As filed with the Securities and Exchange Commission on March 31, 2005

______________________________________________________________________________

U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 40-F

(Check one)



[  ]

Registration statement pursuant to section 12 of the Securities Exchange Act of 1934



or



[ü]

Annual report pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2004





Commission File Number 1-15230



FORDING CANADIAN COAL TRUST

(Exact name of Registrant as specified in its charter)



ALBERTA(Province or Other Jurisdiction of Incorporation or Organization)1221(Primary Standard Industrial Classification Code Number)98-0393766(I.R.S. Employer Identification Number, if applicable)




Suite 1000, 205  9th Avenue SE, Calgary, Alberta T2G 0R4, (403) 260-9800

(Address and telephone number of Registrants principal executive offices)

Brad R. Johnston, General Manager, NYCO Minerals, Inc.
124 Mountain View Drive, Willsboro, New York 12996-0368, (518) 963-4262

(Name, address (including zip code) and telephone number (including area code)
of agent for service in the United States)



Securities registered or to be registered pursuant to Section 12(b) of the Act:



Units, no par value
Unit Purchase Rights(1)(Title of Each Class)The New York Stock Exchange(Name of Each Exchange on which Registered)


(1)

The Unit Purchase Rights initially are attached to and trade with the Units.



Securities registered or to be registered pursuant to Section 12(g) of the Act:  None



Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:  None



For annual reports, indicate by check mark the information filed with this Form:



[ü] Annual information form

[ü] Audited annual financial statements



Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report:



As of December 31, 2004 there were 48,980,479 Units of the issuer outstanding



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Indicate by check mark whether the Registrant by filing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934 (the "Exchange Act"). If "Yes" is marked, indicate the filing number assigned to the Registrant in connection with such Rule:



Yes [  ]  82-________

No [ü]



Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days:



Yes [ü]

No [  ]









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Information to be Filed on This Form.



Exhibit

Description

A

2004 Annual Information Form.

B

Audited Consolidated Financial Statements, including consolidated balance sheets as at December 31, 2004 and 2003 and consolidated statements of income, accumulated earnings and cash flows for each of the years in the three-year period ended December 31, 2004 (including a reconciliation to US GAAP).

C

2004 Management Discussion and Analysis.

D

Consent of Independent Accountants.

E

Certifications Required by Rule 13a-14(a) of the Securities Exchange Act of 1934.

F

Section 906 certification of James L. Popowich, the President, and Ronald A. Millos, the Vice-President and Chief Financial Officer.

Disclosure Controls and Procedures

Disclosure controls and procedures are defined by the Securities and Exchange Commission as those controls and procedures that are designed to ensure that information required to be disclosed in our filings under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.  The management of the Trust is responsible for establishing and maintaining adequate disclosure controls and procedures for the Trust and this involves ensuring that appropriate disclosure controls and procedures are in place and operating effectively.  As of December 31, 2004, an evaluation was carried out under the supervision of and with the participation of the Trusts management, including the principal executive officer and principal financial officer, of the effectiveness of the Trusts disclosure controls and procedures.  Based on that evaluation, our principal executive officer and principal financial officer have determined that such disclosure controls and procedures are effective.

Code of Ethics for Principal Executive Officer and Senior Financial Officers

The Trust and Fording Inc. have adopted a Joint Code of Business Conduct that applies to all employees, including the Trusts principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions.  This code is available on the Trusts web site at www.fording.ca and in print to any unit holder who requests it.  All amendments to the code, and all waivers of the code with respect to any of the principal executive or financial officers covered by it, will be posted on the Trusts web site and provided in print to any unit holder who requests them.  There were no waivers of the Joint Code of Business Conduct in 2004.

Audit Committee

Identification of Audit Committee

The Trust has a separately-designated standing audit committee established in accordance with Exchange Act regulations.  The following trustees constitute such Audit Committee: Harry G. Schaefer, F.C.A., committee chairman; Michael S. Parrett, C.A.; and Peter Valentine, F.C.A.





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Each of these trustees has been determined by the board to be independent and financially literate as those terms are defined by the New York Stock Exchange for audit committee members.

Audit Committee Financial Expert

The Trusts board of trustees has determined that more than one member of the Audit Committee meets the legal requirements of an audit committee financial expert.  Of those members, Harry G. Schaefer, F.C.A. is designated as an audit committee financial expert.

Principal Accounting Fees and Services

Following is a summary of professional services provided by the Companys principal auditors, PricewaterhouseCoopers LLP, during the years ended December 31, 2003 and 2004, and the related fees (in Canadian dollars):

|                   | 2004       |  | 2003      
|------------------ | ---------- |  | ----------
|Audit fees         | $277,500   |  | $258,000  
|Audit related fees | $128,413   |  | $241,500  
|Tax fees           | $  22,750  |  | $  57,510 
|All other fees     | $    1,625 |  | $    1,625
|Total              | $430,288   |  | $558,635  



Audit fees

Audit fees were for professional services rendered by PricewaterhouseCoopers LLP for the audit of the annual consolidated financial statements, review of the Annual Information Form and Management Discussion and Analysis and completion of limited reviews of quarterly financial information.

Audit related fees

Audit related fees include professional services rendered by PricewaterhouseCoopers LLP in the following areas:  accounting consultations; review of documents required for debt refinancing; audits related to pension plans; compliance with terms of various contractual agreements; and requirements of the Sarbanes-Oxley Act of 2002.

Tax fees

Tax fees include assistance rendered to the Trust in connection with various tax compliance issues in Canada and the United States.

All other fees

Other fees include the purchase of a license to access a financial reporting and assurance information database developed by PricewaterhouseCoopers LLP.





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Pre-approval Policies and Procedures

All services provided by and fees paid to PricewaterhouseCoopers LLP were approved by the Audit Committee in advance of the services being performed.  The Audit Committee has considered the compatibility of the non-audit services provided by the Trusts principal auditors with auditor independence.

Off-Balance Sheet Arrangements

Reference is made to the section titled Other Information - Off-Balance Sheet Arrangements in the 2004 Management Discussion and Analysis attached as an exhibit hereto.

Contractual Obligations

Reference is made to the contractual obligations table included in the section titled Liquidity and Capital Results in the 2004 Management Discussion and Analysis attached as an exhibit hereto.

New York Stock Exchange Corporate Governance Disclosures

In 2004, the Trust had four independent trustees and three non-independent trustees, within the meaning of the rules of the New York Stock Exchange.  A majority of the trustees will be independent after the Trusts annual meeting in 2005 in the event that all of the candidates nominated by the Trusts Governance Committee are elected.  A majority of the directors of Fording Inc. are independent, within the meaning of the rules of the New York Stock Exchange.

Undertaking

Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.

Consent to Service of Process

The Registrant has previously filed with the Commission a written irrevocable consent and power of attorney on Form F-X.





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Signatures

Pursuant to the requirements of the Exchange Act, the registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.

Date:  March 31,
2005

FORDING CANADIAN COAL TRUST



By:

/s/ James Frederick Jones

James Frederick Jones

Trust Secretary





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Exhibit
A
Annual Information Form

FORDING
CANADIAN COAL TRUST

ANNUAL
INFORMATION FORM

March
29, 2005



1



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TABLE
OF CONTENTS



FORWARD-LOOKING
INFORMATION ADVISORY

1

NON-GAAP
FINANCIAL MEASURES

1

DEFINED
TERMS

2

CONVERSION
TABLE

2

REFERENCES
TO CURRENCY

2

CORPORATE
STRUCTURE

3

GENERAL
DEVELOPMENT OF THE BUSINESS

3

DESCRIPTION
OF THE BUSINESS

6

RESERVES
AND RESOURCES

18

RISK
FACTORS

27

OTHER
INFORMATION REGARDING THE TRUST

27

ANNUAL
AND QUARTERLY FINANCIAL INFORMATION

31

CAPITAL
STRUCTURE

31

MARKETS
FOR SECURITIES

36

GOVERNANCE

36

LEGAL
PROCEEDINGS

44

INTEREST
OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

44

TRANSFER
AGENT AND REGISTRAR

44

MATERIAL
CONTRACTS

45

ADDITIONAL
INFORMATION

47

APPENDIX
"A":  GLOSSARY OF TECHNICAL TERMS

A-1

APPENDIX
"B":  GENERAL GLOSSARY

B-1

APPENDIX
"C":  DEFINITIONS FOR RESERVES AND RESOURCES

C-1

APPENDIX
"D":  FORDING CANADIAN COAL TRUST AUDIT COMMITTEE CHARTER

D-1

i



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FORWARD-LOOKING
INFORMATION ADVISORY

This
annual information form contains forward-looking information within the meaning
of the United States Private Securities Litigation Reform
Act of 1995 relating, but not limited, to Fording
Canadian Coal Trust's expectations, intentions, plans and beliefs.
 Forward-looking information can often be identified by forward-looking
words such as "anticipate", "believe", "expect", "goal", "plan",
"intend", "estimate", "may", and "will" or similar words
suggesting future outcomes, or other expectations, beliefs, plans, objectives,
assumptions, intentions or statements about future events or performance.

