of each of the independent Directors, the Trustees and ultimately the Unitholders would benefit from the involvement of the independent Directors.

Since the Directors are indirectly elected by the Unitholders, both of the Independent Committees determined that it was appropriate for the Independent Committee of Directors also to make a recommendation to Unitholders as to the fairness of the Arrangement, whether or not the Arrangement was in the best interests of Fording, how to vote on the Arrangement Resolution and all related matters.

Fording Arrangement Corp.

Fording Arrangement Corp. is a corporation existing under the laws of the Province of Alberta. Fording Arrangement Corp. is a wholly owned subsidiary of Fording that has been incorporated for the purposes of participating in an internal reorganization by Fording that will occur as part of the Arrangement. Pursuant to this reorganization, Fording will cause Fording Arrangement Corp. to purchase from Fording, and Fording will transfer to Fording Arrangement Corp., all of the limited partnership interests in Fording LP held by Fording and all of the issued and outstanding equity securities of Fording ULC. Thereafter, and as part of the Arrangement, Teck will acquire all of the shares of Fording Arrangement Corp. from Fording. Fording Arrangement Corp. has not carried on any activities to date other than activities related to its formation and activities in furtherance of the Arrangement. Fording Arrangement Corp. played no role in initiating, structuring or negotiating the terms of the Arrangement Agreement or the Plan of Arrangement. Pursuant to the operation of the Declaration of Trust, Unitholders are entitled to direct the Trustees as to how the shares of Fording Arrangement Corp. are to be voted in connection with the election of directors of Fording Arrangement Corp. at each meeting of the shareholders of Fording Arrangement Corp. at which directors are elected and in respect of certain other matters. Accordingly, the directors of Fording Arrangement Corp. are in effect, elected in accordance with the instructions of the Unitholders and certain other actions of Fording Arrangement Corp. can only be undertaken if authorized by the Unitholders. The head office of Fording Arrangement Corp. is located at Suite 2500, TransCanada Tower, 450-1st Street, S.W., Calgary, Alberta, T2P 5H1. The directors of Fording Arrangement Corp. are Michael Grandin and Frank Turner.

Historical Selected Financial Data

Financial Statements and Reconciliation to U.S. GAAP

The audited financial statements (and the notes thereto, including the related supplemental note entitled “United States Accounting Principles and Reporting”) set forth in Fording’s Annual Report on Form 40-F for the year ended December 31, 2007 and the unaudited financial statements (and the notes thereto) for the quarterly period ended June 30, 2008 set forth in Exhibit 99.2 of Fording’s periodic report on Form 6-K dated July 23, 2008 are incorporated by reference in this Circular. These financial statements should be read in conjunction with the Annual Information Form filed with the annual report and the relevant Management’s Discussion and Analysis filed with the annual and the quarterly report. Copies of these documents may be obtained from the locations set forth in “Where You Can Find More Information”. The audited financial statements for the years ended December 31, 2007 and 2006 and the unaudited interim consolidated financial statements of Fording for the six months ended June 30, 2008 have been prepared in accordance with Canadian GAAP. Fording’s audited financial statements for the years ended December 31, 2007 and 2006 have been reconciled to U.S. GAAP. In certain respects, the accounting principles of U.S. GAAP differ from those of Canadian GAAP.

All documents of the type referred to above that are filed by Fording with a securities commission or any similar authority in the United States or Canada after the date of this Circular and prior to the Meeting will be deemed to be incorporated by reference into this Circular.

Any statement contained in this Circular or in a document incorporated or deemed to be incorporated by reference in this Circular will be deemed to be modified or superseded for the purposes of this Circular to the extent that a statement contained in this Circular, or in any other subsequently filed document that also is or is deemed to be incorporated by reference in this Circular, modifies or supersedes such statement. The modifying or superseding statement need not state that it modifies or supersedes a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement will not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Circular.

Ratio of Earnings (Loss) to Fixed Charges and Book Value Per Unit

The following table contains the computation of ratio of earnings (loss) to fixed charges and book value per Unit of Fording, under Canadian GAAP, for the periods indicated.


	Six Months Ended		Years Ended December 31,
	June 30, 2008		2007		2006
	(millions of		(millions of
	Canadian dollars)		Canadian dollars)

Ratio of Earnings (Loss) to Fixed Charges:
Earnings (loss):
Net Income from continuing operations before income taxes	$	436.9	$	434.2	$	627.3
Fixed charges		7.8		21.4		18.8

	$	444.7	$	455.6	$	646.1

Fixed charges:
Interest expense	$	7.8	$	21.4	$	18.8

Ratio of earnings (loss) to fixed charges		57.0		21.3		34.4


	As at
	June 30,
	2008

Book Value Per Unit:
Book value of equity (in millions of Canadian dollars)	$	266.1

Outstanding Units (in millions)		148.9

Book value per Unit	$	1.79

Distribution Policy

Fording’s distribution policy is contained in the Declaration of Trust. Certain aspects of the policy are subject to change at the discretion of the Trustees. Prior to the execution of the Arrangement Agreement, Fording’s policy was to distribute on a quarterly basis all of Fording’s distributable cash to Unitholders of record on the last business day of each calendar quarter (March, June, September and December), with actual payment to be made to such Unitholders on or about the 15th day of the following month. For further information regarding Fording’s distribution policy prior to the execution of the Arrangement Agreement, please see Fording’s Annual Information Form filed March 17, 2008. If the Arrangement is completed, no further quarterly or other distributions will be declared or paid to the Unitholders.

The following table sets forth, for the calendar periods indicated, the distributions declared per Unit by Fording in respect of the Units for the two years preceding the date of this Circular:


	Distribution
	Declared
	(per Unit)

2006
Third Quarter	$	0.80
Fourth Quarter	$	0.95

2007
First Quarter	$	0.65
Second Quarter	$	0.65
Third Quarter	$	0.60
Fourth Quarter	$	0.53

2008
First Quarter	$	0.50
Second Quarter	$	2.50

Previous Purchases and Sales

Since January 1, 2006, Fording has not purchased or sold any of its securities (excluding securities issued on the exercise of Exchange Options, on the settlement of Phantom Units or in connection with the Fording DRIP), except as set forth below.

On August 9, 2006, Fording redeemed 1,998 Units for an aggregate redemption amount of $69,513.02. On November 8, 2006, Fording redeemed four Units for an aggregate redemption amount of US$90.40.

Previous Distributions of Units

During the five years preceding the date of this Circular, Fording has not distributed any Units, other than as follows:


Date	Purpose of Distribution	Number of Units			Aggregate Proceeds

Fiscal 2003	Exercise of Exchange Options		1,998,801	⁽¹⁾	$	12,202,575.10
Fiscal 2004	Exercise of Exchange Options		103,158		$	556,710.65
April 8, 2004	Distribution pursuant to Short Form Prospectus		6,000,000	⁽²⁾	$	105,000,000.00	⁽³⁾
Fiscal 2005	Exercise of Exchange Options		48,762		$	174,225.85
Fiscal 2006	Exercise of Exchange Options		50,130		$	317,658.93
Fiscal 2007	Exercise of Exchange Options		12,684		$	46,592.23
Fiscal 2008	Exercise of Exchange Options		2,890		$	12,856.46


(1)	This number comprises both the 125,307 common shares in the capital of the public company predecessor to Fording issued pursuant to option exercises prior to the plan of arrangement that occurred in 2003 and the 1,873,494 Units issued pursuant to the exercise of Exchange Options following the completion of such arrangement.