Unitholders
and prospective investors are cautioned not to place undue reliance on
forward-looking information.  By its nature, forward-looking information
involves 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 information or contribute
to the possibility that predictions, forecasts or projections will prove to be
inaccurate.  These factors include, but are not limited to: changes in
commodity prices and exchange rates; changes in steel-making methods and other
technological changes; the strength of various economies; difficulties inherent
with operating and selling in foreign countries; changes in the regulation in
respect to the use of metallurgical coal and wollastonite products; the
effectiveness of the managing partner of the Elk Valley Coal Partnership in
managing its affairs; the effects of competition and pricing pressures in the
metallurgical coal and industrial minerals markets; the oversupply of, or lack
of demand for, metallurgical coal and wollastonite products; currency and
interest rate fluctuations; various events which could disrupt operations and/or
the transportation of products, including labour stoppages and severe weather
conditions; the demand for and availability of rail, port and other
transportation services; and management's ability to anticipate and manage the
foregoing factors and risks.

Information
relating to the magnitude or quality of mineral deposits is deemed to be
forward-looking information.  The reliability of such information 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, 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.

The
Trust cautions that the list of factors set forth above is
not exhaustive.  Some of the risks, uncertainties and other factors which
negatively affect the reliability of forward-looking information are discussed
in the Trust's public filings with the Canadian securities
regulatory authorities, including its most recent management information
circular, annual report, quarterly reports, material change reports and news
releases, and with the United States Securities and
Exchange Commission, including its most recent annual report on Form 40-F as
supplemented by its filings on Form 6-K.  Copies of the
Trust's Canadian public filings are available at
www.sedar.com and U.S. public filings are available at
www.sec.gov, respectively.  The Trust further cautions
that information contained on, or accessible through, these websites is current
only as of the date of such information and may be superseded by subsequent
events or filings.  The Trust undertakes no obligation
to update publicly or otherwise revise any information, including any
forward-looking information, whether as a result of new information, future
events or other such factors that affect this information.

NON-GAAP
FINANCIAL MEASURES

Financial
measures such as cash available for distribution, Distributable Cash and net
income before unusual items, future income taxes and discontinued operations are
not measures recognized under Canadian generally accepted accounting principles
("GAAP") and do not have standardized meanings prescribed by GAAP.
 These measures are presented in this Annual Information Form because
management of the Trust believes these non-GAAP measures are relevant measures
of the ability of the Trust to earn and distribute cash returns to holders of
Units.  These measures as computed by the Trust may differ from similar
computations made by other similar issuers and accordingly, may not be
comparable to such measures as reported by such other issuers.

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DEFINED
TERMS

The
meanings of certain capitalized terms used in this Annual
Information Form can be found in the Glossary of Technical
Terms and the General Glossary set forth respectively at Appendix
"A" and Appendix "B".

CONVERSION
TABLE

|To
      Convert To | From               | Multiply
      By
|------------------- | ------------------ | -----------------
|Cubic
      Yards   | Cubic
      metres | 1.308            
|Feet                | Metres             | 3.281            
|Miles               | Kilometres         | 0.621            
|Acres               | Hectares           | 2.471            
|Pounds              | Kilograms          | 2.205            
|Short
      Tons    | Tonnes             | 1.102            
|Long
      tons     | Tonnes             | 0.984            
|BTU/lb              | kJ/kg              | 0.430            



REFERENCES
TO CURRENCY

Unless
otherwise noted, all references in this document to monetary amounts are
expressed in Canadian dollars and "$" means Canadian
dollars.

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CORPORATE
STRUCTURE

Name
and Formation

The
Fording Canadian Coal Trust is an
open-ended mutual fund trust created pursuant to the Declaration
of Trust and governed by the laws of Alberta.  The Trust's
head office is located at Suite 1000, 205 - 9th Avenue SE, Calgary,
Alberta T2G 0R4.

Intercorporate
Relationships

The
following chart sets forth all material subsidiaries of the Trust
as at December 31, 2004 and indicates their respective
jurisdictions of incorporation or organization and the ownership percentage of
each such entity beneficially owned, or over which control or direction is
exercised by the Trust.





















Notes:

(1)

Reducing
to 61% on April 1, 2005 and to 60% on April 1, 2006.  See "Three-Year
History - Achievement of Synergies."

(2)

Fording
Inc. holds a single voting share in Minera
NYCO S.A. de C.V. in compliance with Mexican corporate law
which requires that corporations have at least two shareholders.

GENERAL
DEVELOPMENT OF THE BUSINESS

General
Description of the Business

The
Trust is one of the largest income trusts in Canada.
 The Units are publicly traded in Canada
on the TSX (FDG.UN) and in the United
States on the NYSE (FDG).
 Through investments in metallurgical coal and industrial minerals mining
and processing operations, the Trust makes quarterly cash
distributions to Unitholders from its Distributable
Cash.

3

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Three-Year
History

The
Trust was established in connection with the Arrangement
between Old Fording, Teck Cominco, Westshore,
Sherritt Coal Partnership II and CONSOL that became
effective on February 28, 2003.  The nature and
development of the businesses in which the Trust, through Fording
Inc., has invested during the three most recently completed financial years is
described in "Elk Valley Coal Partnership - The Last Three Years" and
"NYCO - The Last Three Years".

Reorganization

Pursuant
to the Arrangement, the business of Old Fording was
reorganized under the Trust and its subsidiary, Fording
Inc. and the Elk Valley Coal Partnership was formed.  The
Elk Valley Coal Partnership is a general partnership, the Partners
of which, on December 31, 2004, were Fording Inc., Teck
Cominco and certain affiliates of Teck Cominco.  As part of the Arrangement,
Luscar Energy Partnership (the partners of which are
affiliates of each of Sherritt and OTPP)
and CONSOL contributed indirectly to the
Elk Valley Coal Partnership their respective interests in the Line Creek mine,
the Luscar mine and the undeveloped Cheviot project as well
as their collective 46.4% interest in Neptune, the
corporation that owns Neptune Terminals in Vancouver, British
Columbia.  Old Fording contributed to the
Elk Valley Coal Partnership its metallurgical coal business comprised
substantially of the Fording River mine, the Coal Mountain
mine and its interest in the Greenhills mine.  Teck
Cominco contributed to the Elk Valley Coal Partnership its
North American metallurgical coal business comprised substantially of the
Elkview mine.  These contributions established the Elk Valley Coal
Partnership as the world's second-largest producer of seaborne
metallurgical hard coking coal.

In
addition, and as part of the Arrangement, and subject to
the Fording Royalty, Old Fording sold
its Prairie Operations to Sherritt Coal Partnership II and each of Teck Cominco,
Westshore, Sherritt and OTPP
subscribed for Units.  The Arrangement is described in
detail in the Trust's 2003 Annual Information Form.
 On March 22, 2005, Golden Apple Income Inc., a wholly owned subsidiary of
OTPP, announced that it plans to sell 750,000 Units.

Issuance
of Two Million Units

The
Trust filed a short form prospectus on April
12, 2004 in connection with the issuance of two million Units
on a bought deal basis to a syndicate of underwriters led by RBC
Capital Markets at $52.50 per Unit.
 The offering closed on April 16, 2004.  The Trust
invested the net proceeds of the offering of $99
million in additional Fording Preferred Shares and Fording Subordinated Notes.
 In turn, Fording Inc. used the proceeds to pay down
indebtedness, which provided it with a greater range of financing alternatives
for funding its portion of the development of the Cheviot
Creek pit at the Cardinal River mine.

Achievement
of Synergies

The
Elk Valley Coal Partnership was initially owned 65% by the Trust
and 35% by Teck Cominco and certain affiliates of Teck
Cominco.  The Partnership
Agreement provided for an increase in Teck Cominco's interest in the
Elk Valley Coal Partnership to a maximum of 40% in the event that Teck Cominco,
as managing Partner, was able to realize certain synergies  as a result of
the combination of the various mines and other properties comprising the
Partnership.  After discussions among the Partners and upon review of
reports of various experts, the Partners determined that synergies had been
achieved and that Fording Inc.'s interest would be
reduced to 62% effective April 1, 2004, to 61% on April
1, 2005 and to 60% on April 1, 2006.  Teck Cominco's
entitlements will increase correspondingly over the same period.  The
entire 5% reduction in interest in the Elk Valley Coal
Partnership is being recorded to earnings.  This charge is reduced by an
estimate of cash to be received for the estimated additional Distribution
Entitlements of 2% for the year ended March 31, 2005 and 1%
for the year ended March 31, 2006.  These additional
Distribution Entitlements will be included in cash available for distribution
over the period ending March 31, 2006.

Quintette
Mine Asset Transfer

The
Elk Valley Coal Partnership accepted the contribution of certain of the Quintette
mine assets and purchased certain other assets of Teck
Cominco related to the Quintette mine on December
31, 2004.  The contribution of mine assets, including equipment, coal
leases, permits and licenses associated with the Quintette
Mine was contemplated

4



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by
the Arrangement and was to occur once
Teck Cominco had completed the reclamation of the Quintette minesite.  However,
the Elk Valley Coal Partnership agreed to an earlier transfer of the Quintette
mine assets before reclamation was completed in return for an agreement by Teck
Cominco to complete the reclamation and provide the Elk
Valley Coal Partnership with an indemnity against any liability arising from the
early transfer.

Elkview
Mine Equity Interest

On
December 20, 2004, the Trust announced
jointly with Teck Cominco, NSC and POSCO that they had
signed letters of intent which contemplate that NSC and
POSCO would enter into 10 year sales contracts for 4.85 million tonnes per annum
in aggregate of metallurgical coal for 2005 from the Elkview
mine and other Elk Valley mines, increasing to 6.25 million
tonnes per annum in aggregate in 2007.  The letters of intent also
contemplate that each of NSC and POSCO would acquire,
through subsidiaries, a 2.5% equity interest in a new entity which would own and
operate the Elkview mine.  Consideration of US$25
million is being paid by each of NSC and POSCO for such equity interests.
 Completion of this transaction is subject to due diligence, completion of
definitive documentation and board approval.

Proposed
Reorganization

At
the Annual and Special Meeting, Unitholders will be asked to approve a
three-for-one split of the Trust's Units.  It is anticipated that the
Unit split will result in a corresponding reduction in the market price per Unit
making them more affordable for retail investors.

Unitholders
will also be asked to provide conditional approval of a two-step reorganization
of the Trust and its subsidiaries.  The first step would result in the
creation of a flow-through structure which would effectively see distributions
from Elk Valley Coal Partnership taxed at the Unitholder level.  The second
step, if undertaken, would be a transaction whereby the Trust would acquire a
direct interest in the Elk Valley Coal Partnership.

In
addition to Unitholder approval, completion of the reorganization is subject to
receipt of certain regulatory and third-party approvals.  A more detailed
description of the reorganization and the required approvals will be contained
in the Notice of Meeting and Management Information Circular that will be mailed
to Unitholders in early April in advance of the Annual and Special Meeting.

Changes
to Applicable Tax Legislation

The
Government of Canada announced a number of proposals in
2004 that had or have the potential to affect the manner in which certain types
of distributions from an income trust are taxed and to limit investment in those
vehicles by certain classes of investors.  These proposals are summarized
below.  Unitholders are encouraged to consult their
own tax advisors regarding the application of the proposals to their particular
circumstances.

Limits
on Investments by Designated Taxpayers

One
of the initiatives proposed in the March 23, 2004 Federal
Budget would have the effect of limiting the level of investment in business
trusts, such as the Trust, by certain designated taxpayers,
including registered pension plans, pension corporations and various tax-exempt
pension investment corporations, through the imposition of a tax on Units
held by such taxpayers.  Following the announcement of these initiatives,
various affected taxpayers made submissions to the Federal Department
of Finance regarding such proposals.  These  measures have now been
suspended to allow for further consultation.

Withholding
on Distributions to Non-Residents

The
March 23, 2004 Federal Budget
contained further proposals impacting distributions made by an income trust to Unitholders
not resident in Canada ("Non-Residents")
for the purposes of the Tax Act.
 Generally, these proposals, which are stated to apply as of January
1, 2005, contemplate that certain types of distributions made by an income trust
to Non-Residents that are otherwise not subject to Canadian tax, including
withholding tax, will be subject to withholding under the Tax
Act at a rate of 15% of the gross amount of the distribution.

5

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Limitations
on Non-Resident Ownership

The
Tax Act provides that a trust will
lose its status as a mutual fund trust if it is maintained primarily for the
benefit of Non-Residents.  On September 16, 2004, the
Federal Department of Finance released a proposed amendment to this test which
would have provided that status as a mutual fund trust would be lost if the fair
market value of the units of a trust owned by Non-Residents exceeded 50% of the
fair market value of all units of the trust.  However, the Notice of Ways
and Means Motion tabled in the House of Commons on December 6, 2004 did not
include this proposed amendment.  In the accompanying Department of Finance
press release, it was noted that further discussions would be pursued with the
private sector concerning the appropriate Canadian tax treatment of
non-residents investing in resource property through mutual funds.

In
the Federal Budget released on February 23, 2005, the Minister of Finance
indicated that he will continue to monitor developments in the markets for
business income trusts and future initiatives, if any, will be taken following
these consultations and in full consideration of the costs and benefits related
to business income trusts.

Based
on geographical reports received by the Trust, the Trustees believe that the
Trust is not maintained primarily for the benefits of Non-Residents.  See
"Capital Structure - Limitations on Non-Resident Unitholders".

DESCRIPTION
OF THE BUSINESS

The
Trust does not carry on any active business.
 Distributions to Unitholders are facilitated by the Trust's
investment in Fording Inc.  The Trust holds all of the
issued and outstanding Fording Common Shares, Fording Preferred Shares and
Fording Subordinated Notes and does not own any other
material assets.

Through
Fording Inc., the Trust holds a 62%
interest, declining to 61% effective April 1, 2005 and to
60% effective April 1, 2006, in the
Elk Valley Coal Partnership and a 100% interest in NYCO.
 The Trust uses the cash it
receives from its investment in Fording Inc. to make
quarterly cash distributions to its Unitholders.  The
Elk Valley Coal Partnership accounted for 96% of the Trust's
revenues in 2004 and NYCO accounted for the balance.

The
Trust had revenues of $1.17 billion in
2004 and revenues of $1.04 billion in 2003.

The
Elk Valley Coal Partnership

Overview

The
Elk Valley Coal Partnership is a general partnership formed under the laws of
the Province of Alberta.  On December 31, 2004 the Partners
of the Elk Valley Coal Partnership were Fording
Inc., Teck Cominco and certain affiliates of Teck Cominco.
 On February 28, 2005, Teck Cominco and TBCI
contributed their interests in the Elk Valley Coal Partnership to the Teck
Cominco Coal Partnership of which Teck Cominco and TCBI are the partners with
the result that the Partners are now comprised of Fording Inc., Teck Cominco
Coal Partnership (which serves as managing partner) and QCP.

Summary
of Partnership Agreement

The
Elk Valley Coal Partnership is operated pursuant to the terms of the Partnership
Agreement, the material terms of which are summarized below.

Management
of the Elk Valley Coal Partnership

On
December 31, 2004, Teck Cominco was the managing partner of the Elk Valley Coal
Partnership.  As set forth above, effective February 28, 2005, Teck Cominco
Coal Partnership became the managing partner.  The managing partner
supervises management of the Partnership, provides strategic direction and
assists in the realization of synergies.  However, certain significant
matters regarding the Partnership must be approved by Partners holding not less
than 95% of the outstanding Distribution Entitlements (a "Special Resolution
of Partners"), as further described below.