(2)	This number is adjusted to reflect the three-for-one split of the Units effected on September 6, 2005.

(3)	$17.50 per Unit.

Price Range and Trading Volume of the Units

The Units are listed and posted for trading on the TSX under the symbol “FDG.UN” and on the NYSE under the symbol “FDG”.

Toronto Stock Exchange

The closing price of the Units on the TSX on July 28, 2008 (the trading day before the Arrangement was announced) was $83.80. The following table sets forth the reported high and low closing sale prices and the aggregate volume of trading of the Units on the TSX for the months indicated:


	High		Low
Month	(CDN$)		(CDN$)		Volume

2006
January 2006		47.55		41.91		6,542,246
February 2006		47.25		44.61		9,778,011
March 2006		49.39		43.74		10,213,356
April 2006		44.66		40.93		5,882,276
May 2006		41.82		36.60		7,429,955
June 2006		39.07		34.18		6,552,333
July 2006		35.24		29.23		5,281,372
August 2006		34.74		32.25		4,154,994
September 2006		33.50		28.01		6,753,617
October 2006		29.02		27.05		15,660,792
November 2006		25.50		21.60		11,287,298
December 2006		27.63		23.79		8,557,721

2007
January 2007		26.73		23.08		5,953,595
February 2007		29.45		26.56		9,429,896
March 2007		28.80		24.90		9,397,091
April 2007		27.22		25.37		6,739,917
May 2007		31.84		27.32		13,254,315
June 2007		35.00		30.04		12,431,509
July 2007		36.88		33.39		11,277,788
August 2007		34.85		30.25		13,969,468
September 2007		38.45		35.46		8,746,092
October 2007		40.46		34.62		16,895,501
November 2007		34.30		29.82		13,618,870
December 2007		39.60		34.30		10,686,724

2008
January 2008		45.00		32.76		15,885,582
February 2008		51.63		44.25		18,838,397
March 2008		54.27		49.67		17,034,482
April 2008		67.51		55.07		16,789,569
May 2008		78.75		62.00		11,461,290
June 2008		97.50		80.52		17,538,319
July 2008		90.51		75.25		43,096,294
August 1 to August 19, 2008		92.88		88.86		18,065,614

New York Stock Exchange

The closing price of the Units on the NYSE on July 28, 2008 (the trading day before the Arrangement was announced) was US$82.49. The following table sets forth the reported high and low closing sale prices and the aggregate volume of trading of the Units on the NYSE for the months indicated:


	High		Low
Month	(US$)		(US$)		Volume

2006
January 2006		41.47		36.00		24,478,100
February 2006		40.98		38.65		15,516,200
March 2006		42.88		37.55		27,554,600
April 2006		39.43		36.13		17,841,700
May 2006		37.51		32.95		21,960,200
June 2006		35.57		30.69		20,742,100
July 2006		31.90		25.69		19,814,000
August 2006		31.20		28.53		14,422,000
September 2006		30.20		24.90		22,952,100
October 2006		25.74		23.77		24,179,400
November 2006		22.42		18.98		44,389,900
December 2006		24.04		20.75		32,742,600

2007
January 2007		22.66		19.80		17,680,400
February 2007		25.10		22.68		18,981,600
March 2007		24.57		21.00		19,263,500
April 2007		24.38		21.87		15,095,500
May 2007		29.47		24.66		21,629,600
June 2007		32.74		28.12		23,357,400
July 2007		35.28		31.60		20,160,900
August 2007		33.11		28.62		20,899,500
September 2007		38.78		33.90		14,445,600
October 2007		42.25		36.42		21,852,500
November 2007		36.75		30.36		16,731,900
December 2007		39.25		33.89		13,825,400

2008
January 2008		44.64		34.21		26,937,600
February 2008		54.00		44.39		32,416,800
March 2008		54.39		49.05		34,915,600
April 2008		66.99		54.05		45,521,000
May 2008		80.00		60.77		32,865,500
June 2008		95.61		79.40		57,072,800
July 2008		92.56		75.35		91,430,800
August 1 to August 19, 2008		87.40		83.31		37,758,666

Unitholder Rights Plan

Upon the Arrangement becoming effective, the Unitholder Rights Plan will terminate and be of no further force or effect. See “The Arrangement — Arrangement Mechanics” in this Circular.

Exchange Option Plan, Phantom Unit Plan and Fording DRIP

Upon the Arrangement becoming effective, each of the Exchange Option Plan, the Phantom Unit Plan and the Fording DRIP will terminate and be of no further force or effect. See “The Arrangement — Arrangement Mechanics” in this Circular.

Risk Factors Relating to Fording

Whether or not the Arrangement is completed, Fording will continue to face many of the risks that it currently faces with respect to its business and affairs. A description of the risk factors applicable to Fording is contained under the heading “Risk Factors” in Fording’s Annual Information Form filed March 17, 2008, which section is specifically incorporated by reference into this Circular. Fording’s Annual Information Form has been filed on SEDAR at www.sedar.com and, as part of its Form 40-F, on EDGAR at www.sec.gov and upon request to the Secretary of Fording, a Unitholder will be provided with a copy of this document free of charge. See “Risk Factors Relating to the Arrangement” in this Circular.

Material Changes in the Affairs of Fording

Except as disclosed elsewhere in this Circular or as publicly disclosed, Fording has no plans or proposals for a material change in its affairs.

Prior Valuations, Prior Offers and Material Non-Public Information

To the knowledge of the Trustees, Directors and senior officers of Fording, after reasonable inquiry, and other than as described under the heading “Special Factors — Background to the Arrangement” and “Special Factors — Independent Valuation”, there have been no prior valuations in respect of Fording (as contemplated in MI 61-101) within the 24-month period preceding the date of this Circular and except as described under the heading “Special Factors — Background to the Arrangement”, no bona fide prior offer (as contemplated in MI 61-101) that relates to the transactions contemplated by the Arrangement has been received by Fording during the 24-month period preceding execution of the Arrangement Agreement. As of the date of this Circular, Fording has no knowledge of any undisclosed fact or change that could reasonably be expected to have a significant effect on the market price or value of the Units. The Trustees, Directors and senior officers of Fording have no knowledge of any material non-public information concerning Fording or its securities that has not been generally disclosed or described in this Circular.

Independent Auditors of Fording

PricewaterhouseCoopers LLP, Chartered Accountants, are the independent auditors of Fording and have served as the independent auditors of Fording since Fording’s formation in February 2003. PricewaterhouseCoopers LLP is independent in accordance with the Rules of Professional Conduct as outlined by the Institute of Chartered Accountants of Alberta.