6

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The
managing partner can resign as managing partner on 60 days advance notice to the
other Partners.  Further, the managing partner will be deemed to have
resigned in certain circumstances (insolvency, reduction in its interest below
20%, or wilful default of the Partnership Agreement). In such circumstances,
Partners holding a Distribution Entitlement of more than 5% (other than the
resigning managing partner if the managing partner was deemed to have resigned
due to insolvency or wilful default of the Partnership Agreement) must
unanimously select a new managing partner. Pending the selection of a new
managing partner, the Partner then holding the largest Distribution Entitlement
can designate a temporary managing partner.

The
day-to-day operations of the Elk Valley Coal Partnership are undertaken by
officers of the Elk Valley Coal Partnership and other  management personnel
designated by the managing partner.

Annual
Budget Approval Process

The
annual operation of the Elk Valley Coal Partnership, including budgeting and
capital spending, must be set out in a capital and operating plan and budget for
each calendar year (the "Operating and Capital Plans").  The Operating
and Capital Plans must be presented to the Partners by no later than November 15
of each year for the following calendar year and must be approved by a Special
Resolution of the Partners.

The
managing partner must use its best efforts to ensure that the business of the
Partnership is conducted substantially in accordance with Operating and Capital
Plans, except in certain extraordinary circumstances.  Any material
amendment or variation to such plans must also be approved by Special Resolution
of Partners.

Special
Resolution of Partners Matters

In
addition to the approval of the Operating and Capital Plans or any material
amendment thereto, a special resolution of Partners is required in a variety of
other circumstances such as any change in the distribution policy of the Elk
Valley Coal Partnership, any proposed merger, arrangement or reorganization of
the Elk Valley Coal Partnership, the admission of new Partners (other than
wholly owned subsidiaries or affiliates of existing Partners) or the decision to
institute bankruptcy or insolvency proceedings.

Distribution
Entitlements

Each
Partner is entitled to share in the profits and losses of the Partnership and to
participate in the distribution of assets on liquidation or dissolution of the
Partnership in proportion to its Distribution Entitlement.  As at December
31, 2004, the Distribution Entitlements of the Partners were as follows:

Partner
      
      Distribution
        EntitlementFording
        Inc.
      
      62.000%Teck
        Cominco
      
      37.833%QCP
      
      0.164%TBCI
      
      0.003%Total
      
      100.000%




Teck
Cominco's Distribution Entitlement will increase to 39.833% and Fording Inc.'s
will decrease to 60% over the course of the next two coal years.  See "Three-Year
History - Achievement of Synergies".

Reporting

The
Elk Valley Coal Partnership reports monthly to the Partners with respect to the
operational results and financial performance of the Partnership.  In
addition, on a quarterly basis, the managing partner reports to the Board of
Directors with respect to the operational results and financial performance of
the Elk Valley Coal Partnership and such other matters as the Board of Directors
may reasonably request.

7

---

The
Elk Valley Coal Partnership is also required to provide to each Partner, within
55 days of the end of each calendar year, audited financial statements of the
Partnership for the previous calendar year and such other financial information
relating to such calendar year as the Partners may request.

Further,
the Elk Valley Coal Partnership is required to provide to each of the Partners
such information as those Partners may require in order to satisfy their public
company reporting obligations.  In this regard, the Elk Valley Coal
Partnership is required to provide to the Partners a report of any material
change in the affairs of the Partnership, quarterly and annual financial
statements prepared in accordance with generally accepted accounting principles,
management's discussion and analysis for the relevant period covered by the
aforementioned financial statements and such other documents as are customarily
required in connection with the preparation and release of quarterly and annual
financial information by public issuers in Canada and the United States.

Sale/Assignment
of Partnership Interest

A
Partner may sell, assign, transfer or dispose of its Elk Valley Coal Partnership
interest to a subsidiary or affiliate (a "permitted transferee"); however,
any intended sale, assignment, transfer or disposition to other than a permitted
transferee is subject to a right of first offer to the other Partners.
 Notwithstanding the foregoing, the sale by Teck Cominco and certain
affiliates of Teck Cominco of their Elk Valley Coal Partnership interest, other
than to a permitted transferee, will be subject to the consent of the
Independent Directors, such consent not to be unreasonably withheld.

Assets
of the Elk Valley Coal Partnership

The
Elk Valley Coal Partnership has six operating mines.  It owns Fording
River, Coal Mountain, Elkview, Line Creek and Cardinal
River and has an 80% interest in a joint venture that operates the Greenhills
mine.  The remaining 20% interest in the joint venture is owned by POSCO
Canada Ltd., an affiliate of POSCO, a Korean steel company.  Five of the
six mines are located in close proximity to each other in
the Elk Valley region of southeast British Columbia.
 The sixth mine, Cardinal River, which includes the Cheviot
Creek pit, is located in west central Alberta.  The
Elk Valley Coal Partnership operates its mines through its wholly owned
subsidiary, the Elk Valley Coal Corporation.  The
Elk Valley Coal Partnership also owns numerous other
properties, including the coal preparation plant and coal resources at the
former Quintette mine and other coal
resources in northeast British Columbia and a 46.4%
interest in Neptune which owns Neptune Terminals in Vancouver,
British Columbia.

All
of the Elk Valley Coal Partnership's mines are open-pit 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 market
conditions.  All of the mines are serviced by two-lane all weather roads.
 The Elk Valley Coal Partnership's Reserves, facilities and waste dumps
are all proximate to its mine locations.

8

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The
following map shows the location of the Elk Valley Coal Partnership's six
mines:



|Mine
      Locations       
|---------------------------
|Ca[fordingaif2005001.jpg]  
|Source:
      Fording Data.



Principal
Product and Markets

The
principal product of the Elk Valley Coal Partnership is
hard coking coal.  Hard coking coal is a type of metallurgical coal that is
used primarily for making coke in integrated steel mills.  When making
steel, two of the key raw ingredients are iron ore and coke.  Coke
is used to convert the iron ore into molten iron.  Coke
is made by heating coking coal to about 2000oF (1100oC)
in the absence of oxygen in a coke oven.  The lack of oxygen prevents the
coal from burning.  The coking process drives off various liquids, gases
and volatile matter.  The remaining solid matter forms coke, a solid mass
of nearly pure carbon.  Approximately 1.5 tonnes of metallurgical coal are
needed to produce one tonne of coke.  Only certain types of bituminous coal
have the necessary characteristics required to make coke.  These
characteristics include caking properties (the ability to melt, swell and
re-solidify when heated) and low impurity (e.g. moisture, ash, sulphur, etc.).

Metallurgical
coal is a term used to describe coal products suitable for making steel in the
integrated steel mill process.  There are three main categories of
metallurgical coal:  hard coking coal that forms high-strength coke;
semi-soft coking coal that produces coke of lesser quality; and PCI
coal that is used primarily for its heat value and is not typically considered a
coking coal.  Semi-soft and PCI coals have lower sales
values compared to hard coking coal due to the relative availability of these
products.  Integrated steel mills will optimize the use of semi-soft and PCI
coals in order to reduce overall costs.  However, there are limits to the
ability of integrated steel mills to substitute semi-soft and PCI
coals for hard coking coal.  Higher use of PCI coals
reduces overall coking coal requirements but the coking coal used has to be of
higher quality.  Hard coking coal improves coke oven production yields and
during periods of high coke demand the use of semi-soft coking coals is
generally reduced.  The following schematic outlines how steel is produced
in an integrated steel mill.

9

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[fordingaif2005003.gif]



The
principal market for the Elk Valley Coal Partnership's hard coking coal is the
seaborne hard coking coal market.  The
seaborne hard coking coal market is defined by the global
nature of international steel-making, the relative concentration of quality
metallurgical coal deposits in Australia, Canada
and the United States and the relative low cost of seaborne
transportation.  Total worldwide production of higher quality
seaborne hard coking coal was estimated to be approximately
120 million tonnes in 2004.  Australia is the largest
source of seaborne hard coking coal
while Canada is the second largest source, with the
Elk Valley Coal Partnership accounting for substantially all of Canadian
production in 2004.  Australia, Canada
and the United States account for approximately 80% of
the world's seaborne hard coking coal production.

Trade
in the seaborne hard coking coal
market is influenced by crude steel production that, in turn, is largely
dependent on the overall state of regional and global economic conditions.
 The global trade of steel products is very large and fluctuations in
supply and demand in various regions throughout the world are common.
 Although there are fluctuations in the total amount of steel produced
worldwide, the amount of steel produced by the integrated steel mill process has
been relatively stable.  In turn, the volume of hard
coking coal used in this process has not experienced the same variability as
total steel production.  In 2004, Canada's share of
the seaborne hard coking coal market was approximately 21%
or about 25 million tonnes.  Canadian hard coking coal is competitive in
the seaborne market due to its high quality, its suitability for blending with
coking coals from other countries and the desire of steel
producers to diversify their supplier base in order to create competition and
security of supply.  The Elk Valley Coal Partnership's principal markets
are Asia and Europe.  See "The Elk Valley Coal
Partnership - Last Three Years".