Transfer Agent and Registrar

Computershare Investor Services Inc. is the transfer agent and registrar for the Units at its principal offices in Calgary, Alberta; Toronto, Ontario; Montreal, Quebec; Vancouver, British Columbia, and New York, New York.

INFORMATION CONCERNING TECK

Incorporation

Teck is the continuing company resulting from the merger in 1963 of three companies, Teck-Hughes Gold Mines Ltd., Lamaque Gold Mines Limited and Canadian Devonian Petroleum Ltd., incorporated in 1913, 1937 and 1951, respectively. Teck continued under the Canada Business Corporations Act in 1978 and since that time has undergone several other reorganizations.

Teck is a reporting issuer (or its equivalent) in all of the provinces and territories of Canada and files periodic reports with the SEC under the 1933 Act. The Class A Shares and the Class B Shares trade on the TSX under the symbols “TCK.A” and “TCK.B”, respectively, and the Class B Shares trade on the NYSE under the symbol “TCK”.

Business Overview

Teck’s principal products are copper, zinc, metallurgical coal and gold. Lead, molybdenum, various specialty and other metals, chemicals and fertilizers are produced as by-products of Teck’s operations. Teck also sells electrical power that is surplus to its requirements at the Trail metallurgical operations in British Columbia. Teck has a 20% interest in Fort Hills Energy Limited Partnership, which is developing the Fort Hills oil sands project in Alberta, and a 50% interest in certain exploration stage oil sands properties. Teck has interests in the following principal mining and processing operations:


Operation	Ownership Interest			Type of Operation	Jurisdiction

Trail		100	%	Zinc/Lead Refinery	British Columbia, Canada
Red Dog		100	%	Zinc/Lead Mine	Alaska, USA
Pend Oreille		100	%	Zinc/Lead Mine	Washington, USA
Antamina		22.5	%	Copper/Zinc Mine	Ancash, Peru
Highland Valley		97.5	%	Copper/Molybdenum Mine	British Columbia, Canada
Quebrada Blanca		76.5	%	Copper Mine	Tarapaca, Chile
Andacollo		90	%	Copper Mine	Coquimbo, Chile
Duck Pond		100	%	Copper/Zinc Mine	Newfoundland, Canada
Elkview		38	%⁽¹⁾	Coal Mine	British Columbia, Canada
Fording River		40	%⁽¹⁾	Coal Mine	British Columbia, Canada
Greenhills		32	%⁽¹⁾	Coal Mine	British Columbia, Canada
Coal Mountain		40	%⁽¹⁾	Coal Mine	British Columbia, Canada
Line Creek		40	%⁽¹⁾	Coal Mine	British Columbia, Canada
Cardinal River		40	%⁽¹⁾	Coal Mine	Alberta, Canada
David Bell/Williams		50	%	Gold Mine	Ontario, Canada
Pogo		40	%	Gold Mine	Alaska, USA

Note:


(1)		Percentages do not include Teck’s existing indirect interest through ownership of approximately 19.6% of the outstanding Units of Fording.

Recent Developments

Acquisition of Global Copper Corp.

On August 1, 2008, Teck acquired all of the shares of Global Copper Corp. for aggregate consideration of approximately $415 million, of which approximately $136 million was paid in cash, with the balance being satisfied through the issuance of approximately 6.9 million Class B Shares.

Interests of Teck Experts

The statements as to Teck’s mineral reserves and mineral resources which appear in Teck’s Annual Information Form for the year ended December 31, 2007 have been incorporated by reference in this Circular upon the authority of the following experts: Paul C. Bankes, P.Geol., Dan Gurtler, AIMM, Don Mills, P.Geol., and Ross Pritchard, P. Eng., each of whom has acted as a Qualified Person (as such term is defined in NI 43-101) in connection with these estimates. Mr. Bankes is an employee of Teck. Messrs. Mills and Pritchard are employees of the Partnership, of which an affiliate of Teck is the managing partner. Mr. Gurtler is an employee of Compañía Minera Antamina S.A., in which Teck holds a 22.5% share interest. Sproule Associates Limited (“Sproule”) has acted as an independent reserves auditor in connection with Teck’s interest in the Fort Hills project. GLJ Petroleum Consultants Ltd. (“GLJ”) has acted as an independent reserves auditor in connection with Teck’s interest in certain oil sand leases in the Athabasca region of Alberta.

As at the date of this Circular, Messrs. Bankes, Gurtler, Mills and Pritchard and the principals of Sproule and GLJ, as a group, hold beneficially, directly or indirectly, less than 1% of any class of Teck’s securities.

Teck’s consolidated financial statements as at December 31, 2007 and 2006 and for each of the years in the three-year period ended December 31, 2007 incorporated by reference in this Circular have been audited by PricewaterhouseCoopers LLP. PricewaterhouseCoopers LLP has advised Teck that it is independent of Teck within the meaning of the Rules of Professional Conduct of the Institute of Chartered Accountants of British Columbia.

The consolidated financial statements of Aur Resources Inc. as at December 31, 2006 and 2005 and for each of the years in the two-year period ended December 31, 2006 incorporated by reference in this Circular have been audited by PricewaterhouseCoopers LLP. PricewaterhouseCoopers LLP has advised Teck that it is independent of Aur Resources Inc. within the meaning of the Rules of Professional Conduct of the Institute of Chartered Accountants of Ontario.

The consolidated financial statements of Fording as at December 31, 2007 and 2006 and for each of the years in the three-year period ended December 31, 2007 incorporated by reference in this Circular have been audited by PricewaterhouseCoopers LLP. PricewaterhouseCoopers LLP has advised Teck that it is independent of Fording within the meaning of the Rules of Professional Conduct of the Institute of Chartered Accountants of Alberta.

Description of Share Capital

Teck is authorized to issue an unlimited number of Class A Shares and Class B Shares and an unlimited number of preference shares, issuable in series. As at August 19, 2008, there were outstanding 9,353,470 Class A Shares, 440,729,919 Class B Shares (or 445,489,332 calculated on a fully diluted basis, excluding the conversion rights of holders of Class A Shares) and no preference shares.

Class A Shares carry the right to 100 votes per share. Class B Shares carry the right to one vote per share. Holders of Class B Shares are entitled to attend and to speak at meetings of shareholders of Teck to the same extent as holders of Class A Shares. Each Class A Share is convertible, at the option of the holder, into one Class B Share. In all other respects, the Class A Shares and Class B Shares rank equally, including in respect of dividends and the right to receive the remaining property of Teck upon dissolution. No dividends may be paid on the Class A Shares or the Class B Shares unless all dividends on any preference shares outstanding have been paid. Subject to the rights, privileges, restrictions and conditions attaching to any preference shares, the holders of Class A Shares and Class B Shares are entitled to dividends as may be declared by the board of directors of Teck in their discretion out of funds legally available therefor.

The attributes of the Class B Shares contain so-called “coattail provisions” which provide that, if an offer (an “Exclusionary Offer”) to purchase Class A Shares that is required to be made to all or substantially all holders thereof, is not made concurrently with an offer to purchase Class B Shares on identical terms, then each Class B Share will be convertible into one Class A Share. The Class B Shares will not be convertible in the event that an Exclusionary Offer is not

accepted by holders of a majority of the Class A Shares (excluding those shares held by the person making the Exclusionary Offer). If an offer to purchase Class A Shares does not, under applicable securities legislation or the requirements of any stock exchange having jurisdiction, constitute a “take-over bid” or is otherwise exempt from any requirement that such offer be made to all or substantially all holders of Class A Shares, the coattail provisions will not apply.

As of the date of this Circular, the voting rights attached to the Class B Shares represent 32% of the aggregate voting rights attached to the Class A Shares and the Class B Shares. Following the completion of the Arrangement, the voting rights attached to the Class B Shares will represent 33.8% of the aggregate voting rights attached to the Class A Shares and the Class B Shares.

Teck is exempt from the requirements of Part 12 of National Instrument 41-101 — General Prospectus Requirements, as the Class B Shares to be offered as part of the consideration under the Arrangement were created before December 21, 1984.

Dividends

The Class A Shares and the Class B Shares rank equally as to the payment of dividends. Teck may not pay dividends on the Class A Shares and Class B Shares unless all dividends on any preferred shares outstanding have been paid to date. All dividends paid on these two classes of shares after 2005 are eligible dividends for purposes of the enhanced dividend tax credit that may be claimed by Canadian resident individuals.

Consolidated Capitalization

There has been no material change in the capital of Teck since the date of the comparative financial statements for the most recently completed financial year, except for the issuance of approximately 6.9 million Class B Shares on August 1, 2008 in connection with the acquisition of Global Copper Corp. described above. Unitholders are referred to Teck’s financial statements which are incorporated by reference in this Circular.

Price Range and Trading Volume

The Class A Shares are listed and posted for trading on the TSX under the symbol “TCK.A”. The Class B Shares are listed and posted for trading on the TSX and the NYSE under the symbols “TCK.B” and “TCK”, respectively. The following tables set forth the reported high and low closing sale prices and the aggregate volume of trading of the Class A Shares and the Class B Shares on the TSX during the 12 months preceding the date of this Circular.


Class A Shares		Class B Shares


Month	High		Low		Volume		Month	High		Low		Volume
	(CDN$)		(CDN$)					(CDN$)		(CDN$)

2007
July		58.20		50.00		107,229	July		52.22		45.80		57,190,129
August		55.00		48.45		134,156	August		46.31		40.35		56,387,114
September		55.45		51.14		38,200	September		48.22		42.58		52,170,476
October		57.36		52.85		46,011	October		51.24		46.20		46,236,084
November		52.50		42.34		65,628	November		45.74		34.83		78,523,395
December		48.75		43.50		81,623	December		39.35		33.60		58,262,811
2008
January		44.90		35.50		96,801	January		36.02		28.98		86,587,974
February		47.11		40.25		60,641	February		41.19		32.88		77,971,117
March		48.45		43.01		45,853	March		42.91		38.27		71,921,957
April		53.74		46.00		35,851	April		48.28		41.09		65,213,122
May		56.01		48.20		141,962	May		52.00		43.60		50,421,912
June		53.25		49.40		70,083	June		50.01		47.25		39,945,448
July		51.99		40.37		54,746	July		48.66		38.66		70,152,804
August 1 to August 19		47.00		41.00		29,446	August 1 to August 19		45.00		38.66		24,935,889

Prior Sales

There have been no Class B Shares issued by Teck within the 12 months prior to the date of this Circular, other than as follows:


	Number of Class B
Date of Issuance	Shares Issued		Issue Price

August 1, 2008		6,918,097	CDN$	45.00
September 28, 2007		1,493,849	CDN$	43.33
August 22, 2007		20,478,057	CDN$	43.33

In addition, during the last 12 months preceding the date of this Circular, Teck issued an aggregate of 1,655,000 options to acquire Class B Shares (“Teck Options”), with exercise prices between $33.97 and $49.17 and a weighted average exercise price of $34.43, as well as 1,084,561 Class B Shares in connection with the exercise of Teck Options at prices between $3.20 and $43.74, with a weighted average exercise price of $8.52.

Risk Factors Relating to Teck

In addition to the other information contained in or expressly incorporated by reference in this Circular, (including a description of the risk factors applicable to Teck contained under the heading “Risk Factors” in Teck’s Annual Information Form filed March 26, 2008), the following factors should be considered carefully when considering risks related to holding Class B Shares. These risks and uncertainties are not the only ones facing Teck. Additional risks and uncertainties not presently known to Teck or that Teck currently considers immaterial may also impair its business operations. If any of such risks actually occur, Teck’s business, prospects, financial condition, cash flows and operating results could be materially harmed. Teck’s Annual Information Form has been filed on SEDAR at www.sedar.com and, as part of its Form 40-F, on EDGAR at www.sec.gov and, upon request to Teck’s Secretary, a Unitholder will be provided with a copy of this document free of charge.

Teck faces risks in the mining and metals business

The business of exploring for and producing minerals is inherently risky. Few properties that are explored are ultimately developed into producing mines.

Mineral properties are often non-productive for reasons that cannot be anticipated in advance. Even after the commencement of mining operations, such operations may be subject to risks and hazards, including environmental hazards, industrial accidents, unusual or unexpected geological formations, unanticipated metallurgical difficulties, ground control problems and flooding. Teck’s metallurgical operations at Trail, British Columbia, and Teck’s concentrate mills and coal preparation plants are also subject to risks of process upsets and equipment malfunctions. Equipment and supplies may from time to time be unavailable on a timely basis. The occurrence of any of the foregoing could result in damage to or destruction of mineral properties or production facilities, personal injuries or death, environmental damage, delays or interruption of production, increases in production costs, monetary losses, legal liability and adverse governmental action.

Teck faces risks in connection with its proposed acquisition of the assets of Fording, including increased reliance on coal and significant additional debt load

If the proposed acquisition of the assets of Fording is completed, Teck will be significantly more reliant than it currently is on the results of its coal business, and will have incurred significant additional debt. Until Teck is able to repay a significant portion of its acquisition debt, any reduction in Teck’s cash flow from its coal business or its other businesses will be more material to Teck than is currently the case. The increased indebtedness will increase Teck’s sensitivity to interest rate fluctuations, and Teck’s need to reduce the acquisition debt may adversely affect, among other things, its ability to acquire other assets or to invest in its development assets, its vulnerability to deterioration in economic conditions that affect demand and prices for its products, and its flexibility in planning for, or reacting to, changes in Teck’s business and in the industry. If Teck’s cash flows and capital resources are insufficient to fund Teck’s interest and principal payment obligations, Teck may be forced to sell assets, seek additional capital or seek to restructure or refinance its indebtedness. If the debt Teck will incur in connection with the Arrangement becomes payable and Teck is not able to refinance or obtain capital, Teck may not be able to meet its obligations, which could have a material adverse impact on

Teck’s financial condition. There can be no assurance that income tax laws applicable to the mining industry will not change, or that the Canada Revenue Agency will not change its administrative or assessing practices, in each case in a manner that materially adversely affects Teck.