Principal
Competition

The
Elk Valley Coal Partnership currently competes primarily with coal producers
from Australia and the United States
in the seaborne hard coking coal market.  The supply of coal in the global
markets and the demand for coal among the world's steel producers has
historically provided for a competitive seaborne market.  Coal pricing is
generally established in U.S. dollars and the competitive
positioning among producers can be significantly affected by exchange rates.
 For example, a decline in the U.S. dollar value of
the Australian dollar compared to that of the Canadian dollar has in the past
and may in the future provide Australian producers with a cost advantage over
Canadian producers such as the Elk Valley Coal Partnership.  In addition, a
number of steel producers deal with multiple coal suppliers in order to promote
security of supply and further competitiveness in this market, although this
dynamic has been off-set somewhat by consolidation of producers.  The
competitive position of the Elk Valley Coal Partnership
continues to be determined primarily by its production and transportation costs
compared to those of other producers throughout the world.
 Costs are influenced largely by the location and nature of coal deposits,
mining and processing input costs, transportation and port costs, currency
exchange rates, operating and management skill and government taxation and
policy.

Cyclical
Nature of Seaborne Hard Coking Coal
Markets

Between
1997 and 2000, the price of seaborne
hard coking coal dropped by more than 30% due to over supply and a general
economic downturn in a number of Asian counties.  In 2000, supply and
demand returned to balance and supply remained tight through 2001.  Price
increases were achieved in most of Old Fording's markets
for the 2001 and 2002 coal years.  However, excess supply resulted in
average pricing for the 2003 coal year decreasing by approximately 3% from 2002.
 Demand for hard coking coal strengthened in the last half of 2003
resulting in sales volumes of the
Partnership for the fiscal year ended December 31, 2003
that were 24% higher than sales volumes for the same mines for
the fiscal year ended December 31, 2002.  Demand for
seaborne hard coking coal was strong in 2004 and is
expected to remain strong into 2005.  Integrated steel mills and coke
producers around the world are currently finding it difficult to secure
sufficient quantities of hard coking coal.  In
addition, steel production in China

10

---

is
forecast to increase in the next few years.  Although not as large as the
forecasted increase for China, India's steel production is also expected to
increase. These factors could result in further increased demand for hard coking
coal.  Accordingly, sales and production for the 2005 coal year are
expected to be at or near capacity.

The
following chart sets forth the average hard coking coal price received by Old
Fording from 1980 to 2002 and by the Elk Valley Coal
Partnership thereafter:







Coal
Markets

Hard
coking coal markets continue to remain tight due to the strong demand from the
global steel industry.  A significant factor in market demand is that China
has reversed its position from a net exporter of hard
coking coal to that of a net importer.  The loss of Chinese coke exports
has increased the global steel industry's demand for hard coking coal from
producers such as the Elk Valley Coal Partnership.

Increasingly,
steel producers are signing long-term contracts or purchasing interests in coal
producers in order to secure supplies of hard coking coal
to meet their future needs.  Higher coal prices are also attracting new
supply to the market.  In addition to the Elk Valley Coal Partnership's
planned production increases, other smaller-scale Canadian
producers have now started production and began making their first metallurgical
coal shipments in 2004.  Australian producers have also announced plans for
capacity increases.  There are a limited number of brownfield opportunities
of significance existing globally that can be brought into production quickly
and logistics chains in Canada and Australia
are operating at or near capacity and will require expansion to accommodate
significant new production supply.  The global increase in mining activity
throughout the world has resulted in significant lead time for delivery of large
mining equipment, which will be needed in order to bring new sources of supply
online.  These factors and expected continued strong demand suggest that it
may be one to two years before metallurgical coal markets return to balance.

The
Elk Valley Coal Partnership's production is fully contracted for the 2005 coal
year, with more than 95% of volumes contracted under evergreen or long-term
agreements.  The strong metallurgical coal market and undersupply situation
has resorted in significant increases in coal prices.

In
response to these market opportunities, the Elk Valley Coal Partnership is
proceeding with the development of the Cheviot Creek pit at the Cardinal River
operations. Capacity expansions at the other existing mines are also being
reviewed with the objective of increasing total annual production at all
operations to 30 million tonnes over the next two to three years.  Elk
Valley Coal Partnership is presently discussing its future increased production
plans with its rail and port service providers and their ability to handle the
higher production volumes.

11



---

Mining
and Processing

The
Elk Valley Coal Partnership's operations employ
conventional open-pit mining techniques using truck and shovel methods, although
a dragline may be used at the Fording River and Cardinal
River mines in some circumstances.  Overburden is
drilled and blasted with explosives and loaded onto large trucks by shovels and
loaders and hauled to waste dumps outside of the pit.  Once the overburden
is removed, the coal is loaded onto trucks for transport to the coal preparation
plant.  Coal preparation plants employ rotary breakers to break the coal to
a predetermined size and remove rock.  The coal is then washed using a
variety of techniques and conveyed to coal or gas fired dryers for drying.

Production
and Quality Control

All
exposed coal seams are sampled and analyzed under the supervision of
professional geologists and categorized by quality and coking potential.
 This data is then used to determine stockpiling and blending strategies.
 As a result, the Elk Valley Coal Partnership has an
available inventory of coal sources of varying qualities, which can be combined,
as required, to form blended products.  In addition to sampling at source,
coal is sampled at all stages of coal preparation, at the rail loadout and at
the port, to control quality.  By blending coals of different qualities, the
Elk Valley Coal Partnership is able to create a consistent, high quality
product.

Coal
Transportation

Processed
coal is conveyed to clean coal silos or other storage
facilities for storage and loadout to rail cars.  The loadout facilities
are set up to load and weigh unit trains (each train carrying up to 13,000
tonnes).  A spray system coats the coal in each rail car with a dust
inhibitor to minimize the escape of coal dust during transportation.

Rail
service to the five mines located in the Elk Valley is provided by the Canadian
Pacific Railway ("CPR").
 Service from the Fording River, Greenhills
and Coal Mountain mines to west coast ports is provided
pursuant to an agreement expiring March 31, 2007.
 Separate agreements for rail service to the Elkview
and Line Creek mines expired on March
31, 2004.

The
Elk Valley Coal Partnership and CPR are in a dispute
concerning the manner in which freight rates for coal shipped to west coast
ports from the five mines is to be determined.  Legal proceedings in
relation to the dispute have been initiated by CPR in the Alberta
Court of Queen's Bench and by the Elk Valley Coal Corporation in a final offer
arbitration under the Canadian Transportation Act ("CTA")
in respect of the Elkview Mine.  On December 13, 2004,
an arbitrator accepted CPR's final offer in the
arbitration, which could determine the rate payable by the
Elk Valley Coal Partnership for coal shipped from the Elkview
Mine to the west coast ports.  The arbitrated rate is confidential and
cannot be disclosed.  However, CPR has also challenged
the Canadian Transportation Agency's jurisdiction under the CTA
to refer the determination of freight rates for the Elkview
Mine to the arbitrator.  If that challenge is successful, it would
supersede the decision of the arbitrator.  If CPR's jurisdictional
challenge is not successful, the arbitrated rate for the Elkview Mine may
 apply to some or all of the other four mines, depending on the outcome of
the Alberta Court of Queen's Bench action.

Regardless
of the outcome of the proceedings, rail rates for westbound coal will increase
and such increase is likely to be material. An unfavourable outcome of one or
both of the legal proceedings will also result in a material increase in rail
rates charged to the Elk Valley Coal Partnership for
westbound coal.

In
January 2005, the Elk Valley Coal
Partnership and CPR agreed to engage in a confidential
mediation/negotiation process to attempt to resolve the dispute and that process
is ongoing.  CPR has stated that the dispute is not
expected to adversely affect the shipment of coal from the Elk Valley mines.

Rail
service provided by CPR to eastern destinations from the Elk
Valley Mines is not the subject of either legal proceeding.  Rail service
in respect of the Cardinal River mine is provided by Canadian
National Railway.

Westshore
Terminals Ltd. provides ship-loading services at Roberts Bank for approximately
75% of the Elk Valley Coal Partnership's metallurgical coal pursuant to
long-term contracts.  Neptune Terminals, in which the
Elk Valley Coal Partnership has a 46.4% ownership interest, provides
ship-loading services for approximately 12% of the Elk Valley Coal Partnership's
metallurgical coal.  The remaining 13% of the Elk Valley Coal Partnership's
metallurgical

12

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coal
products are shipped from the sites to eastern North American customers either
directly by rail or by rail and ship via Thunder Bay Terminals in Thunder Bay, Ontario.
 A small amount of product is shipped by truck to customers in western Canada.

Changes
to Coal Sales Contracts

Beginning
with the 2004 coal year, approximately 95% of the Elk Valley Coal Partnership's
sales contracts are in the form of multi-year evergreen supply agreements with
customers.  Evergreen contracts allow for coal prices to be set annually,
but provide greater certainty of sales volumes, as customers are obligated to
continue to purchase coal for a number of years after notice of termination is
given by either party.  See Management's Discussion
and Analysis of Financial Condition and Results
of Operations for the year ended December
31, 2004 in the Trust's 2004 Annual Report.

The
Elk Valley Coal Partnership - The Last Three Years

Price
increases for seaborne hard coking
coal were achieved in most of Old Fording's markets for
the 2002 coal year.  However, excess supply resulted in average pricing for
the 2003 coal year decreasing by approximately 3% from 2002.  Demand for
hard coking coal strengthened in the last half of 2003 resulting in the
Elk Valley Coal Partnership sales volumes for the fiscal
year ended December 31, 2003 that were 24% higher than
sales volumes for the same mines for the fiscal year ended December
31, 2002.  Demand for seaborne
hard coking coal was strong in 2004.  Average realized price per tonne,
including the impact of foreign currency hedges, increased in 2004 by
approximately 14% to $73.10 per tonne over 2003, while
sales volumes remained unchanged from 2003 at 15.3 million tonnes.

In
view of the strength of the seaborne hard coking markets, the
Elk Valley Coal Partnership announced that it was proceeding with the
development of the Cheviot Creek pit using the
infrastructure of the Cardinal River mine.  In 2004,
the Partners approved $120 million of
capital spending to develop the pit, build a haul road, upgrade the plant and
acquire mining equipment with the goal to increase production to 2.8 million
tonnes per year.  It is anticipated that the full annual production rate
will be achieved in the third quarter of 2005.  In addition, the Partners
approved $30 million in capital expenditures to increase
the Fording River mine's capacity by about one million
tonnes to 10.5 million tonnes annually, with full capacity expected to be
achieved near the end of the second quarter of 2005.

Fording
Inc.'s capital expenditures, including its proportionate
share of Partnership Sustaining Capital Expenditures, were $73
million during 2004, of which $44
million was for the development of the Cheviot Creek pit.
 This is a substantial increase from capital expenditures of $12 million
for ten months in 2003.

Coal
Sales by Geographical Area

The
chart below sets forth coal sales information by geographical area for the last
three years:

Coal
        Sales by Area (millions of tonnes)2004(3)
      2003(2)
      2002(1)%
        of sales
      Tonnes
      %
        of sales
      Tonnes
      %
        of sales
      TonnesEurope
      32%
      7,993
      31%
      6,923
      34%
      4,151Japan
      23%
      5,801
      26%
      5,826
      28%
      3,443Korea
      13%
      3,237
      13%
      2,984
      20%
      2,453China
      5%
      1,287
      3%
      602
      -
      -Taiwan
      4%
      955
      4%
      1,050
      4%
      537South
        America
      8%
      1,899
      9%
      1,985
      5%
      679North
        America
      15%
      3,832
      14%
      3,214
      9%
      1,067Total
      100%
      25,004
      100%
      22,584
      100%
      12,330


Notes:

(1)

2002
sales are by Old Fording.

13

---

(2)

2003
sales include sales by Old Fording prior to February
28, 2003 and sales by the Elk Valley Coal Partnership
thereafter.

(3)

2004
sales are by the Elk Valley Coal Partnership (of which the Trust's
share is 65% to March 31, 2004 and 62% thereafter).

The
Elk Valley Coal Partnership - Mines and Neptune Terminals

The
following table sets forth the area, current production capacity, actual
production and known reserve life of the Elk Valley Coal Partnership's mines.

|                     | Hectares | Current
      Production Capacity(2) | Production(2) | Known
      Reserve Life(3)(years) | Date
      of Initial Operation
|-------------------- | -------- | ------------------------------------ | ------------- | ---------------------------------- | -------------------------------
|                     | Total    | Mined
      or to be Mined(1)        | Mine          | Plant                              | 2004                           
|Fording
      River  | 20,304   | 3,955                                | 10.0          | 9.5                                | 9.6                            
|Elkview              | 27,054   | 3,526                                | 6.0           | 7.0                                | 5.9                            
|Greenhills           | 10,964   | 2,155                                | 4.5           | 5.5                                | 4.9                            
|Coal
      Mountain  | 3,044    | 759                                  | 2.7           | 3.5                                | 2.5                            
|Line
      Creek     | 9,025    | 1,236                                | 2.5           | 3.2                                | 2.5                            
|Cardinal
      River | 12,489   | 2,343                                | 2.5           | 3.0                                | 0.4                            
|Total                | 82,877   | 13,974                               | 28.2          | 31.7                               | 25.8                           

Notes:

(1)

Represents
total hectares of coal lands where mining has or is scheduled to occur.

(2)

Million
tonnes of saleable coal.

(3)

Years
that reserves are projected to support mining at 2004 production rates, except
for Elkview which is based on expected capacity of 7.0
million tonnes.

Mining
Costs

Mining
and processing input costs such as fuel, steel, tires, labour and maintenance
parts and supplies can have a significant impact on the cost of producing
metallurgical coal.  In 2004, the Elk Valley Coal
Partnership experienced higher costs for operating supplies such as diesel fuel
and steel.  In addition, the recent growth in global mining activities has
created a demand for equipment and supplies that outpaces supply.  As a
result, future operations could be impacted if the Partnership experiences
difficulty obtaining equipment and supplies on a timely basis.  Lastly,
growth in the mining industry has created demand and competition for certain
skilled services.

Fording
River

The
Fording River mine is located 29 kilometres northeast of
Elkford, British Columbia.  It was constructed in 1969
as a three million tonne per year operation and has been operated continuously
since that time.  The Fording River mine was
contributed to the Elk Valley Coal Partnership by Fording
Inc. pursuant to the Arrangement.  Coal produced at
the Fording River mine is primarily metallurgical coal,
although a very small amount of thermal coal is also produced.  The
majority of current production is derived from the Eagle
Mountain pit.

The
Fording River mine's quality management system is in
compliance with the ISO 9001 quality standard and its
environmental management system is in compliance with the ISO
14001 environmental standard as verified by the Quality
Management Institute.

Elkview

The
Elkview mine is located just outside Sparwood, British
Columbia.  It was constructed in 1969 by Kaiser
Resources Ltd. and has been operating on a nearly continuous basis for over 30
years.  It was operated by Kaiser Resources Ltd. until
1980 when it was sold to BC Coal Limited, a predecessor of Westar
Mining Limited ("Westar").  The Elkview
mine was purchased by Teck Cominco from the trustee in the
bankruptcy of Westar in 1992 and has operated continuously
since 1993.  The mine was contributed to the Elk
Valley Coal Partnership by Teck Cominco pursuant to the Arrangement.
 On December 20, 2004, the Trust announced jointly with Teck Cominco, NSC
and POSCO a proposed expansion of the Elkview Mine. See "Three-Year History
- Elkview Mine Equity Interest".



14

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Coal
produced at the Elkview mine is primarily metallurgical
coal.  Lesser quantities of lower grade hard coking coal are also produced
and make up roughly 15% of the total production.  The majority of current
production is derived from seams in the area of Baldy and Natal
Ridge pit.

The
Elkview mine's quality management system is in compliance
with the ISO 9001 quality standard as
verified by the Quality Management Institute.

Greenhills

The
Greenhills mine is located eight kilometres northeast of
Elkford, British Columbia.  It was constructed in the
early 1980's by BC Coal Limited, a predecessor of Westar.
 Old FCL purchased Westar's 80%
interest in the Greenhills mine from the trustee in
bankruptcy of Westar in December 1992.