Teck’s insurance may not provide adequate coverage

Teck’s property, business interruption and liability insurance may not provide sufficient coverage for losses related to these or other hazards. Insurance against certain risks, including certain liabilities for environmental pollution, may not be available to Teck or to other companies within the industry. In addition, Teck’s insurance coverage may not continue to be available at economically feasible premiums, or at all. Any such event could have a material adverse affect on Teck’s business.

Teck could be subject to potential labour unrest or other labour disturbances as a result of the failure of negotiations in respect of its collective agreements

Over 6,400 of Teck’s approximately 8,850 employees are employed under collective bargaining agreements. Teck could be subject to labour unrest or other labour disturbances as a result of delays in or the failure of negotiations in respect of its collective agreements, which could, while ongoing, have a material adverse effect on its business.

Teck may not be able to hire enough skilled employees to support its operations

Teck competes with other mining companies to attract and retain key executives and skilled and experienced employees. The mining industry is labour intensive and Teck’s success depends to a significant extent on its ability to attract, hire, train and retain qualified employees, including its ability to attract employees with needed skills in the geographic areas in which it operates. Teck could experience increases in its recruiting and training costs, and decreases in its operating efficiency, productivity and profit margins, if it is not able to attract, hire and retain a sufficient number of skilled employees to support its operations.

Teck could become subject to material pension liabilities

Teck has assets in defined benefit pension plans which arise through employer contributions and returns on investments made by the plans. The returns on investments are subject to fluctuations depending upon market conditions and Teck is responsible for funding any shortfall of pension assets compared to its pension obligations under these plans.

Teck also has certain obligations to former employees with respect to post-retirement benefits. The cost of providing these benefits can fluctuate and the fluctuations can be material.

Teck’s liabilities under defined benefit pension plans and in respect of other post-retirement benefits are estimated based on actuarial and other assumptions. These assumptions may prove to be incorrect and may change over time and the effect of these changes can be material.

Fluctuations in the market price of base metals, specialty metals, metallurgical coal and gold may significantly affect the results of Teck’s operations

The results of Teck’s operations are significantly affected by the market price of base metals, specialty metals, metallurgical coal and gold, which are cyclical and subject to substantial price fluctuations. Teck’s earnings are particularly sensitive to changes in the market price of zinc, copper and metallurgical coal, and will become more sensitive to changes in the market price of metallurgical coal following completion of the Arrangement. Market prices can be affected by numerous factors beyond Teck’s control, including levels of supply and demand for a broad range of industrial products, substitution of new or different products in critical applications for Teck’s existing products, expectations with respect to the rate of inflation, the relative strength of the Canadian dollar and of certain other currencies, interest rates, speculative activities, global or regional political or economic crises and sales of gold and base metals by holders in response to such factors. If prices should decline below Teck’s cash costs of production and remain at such levels for any sustained period, Teck could determine that it is not economically feasible to continue commercial production at any or all of its mines. Teck may also curtail or suspend some or all of its exploration activities, with the result that its depleted reserves are not replaced.

Teck’s general policy is not to hedge changes in prices of its mineral production. From time to time, however, Teck may undertake hedging programs in specific circumstances, with an intention to reduce the risk of a commodity’s market price while optimizing upside participation, to maintain adequate cash flows and profitability to contribute to the long-term viability of its business. There are, however, risks associated with hedging programs including, among other things, an increase in gold lease rates (in the case of gold hedging), an increase in interest rates, rising operating costs, counterparty risks and production interruption events.

Fluctuations in the price and availability of consumed commodities affect Teck’s costs of production

Potential restrictions on availability of power and water are a risk for certain of Teck’s operations and development properties, particularly in Chile, and such restrictions could have a material adverse effect on Teck’s business. Prices and availability of commodities consumed or used in connection with exploration, development, mining, smelting and refining, such as natural gas, diesel, oil and electricity, sulphuric acid, as well as reagents such as copper sulfate, also fluctuate and these fluctuations affect the costs of production at Teck’s various operations. Teck’s smelting and refining operations at Trail require concentrates that Teck purchases from third parties. The availability of those concentrates and the treatment charges Teck can negotiate fluctuate depending on market conditions. These fluctuations can be unpredictable, can occur over short periods of time and may have a materially adverse impact on Teck’s operating costs or the timing and costs of various projects. Teck’s general policy is not to hedge Teck’s exposure to changes in prices of the commodities Teck uses in its business.

Teck faces risks associated with shortage of mining equipment and supplies

The growth in global mining activities has created a demand for mining equipment and related supplies that exceeds supply. For example, there has been, for some time, a global shortage of haulage truck tires and it is not known when this shortage will be resolved. Consequently, if equipment or other supplies cannot be procured on a timely basis, Teck’s expansion activities, production, development or operations could be negatively affected. The pace of global mining development activities has also led to supply constraints, limitation on the availability of labour and other cost pressures that will affect Teck’s development operations. Lead times for major equipment orders have increased. Wage pressures and other cost escalation will also affect construction activities at Teck’s development projects.

Teck’s acquisition of properties may be affected by competition from other mining companies

Because the life of a mine is limited by its reserves, Teck is continually seeking to replace and expand its reserves through the exploration of Teck’s existing properties as well as through acquisitions of interests in new properties or of interests in companies which own such properties. Teck encounters strong competition from other mining companies in connection with the acquisition of properties. This competition may increase the cost of acquiring suitable properties, should such properties become available to Teck.

Teck faces competition in product markets

The mining industry in general is intensely competitive and even if commercial quantities of mineral resources are developed, a profitable market may not exist for the sale of such minerals. Teck must sell base metals, metal concentrates, by-product metals and concentrate, metallurgical coal and gold at prices determined by world markets over which Teck has no influence or control. Teck’s competitive position is determined by its costs in comparison to those of other producers in the world. If Teck’s costs increase due to its locations, grade and nature of ore bodies, foreign exchange rates, or its operating and management skills, its profitability may be affected. Teck has to compete with larger companies that have greater assets and financial and human resources than it, and which may be able to sustain larger losses than it to develop or continue business.

Teck may face restricted access to markets in the future

Access to Teck’s markets may be subject to ongoing interruptions and trade barriers due to policies and tariffs of individual countries, and the actions of certain interest groups to restrict the import of certain commodities. Although there are currently no significant trade barriers existing or impending of which Teck is aware that do, or could, materially affect its access to certain markets, there can be no assurance that Teck’s access to these markets will not be restricted in the future.

Teck’s reserve and resource estimates may prove to be incorrect

Disclosed reserve estimates should not be interpreted as assurances of mine life or of the profitability of current or future operations. Teck estimates and reports its mineral reserves and mineral resources in accordance with the requirements of the applicable Canadian Securities Administrators and industry practice. Teck estimates and reports oil and gas reserves and resources in accordance with the requirements of the applicable Canadian Securities Administrators and industry practice. Estimates of reserves and resources for oil and gas reporting purposes are not comparable to mineral reserve and mineral resource estimates.

Mineral resources are concentrations or occurrences of minerals that are judged to have reasonable prospects for economic extraction, but for which the economics of extraction cannot be assessed, whether because of insufficiency of geological information or lack of feasibility analysis, or for which economic extraction cannot be justified at the time of reporting. Consequently, mineral resources are of a higher risk and are less likely to be accurately estimated or recovered than mineral reserves.

Teck’s mineral reserves and resources are estimated by persons who are employees of the respective operating company for each of its operations under the supervision of its employees. These individuals are not “independent” for purposes of applicable securities legislation. As a rule, Teck does not use outside sources to verify mineral reserves or mineral resources except at the initial feasibility stage.

The mineral and oil and gas reserve and resource figures incorporated in this Circular by reference are estimates based on the interpretation of limited sampling and subjective judgments regarding the grade, continuity and existence of mineralization, as well as the application of economic assumptions, including assumptions as to operating costs, foreign exchange rates and future commodity prices. The sampling, interpretations or assumptions underlying any reserve or resource estimate may be incorrect, and the impact on reserves or resources may be material. Should the mineralization and/or configuration of a deposit ultimately turn out to be significantly different from that currently envisaged, then the proposed mining plan may have to be altered in a way that could affect the tonnage and grade of the reserves mined and rates of production and, consequently, could adversely affect the profitability of the mining operations. In addition, short term operating factors relating to the reserves, such as the need for orderly development of ore bodies or the processing of new or different ores, may cause reserve and resource estimates to be modified or operations to be unprofitable in any particular fiscal period.

There can be no assurance that Teck’s projects or operations will be, or will continue to be, economically viable, that the indicated amount of minerals or petroleum products will be recovered or that they will be recovered at the prices assumed for purposes of estimating reserves.

The depletion of Teck’s mineral reserves may not be offset by future discoveries or acquisitions of mineral reserves

Teck must continually replace mineral reserves depleted by production to maintain production levels over the long term. This is done by expanding known mineral reserves or by locating or acquiring new mineral deposits. There is, however, a risk that depletion of reserves will not be offset by future discoveries of mineral reserves. Exploration for minerals and oil and gas is highly speculative in nature and the projects involve many risks. Many projects are unsuccessful and there can be no assurance that current or future exploration programs will be successful. Further, significant costs are incurred to establish mineral or oil and gas reserves and to construct mining and processing facilities. Development projects have no operating history upon which to base estimates of future cash flow and are subject to the successful completion of feasibility studies, obtaining necessary government permits, obtaining title or other land rights and availability of financing. In addition, assuming discovery of an economic orebody, depending on the type of mining operation involved, many years may elapse from the initial phases of drilling until commercial operations are commenced. Accordingly, there can be no assurance that Teck’s current work programs will result in any new commercial mining operations or yield new reserves to replace and/or expand current reserves.

Teck may be adversely affected by currency fluctuations

Teck’s operating results and cash flow are affected by changes in the Canadian dollar exchange rate relative to the currencies of other countries. Exchange rate movements can have a significant impact on results as a significant portion of Teck’s operating costs are incurred in Canadian and other currencies and most revenues are earned in US dollars. To

reduce the exposure to currency fluctuations, Teck enters into limited foreign exchange contracts from time to time, but these hedges do not eliminate the potential that such fluctuations may have an adverse effect on Teck. In addition, foreign exchange contracts expose Teck to the risk of default by the counterparties to such contracts, which could have a material adverse effect on its business.

Teck may be adversely affected by interest rate changes

Teck’s exposure to changes in interest rates results from investing and borrowing activities undertaken to manage its liquidity and capital requirements. Teck has incurred indebtedness that bears interest at fixed and floating rates, and it has entered into interest rate swap agreements to effectively convert some fixed rate exposure to floating rate exposure. There can be no assurance that it will not be materially adversely affected by interest rate changes in the future. In addition, Teck’s use of interest rate swaps exposes it to the risk of default by the counterparties to such arrangements. Any such default could have a material adverse effect on its business or results of operations.

Changes in environmental, health and safety laws may have a material adverse effect on Teck’s operations

Environmental, health and safety legislation affects nearly all aspects of Teck’s operations, including mine development, worker safety, waste disposal, emissions controls and protection of endangered and protected species. Compliance with environmental, health and safety legislation can require significant expenditures and failure to comply with environmental, health or safety legislation may result in the imposition of fines and penalties, the temporary or permanent suspension of operations, clean-up costs arising out of contaminated properties, damages, and the loss of important permits. Exposure to these liabilities arises not only from Teck’s existing operations, but from operations that have been closed or sold to third parties. Teck is required to reclaim properties after mining is completed and specific requirements vary among jurisdictions. In some cases, Teck may be required to provide financial assurances as security for reclamation costs, which may exceed its estimates for such costs. Teck’s historical operations have generated significant environmental contamination. Teck could also be held liable for worker exposure to hazardous substances. There can be no assurance that Teck will at all times be in compliance with all environmental, health and safety regulations or that steps to achieve compliance would not materially and adversely affect its business.

Environmental, health and safety laws and regulations are evolving in all jurisdictions where Teck undertakes activities. Teck is not able to determine the specific impact that future changes in environmental laws and regulations may have on its operations and activities, and its resulting financial position; however, Teck anticipates that capital expenditures and operating expenses will increase in the future as a result of the implementation of new and increasingly stringent environmental, health and safety regulations. For example, emissions standards for carbon dioxide and sulphur dioxide are becoming increasingly stringent, as are laws relating to the use and production of regulated chemical substances. Further changes in environmental, health and safety laws, new information on existing environmental, health and safety conditions or other events, including legal proceedings based upon such conditions, or an inability to obtain necessary permits, could require increased financial reserves or compliance expenditures or otherwise have a material adverse effect on Teck. Changes in environmental, health and safety legislation could also have a material adverse effect on product demand, product quality and methods of production and distribution. In the event that any of Teck’s products were demonstrated to have negative health effects, Teck could be exposed to workers compensation and product liability claims which could have a material adverse effect on its business.

Teck is highly dependent on third parties for the provision of transportation services

Due to the geographical location of many of Teck’s mining properties and operations, Teck is highly dependent on third parties for the provision of rail and port services. Teck negotiates prices for the provision of these services in circumstances where it may not have viable alternatives to using specific providers, or have access to regulated rate setting mechanisms. The Partnership is particularly dependent on Canadian Pacific Railway for rail services and Westshore Terminals Ltd. for port services. Contractual disputes, demurrage charges, rail and port capacity issues, availability of vessels and rail cars, weather problems or other factors can have a material adverse effect on Teck’s ability to transport materials according to schedules and contractual commitments.