Since
1993, the Greenhills mine has operated under a joint venture agreement (the "Greenhills
Joint Venture Agreement") among Old FCL, POSCO
Canada Ltd. (POSCAN) and POSCAN's parent, POSCO.  Pursuant to the
agreement, Old FCL had an 80% interest in the joint venture
while POSCAN had a 20% interest.  As part of the Arrangement,
the 80% interest held by Old FCL was assigned to the Elk
Valley Coal Partnership.  The mine equipment and coal preparation plant are
owned by the Elk Valley Coal Partnership and POSCAN in
proportion to their respective joint venture interests.  The
Elk Valley Coal Partnership and POSCAN bear all costs and expenses incurred in
operating the Greenhills mine in proportion to their
respective joint venture interests.  POSCAN, pursuant to a property rights
grant, has a right to 20% of all of the coal mined at the Greenhills
mine from certain defined lands until termination of the Greenhills
Joint Venture Agreement on the earlier of the date the reserves on the defined
lands have been depleted or March 31,
2012.

Coal
mined at the Greenhills mine is primarily metallurgical
coal, although a small amount of thermal coal is also produced.  Production
is derived from the Cougar reserve which is divided into
two distinct pits, Cougar North and Cougar
South.  Cougar North currently
produces the majority of the coal for the mine.

The
Greenhills mine's quality management system is in
compliance with the ISO 9001 quality standard
and its environmental management system is in compliance with the ISO 14001
environmental standard as verified by the Quality
Management Institute.

Coal
Mountain

The
Coal Mountain mine is located 30 kilometres southeast of
Sparwood, British Columbia.  Old
FCL purchased the mine in 1994 from Corbin Creek Resources
Ltd. and it has been operated continuously since that time.  Corbin
Creek Resources Ltd. acquired the mine in the early 1990's from Esso
Resources Canada Ltd.  The Coal Mountain mine was
contributed to the Elk Valley Coal Partnership by Fording
Inc. pursuant to the Arrangement.  The Coal
Mountain mine produces both metallurgical and thermal coal.

The
Coal Mountain mine's quality management system is in
compliance with the ISO 9001 quality standard
as verified by the Quality Management Institute.

Line
Creek

The
Line Creek mine is located 22 kilometres north of Sparwood,
British Columbia.  The mine has operated continuously
since its start up by Crowsnest Resources Limited in 1981.
 It was acquired by the Luscar/CONSOL Joint Ventures
in 1998 and contributed to the Elk Valley Coal Partnership
by Fording Inc. pursuant to the Arrangement.



15

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The
Line Creek mine produces both metallurgical and thermal
coal.  After taking over the management of the Line
Creek mine in 2003, the Elk Valley Coal Partnership
implemented changes to the mining plan to reduce production costs.  These
changes resulted in a reduction in the annual production from the mine to
approximately two million tonnes and, as a consequence, the workforce was
reduced by approximately 40% to 290 employees.  In response to improvements
in the metallurgical coal markets in 2004, the mine plan was altered and
production was increased to 2.5 million tonnes annually.

Cardinal
River

The
Cardinal River mine is located 42 kilometres south of
Hinton, Alberta and is comprised of the Luscar
mine and the Cheviot Creek pit.  The Luscar
mine commenced operations in 1970.  It has been owned continuously since
its start up by the Luscar/CONSOL Joint Ventures and their
predecessors.  The Luscar mine and Cheviot
Creek pit were contributed to the Elk Valley Coal
Partnership by Fording Inc. pursuant to the Arrangement.

In
March 2004, the Partners approved the
development of the Cheviot Creek pit in response to the
demand for high quality coking coal.  In total, $120
million in capital spending was approved to build a haul road, develop the pit,
refurbish the plant and acquire mining equipment in order to produce 2.8 million
tonnes on an annual basis.  All licenses and approvals have been received,
although legal proceedings are underway, challenging the issue of certain
environment authorizations.  See "Legal Proceedings - Cardinal River
Operations".  Initial coal production began in the
fourth quarter of 2004.  It is anticipated that the full annual production
rate will be achieved in the third quarter of 2005.

Pursuant
to the Arrangement, employee severance costs and reclamation obligations for
mining activities at the Cardinal River mine prior to March
1, 2003, are the responsibility of the Luscar/CONSOL Joint
Ventures.  In June of 2004, Fording Inc. and the Elk
Valley Coal Partnership entered into an agreement with the Luscar/CONSOL
Joint Ventures to assume these obligations in exchange for a cash payment.

Production
of Mines Under Prior Ownership

Prior
to being contributed to the Elk Valley Coal Partnership pursuant to the
Arrangement, the Elkview mine was operated by Teck Cominco and the Line Creek
and Cardinal River mines were operated by Luscar.

Production
at the Elkview mine was 5.5, 5.5 and 4.0 millions of tonnes of coal for the
years 2002, 2001 and 2000 respectively.  Production at the Line Creek mine
was 3.0, 2.8 and 2.6 millions of tonnes of coal for the years 2002, 2001 and
2000 respectively.  Production at the Cardinal River mine was 2.1, 3.0, and
2.7 millions of tonnes of coal for the years 2002, 2001 and 2000 respectively.

The
Elk Valley Coal Partnership - Neptune Terminals

The
Elk Valley Coal Partnership holds a 46.4% interest in Neptune,
the corporation that owns Neptune Terminals.  Neptune
Terminals is a multi-product bulk handling port facility located at North
Vancouver, British Columbia, which is
owned by its users.  Neptune Terminals has a long-term
lease with the Vancouver Port Authority which expires on
December 31, 2026.  Shippers can access the Neptune
Terminals facilities from the Canadian National rail system
and, through interconnection, with the CPR system.  By
agreement among the shareholders of Neptune, rates charged
for the handling of coal and other products are based on
the actual costs allocated to the handling of each product.

Neptune's
shareholder agreement requires that its shareholders guarantee their respective
interest in, the outstanding bank indebtedness of Neptune.
 At December 31, 2004, the Elk
Valley Coal Partnership's proportionate interest in this guarantee was
approximately $10 million.  In addition, the Elk
Valley Coal Partnership's share of Neptune's asset
retirement obligations is $7 million.



16

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NYCO

Overview

NYCO
consists of NYCO Minerals, Inc. ("NYCO
Minerals") with operations at Willsboro, New York, Minera
NYCO S.A. de C.V. ("Minera") with operations near
Hermosillo in the northwestern state of Sonora, Mexico and American
Tripoli, Inc. ("American Tripoli")
with operations near Seneca, Missouri.

NYCO
- The Last Three Years

The
principal factor that has affected NYCO over the last three
years is the oversupply of its principal product, wollastonite.  NYCO
Minerals and Minera compete primarily with producers in India,
China and Europe, as well as with producers of substitute
industrial minerals.  Since 1996, aggressive competition from other
producers, particularly in China, has resulted in
significant weakening of commodity prices, especially in low-value products.

This
trend continued into 2002 and sales of industrial minerals declined as NYCO
Minerals and Minera exited lower-priced markets.  As a
result, lower sales volumes were partially offset by higher average sales
prices.  Sales of low-value wollastonite products continued to face intense
competition in 2003, but sales of high-value wollastonite products for the
automotive and industrial coatings industries increased as manufacturers
continued to convert traditional metal components to plastic.

Due
to a history of operating losses and uncertainty around future improvement, Old
Fording updated its assessment of the recoverability of its investment in assets
related to the Minera operation following completion of the
2002 fiscal year.  Projections of undiscounted future net cash flows
generated by these assets were less than their carrying values and as a result, Old
Fording wrote down these assets by $140 million in 2002 to
their estimated fair market value.

Throughout
this period, NYCO has worked to stabilize its position in
key markets and improve marketing, sales and distribution networks by focusing
on new and higher-value products.  Research and development focused on
those products and applications for which the unique characteristics of
wollastonite would add significant value as a replacement for competitive
materials like glass fibre, talc and mica.  The marketing initiatives also
included the development and roll out of a new strategy to more effectively
brand, position and raise awareness of NYCO Mineral's and
Minera's extensive range of wollastonite products.

Annual
sales of wollastonite totalled 82,000 tonnes in 2004, an 11% increase from the
previous year, while sales of tripoli increased by 5% to 11,300 tonnes.
 NYCO has seen a strengthening in results due to higher energy costs that
drove up prices for competing products, a lower U.S. dollar
that generated pricing advantages against the Euro and the
impact of higher bulk shipping costs on wollastonite competitors from China
and India.