Teck’s Red Dog mine in Alaska operates year-round on a 24 hour per day basis. The annual production of the mine must be stored at the port site and shipped within an approximately 100-day window when sea ice and weather conditions permit. Two purpose-designed shallow draft barges transport the concentrates to deep water moorings. The barges cannot

operate in severe swell conditions. Unusual ice or weather conditions, or damage to the barges or ship loading equipment could restrict Teck’s ability to ship all of the stored concentrate. Failure to ship the concentrate during the shipping season could have a material adverse effect on Teck’s sales, as well as on its Trail metallurgical operations, and could materially restrict mine production subsequent to the shipping season.

Aboriginal title claims and rights to consultation and accommodation may affect Teck’s existing operations as well as development projects and future acquisitions

Governments in many jurisdictions must consult with aboriginal peoples with respect to grants of mineral rights and the issuance or amendment of project authorizations. Consultation and other rights of aboriginal people may require accommodations, including undertakings regarding employment and other matters in impact and benefit agreements. This may affect Teck’s ability to acquire within a reasonable time frame effective mineral titles in these jurisdictions, including in some parts of Canada in which aboriginal title is claimed, and may affect the timetable and costs of development of mineral properties in these jurisdictions. The risk of unforeseen aboriginal title claims also could affect existing operations as well as development projects and future acquisitions. These legal requirements may affect Teck’s ability to expand or transfer existing operations or to develop new projects.

Teck operates in foreign jurisdictions and faces added risks and uncertainties due to different economic, cultural and political environments

Teck’s business operates in a number of foreign countries where there are added risks and uncertainties due to the different economic, cultural and political environments. Some of these risks include nationalization and expropriation, social unrest and political instability, uncertainties in perfecting mineral titles, trade barriers and exchange controls and material changes in taxation. Further, developing country status or an unfavourable political climate may make it difficult for Teck to obtain financing for projects in some countries.

Teck faces risks associated with its development projects

The Fort Hills oil sands project in Alberta is at an early stage of development. Petro-Canada, as project operator, in consultation with UTS Energy Corporation and Teck, will be responsible for further definition of the scope and parameters of the project and its design and development. There can be no assurance that the development or construction activities will commence in accordance with current expectations or at all. Construction activities at the Galore Creek copper-gold project in British Columbia were suspended in the fourth quarter of 2007 as a result of Teck’s review of the first season of construction and a more detailed engineering study that predicted substantially higher capital costs and a longer construction schedule for the project. In addition, Teck has other very early stage development and advanced exploration projects. Construction and development of any of these projects are subject to numerous risks, including, without limitation:


	•	risks resulting from the fact that the Fort Hills project and other projects are at an early stage of development and therefore are subject to development and construction risks, including the risk of significant cost overruns and delays in construction, and technical and other problems;

	•	risks associated with delays in obtaining, or conditions imposed by, regulatory approvals;

	•	risks associated with obtaining amendments to existing regulatory approvals and additional regulatory approvals which will be required;

	•	risks of significant fluctuation in prevailing prices for copper, gold, oil, other petroleum products and natural gas, which may affect the profitability of the projects;

	•	risks resulting from the fact that Teck is a minority partner in the Fort Hills Energy Limited Partnership and major decisions with respect to project design and construction may be made without its consent;

	•	risks associated with the fact that Teck has partners or joint venturers in certain other projects, and major project decisions may require the agreement of both parties;

	•	risks associated with litigation;

	•	risks resulting from dependence on third parties for services and utilities for the projects;


	•	risks associated with the availability of sufficient water or water rights for Teck’s operations and development projects;

	•	risks associated with the ability of Teck’s partners and joint venturers to finance their respective shares of project expenditures; and

	•	risks associated with Teck’s obtaining financing for these projects on commercially reasonable terms.

Regulatory efforts to control greenhouse gas emissions could materially negatively affect Teck’s business

Teck’s businesses includes several operations that emit large quantities of carbon dioxide, or that produce or will produce products that emit large quantities of carbon dioxide when consumed by end users. This is particularly the case with Teck’s metallurgical coal operations and its oil sands projects. Carbon dioxide and other greenhouse gases are the subject of increasing public concern and regulatory scrutiny.

The Kyoto Protocol is an international agreement that sets limits on greenhouse gas emissions from certain signatory countries. While the United States government has announced that it will not ratify the protocol, the Canadian Parliament voted to ratify its participation in this agreement and the Kyoto Protocol came into force in Canada on February 16, 2005. The Kyoto agreement commits Canada to limit its net greenhouse gas emissions to 6% below the levels emitted in 1990. Canada’s current level of greenhouse gas emissions significantly exceeds the agreed-upon limit.

In 2007, the Government of Canada announced a policy objective of reducing total Canadian greenhouse gas emissions by 20% below 2006 levels by 2020 and by 60% to 70% below that level by 2050. As part of this initiative, the federal Government intends to require reductions in emission intensity levels from certain industrial facilities, including oil and gas facilities and smelting and refining facilities, by 6% per year for each year from 2007 to 2010 and 2% per year each year thereafter. Affected facilities will be permitted to meet reduction targets by emissions trading or contributions to a technology fund, in addition to emissions abatement. Additional policy measures are anticipated in coming years under this federal policy framework.

In Alberta, the Climate Change and Emissions Management Act and the Specified Gas Emitters Regulation require certain existing large emitters (facilities, including oil sands facilities, that are releasing 100,000 tonnes or more of greenhouse gas emissions in any calendar year after and including 2003) to reduce their emissions intensity by 12% starting July 1, 2007. The regulation also outlines options for meeting reduction targets. If reducing emissions intensity by 12% is not initially possible, large emitters will be able to invest in an Alberta-based technology fund to develop infrastructure to reduce emissions or to support research into innovative climate change solutions. Large emitters will be required to pay $15 per tonne to the technology fund for every tonne of emissions above the 12% reduction target. Alternatively, large emitters could also invest in Alberta-based projects outside their operations that reduce or offset emissions on their behalf.

In British Columbia, the provincial government has announced a policy goal of reducing greenhouse gas emission by at least 33% below current levels by 2020 and, on July 1, 2008 began imposing a new provincial carbon tax on fuel. This new fuel tax starts at a rate based on $10 per tonne of carbon emissions and rises at a rate of $5 per year up to $30 per tonne by 2012. This tax will act to increase Teck’s fuel costs, which will impact its competitiveness in the global marketplace. The provincial government is also currently contemplating “cap and trade” legislation that could impose additional costs on Teck’s operations located in the province.

The primary source of greenhouse gas emissions in Canada is the use of hydrocarbon energy. Teck’s operations depend significantly on hydrocarbon energy sources to conduct daily operations, and there are currently no economic


	Page

WHERE YOU CAN FIND MORE INFORMATION		117
QUESTIONS AND FURTHER ASSISTANCE		117
FREQUENTLY ASKED QUESTIONS ABOUT THE ARRANGEMENT		118
APPROVAL OF FORDING		123
CONSENT OF RBC CAPITAL MARKETS		124
CONSENT OF NATIONAL BANK FINANCIAL INC		125
CONSENT OF PRICEWATERHOUSECOOPERS LLP		126
CONSENT OF PRICEWATERHOUSECOOPERS LLP		127
CONSENT OF PRICEWATERHOUSECOOPERS LLP		128
CONSENT OF OSLER, HOSKIN & HARCOURT LLP		129
GLOSSARY OF TERMS		130

APPENDICES

Appendix A Arrangement Resolution		A-1
Appendix B Arrangement Agreement		B-1
Appendix C Fairness Opinion of Rbc Capital Markets		C-1
Appendix D Independent Valuation of National Bank Financial Inc.		D-1
Appendix E Plan of Arrangement		E-1
Appendix F Interim Order		F-1
Appendix G Petition for Final Order		G-1
Appendix H Section 191 of The Business Corporations Act (Alberta)		H-1
Appendix I Unaudited Pro Forma Consolidated Financial Statements of Teck Cominco Limited		I-1
Appendix J Comparison of Rights as a Unitholder of Fording and as a Class B Shareholder of Teck		J-1


	Page

NOTICE TO SECURITYHOLDERS IN THE UNITED STATES		iv
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS		v
REPORTING CURRENCIES AND ACCOUNTING PRINCIPLES		viii
EXCHANGE RATES		ix
REFERENCE TO ADDITIONAL INFORMATION		ix
INFORMATION CONTAINED IN THIS CIRCULAR		ix
INFORMATION PERTAINING TO TECK		x
SUMMARY TERM SHEET		1
Parties to the Arrangement		1
Date, Time and Place of the Meeting		2
Record Date, Meeting Materials and Voting of Proxies for Unitholders		2
Purpose of the Meeting		2
Expected Timing of Arrangement		2
Vote Required to Approve the Arrangement		2
Voting Procedures and Revocation of Proxies for Unitholders		3
Instructions for Holders of Phantom Units or Exchange Options		4
Recommendation of the Independent Committees		4
Position of the Independent Committees as to Fairness		4
Recommendation of the Trustees and the Directors		8
Reasons for the Arrangement from Fording’s and Fording ULC’s Perspectives		8
Reasons for the Arrangement from the Perspective of Teck; Position of Teck Regarding Fairness of the Arrangement		8
Fairness Opinion		9
Independent Valuation		9
Interests of Trustees, Directors, Executive Officers and Others in the Arrangement		9
Certain Effects of the Arrangement		10
Distribution Policy		10
Sources of Funds for the Arrangement		10
The Arrangement Agreement		10
The Arrangement Mechanics		12
Dissenting Registered Unitholders’ Rights		13
Court and Regulatory Approvals		14
Certain Canadian Federal Income Tax Considerations		15
Certain United States Federal Income Tax Considerations		15
Risk Factors Relating to the Arrangement		15
SPECIAL FACTORS		17
Background to the Arrangement		17
Position of the Independent Committees as to Fairness		28
Recommendation of the Independent Committees		31
Recommendation of the Trustees and the Directors		31
Reasons for the Arrangement from Fording’s and Fording ULC’s Perspectives		32
General Considerations		32
Reasons for the Arrangement from the Perspective of Teck		32
Position of Teck Regarding Fairness of the Arrangement		33
Certain Effects of the Arrangement		35
Effects on Fording if the Arrangement is Not Completed		36
Fairness Opinion		37
Independent Valuation		38
FURTHER DISTRIBUTIONS		43
THE ARRANGEMENT		43
Expected Timing of Arrangement		43
Required Securityholder Approval		43
Arrangement Mechanics		43
Interests of Trustees, Directors, Executive Officers and Others in the Arrangement		48
Sources of Funds for the Arrangement		52
Confidentiality Agreement		54
THE ARRANGEMENT AGREEMENT		54
Conditions to the Arrangement		55
Representations and Warranties		57
Fording Covenants		57
Teck Covenants		59
Covenants Regarding Non-Solicitation		61
Termination		64


	Page

Break Fee		65
Expense Reimbursement		66
Trustees’, Directors’ and Officers’ Indemnification		66
Further Indemnification Obligations		66
Treatment of Fording Officers Following the Consummation of the Arrangement		67
PRINCIPAL LEGAL MATTERS		67
Court Approval of the Arrangement and Completion of the Arrangement		67
Principal Regulatory Matters		68
Canadian Securities Law Matters		71
Toronto Stock Exchange and New York Stock Exchange Approval		72
Stock Exchange De-Listing and Reporting Issuer Status		73
United States Securities Laws Considerations		73
INFORMATION CONCERNING FORDING		74
Formation		74
Business Overview		74
Historical Selected Financial Data		76
Distribution Policy		77
Previous Purchases and Sales		78
Previous Distributions of Units		78
Price Range and Trading Volume of the Units		78
Toronto Stock Exchange		79
New York Stock Exchange		80
Unitholder Rights Plan		80
Exchange Option Plan, Phantom Unit Plan and Fording DRIP		81
Risk Factors Relating to Fording		81
Material Changes in the Affairs of Fording		81
Prior Valuations, Prior Offers and Material Non-Public Information		81
Independent Auditors of Fording		81
Transfer Agent and Registrar		81
INFORMATION CONCERNING TECK		82
Incorporation		82
Business Overview		82
Recent Developments		83
Interests of Teck Experts		83
Description of Share Capital		83
Dividends		84
Consolidated Capitalization		84
Price Range and Trading Volume		84
Prior Sales		85
Risk Factors Relating to Teck		85
Transfer Agent and Registrar		92
Previous Purchases of Fording Securities		93
Agreements Involving Fording’s Securities		93
CERTAIN TAX CONSIDERATIONS FOR UNITHOLDERS		93
Certain Canadian Federal Income Tax Considerations		93
Certain United States Federal Income Tax Considerations		98
DISSENTING REGISTERED UNITHOLDERS’ RIGHTS		104
RISK FACTORS RELATING TO THE ARRANGEMENT		107
TECK’S PLANS FOR FORDING		109
EXPENSES OF THE ARRANGEMENT		109
BENEFITS FROM THE ARRANGEMENT		109
COMMITMENTS TO ACQUIRE UNITS		110
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS		110
OTHER INFORMATION AND MATTERS		110
PROXY SOLICITATION AND DEPOSITARY		110
LEGAL MATTERS		111
INFORMATION CONCERNING VOTING AT THE MEETING		112
Date, Time and Place of the Meeting		112
Record Date		112
Solicitation of Proxies		112
Distribution of Meeting Materials		112
Voting Procedures		112
Registered Unitholders		113
Non-Registered Unitholders		113
Appointment and Revocation of Proxies		114
Voting of Proxies		114
Voting Securities and Holders of More than 10% of the Units		115
Please Complete Your Proxy		115
Instructions for Holders of Phantom Units or Exchange Options		116
DOCUMENTS INCORPORATED BY REFERENCE		116