In
2002, analyses of some of the wollastonite product produced and shipped from the
Willsboro facility indicated the presence of small
quantities of asbestiform tremolite at levels giving rise to certain labelling
requirements in Canada and other
jurisdictions, not including the United States.  The
source of asbestiform tremolite was traced to one of several ore sources
supplying the operation and this ore source was segregated from Willsboro's
mining operations.  Product testing conducted by the Willsboro
operation since segregation of the ore source indicates only trace levels of
asbestiform tremolite in some product shipped.  Fording
Inc. is not aware of any labelling or disclosure requirements relating to these
trace levels.  Independent analyses of on-going airborne particle sampling
at the Willsboro operation indicate that the air quality
meets the applicable standards mandated by the U.S. Mine
Safety and Health Administration and the U.S. Occupational
Safety and Health Administration.  Product testing at Minera
indicates no detectable levels of asbestiform mineral.

NYCO
- Mines and Processing Facilities

NYCO
Minerals

NYCO
Minerals and its predecessors have owned the Willsboro
operation since purchasing it from Interpace Corporation in
1979.  NYCO Mineral's processing plant is located in
Willsboro, New York and the mine is located 22 kilometres
west of the plant.  The processing facilities include dry processing
equipment, a surface treatment plant, warehouse space and truck and rail loadout
facilities.  The mining operation consists of the active Lewis
Pit and the permitted Oak Hill deposit located about 1.6
kilometres from the Lewis Pit.  The minesites are comprised of 289 hectares
of wollastonite lands that are held through direct ownership or controlled
through mineral leases.  Approximately 43 hectares of these lands are
currently being mined or are scheduled for mining.



17

---



NYCO
Mineral's primary product is wollastonite.  It is extracted using shallow
open-pit mining techniques and trucked to the Willsboro
processing plant.  In 2004, NYCO Minerals produced
52,000 tonnes of wollastonite (43,900 tonnes in 2003 and 49,500 tonnes in 2002).
 The current annual production capacity of the processing plant is 120,000
tonnes of wollastonite and the current annual production capacity of the mine is
300,000 tonnes of wollastonite ore.  The current mine plan contemplates the
production of wollastonite from this property for in excess of 30 years at 2004
production rates.  NYCO Mineral's products are
marketed through a network of distributors, agents and direct sales personnel.

NYCO
Mineral's quality management system is in compliance with the ISO
9001:2000 quality standard as verified by Intertek Systems
Certification.

Minera

Minera
was developed by a subsidiary of Old Fording and commenced
operations in 1998.  Minera's processing facilities,
truck loadout and mine are located approximately 50 kilometres northwest of Hermosillo,
Sonora, Mexico.  The processing
facilities include wet and dry processing plants, a surface treatment plant,
warehouse space and truck loadout facilities.  In addition, a warehouse and
a rail loadout facility are located in Hermosillo.
 The minesite is comprised of 1,855 hectares of surface lands and mining
concessions of which approximately 100 hectares are currently being mined or are
scheduled for mining.

Minera's
primary product is wollastonite.  Wollastonite ore is
extracted using open-pit mining techniques for processing at the on-site
processing facilities.  In 2004, the Minera operation
produced 28,100 tonnes of wollastonite (31,200 tonnes in 2003 and 29,200 tonnes
in 2002).  The current annual production capacity of the processing
facilities is 150,000 tonnes of wollastonite and the current annual production
capacity of the mine is 240,000 tonnes.  Reserves at Minera
are sufficient to support annual production of 240,000 tonnes for in excess of
50 years.  Minera's products are marketed through a
network of distributors, agents and direct sales personnel.  Minera
contracts with an affiliate, Nycomex S.A. de C.V.,
for the supply of labour.

Minera's
quality management system is in compliance with the ISO
9001:2000 quality standard and the ISO 14001:1996
environmental standard as verified by the Quality
Management Institute.

American
Tripoli

American
Tripoli is a wholly owned subsidiary of NYCO Minerals.
 It was acquired by NYCO Minerals from Interpace
Corporation in 1979.  American Tripoli's primary
product is tripoli.  It is extracted using open-pit mining techniques and
trucked to American Tripoli's processing located in
Seneca, Missouri.  The processing facilities include a
processing plant and drying shed.  The minesite is located approximately 12
kilometres northwest of Seneca in Ottawa County, Oklahoma.
 The minesite is comprised of 1,168 hectares of fee simple lands of which
approximately 14 hectares are currently being mined or are scheduled for mining.

In
2004, American Tripoli produced approximately 11,200 tonnes
of tripoli (10,700 tonnes in 2003 and 12,700 tonnes in 2002).  The current
annual production capacity of the mine and processing facility is 22,500 tonnes
and 31,500 tonnes, respectively.  The current mine plan for American
Tripoli contemplates the production of tripoli from this property for at least
the next 30 years at 2004 production rates.  American
Tripoli directly markets a variety of abrasive products to the construction and
manufacturing industries for use in buffing and polishing applications.

RESERVES
AND RESOURCES

Reserves
and resources of the Elk Valley Coal Partnership and NYCO
as at December 31, 2004, have been estimated internally by
the Elk Valley Coal Partnership's engineers and geologists in accordance with
the National Instrument, under the
supervision of C.J. McKenny, a professional geologist and
the Elk Valley Coal Partnership's Manager, Energy
Resource Planning.  Mr. McKenny is a "qualified
person" for the purposes of the National
Instrument.  Estimates are reviewed and updated periodically to reflect new
data from mining experience, drilling results and analysis.



18

---



The
Trust is subject to the provisions of the National
Instrument with respect to the manner in which it reports reserves and resources
and it is also subject to United States securities laws.
 Accordingly, in this section, reserves and resources have been presented
in tabular form in accordance with the National
Instrument and a paragraph has been included after each reserve table reporting
such information in accordance with SEC
Guide 7.

Terminology

With
respect to coal, Part One of Appendix "C" to this
document contains the definitions ascribed by the Geological Survey of Canada
Paper 88-21, "A Standardized Coal Resource/Reserve Reporting System for Canada"
(the "GSC Standards") to the terms
"Reserve", "Resource", "Proven",
"Probable", "Measured", "Indicated"
and "Inferred", which are applicable to reporting coal
deposits in accordance with the National
Instrument.

With
respect to minerals other than coal, Part Two of Appendix
"C" to this document contains the definitions ascribed by the Canadian
Institute of Mining, Metallurgy and Petroleum Standards in "The CIM Definition
Standards on Mineral Resources and Mineral Reserves", adopted August
20, 2000 (the "CIM Standards"), to
the terms "Reserve", "Resource",
"Proven", "Probable", "Measured",
"Indicated" and "Inferred",
which are applicable to reporting mineral deposits (other
than coal) in accordance with the National
Instrument.

Part
Three of Appendix "C" to this document contains the
definitions ascribed by SEC Guide 7 to
the terms "Reserve", "Proven Reserves" and "Probable
Reserves", which are applicable to the reporting by the Trust
of mineral reserves, including coal, when being reported on in accordance with SEC
Guide 7.  Unlike the National
Instrument, SEC Guide 7 does not
recognize the reporting of mineral deposits which do not meet the definition of
"Reserve" contained in such guide.

Assumptions

Feasibility
studies assume technological and economic conditions prevailing at the time the
study is prepared.  Coal Reserves are coal quantities that are anticipated
to be mineable, based on feasibility studies, utilizing existing technology,
under prevailing economic conditions and which have no legal impediments to
mining.  The price of metallurgical coal assumed in connection with the
determination of coal Reserves is approximately $53 per
tonne FOB (free on board) at Westshore Terminals Limited
Roberts Bank export terminal.

Coal
Reserves are reported in millions of
metric tonnes of clean coal (i.e., tonnage remaining after mining and processing
losses but including coal used in coal preparation plant operations).  Coal
Resources are reported in millions of metric tonnes in the ground before
recovery through mining and without the application of recovery factors.

Geological
Setting and Mineralization

Elk
Valley Area

Some
of the oldest rock strata present are the Rundle Group limestones located on the
west bank of the Fording River.  They are in faulted contact with the
Kootenay Group to the west and in uncomfortable contact with the Rocky Mountain
Formation quartzites to the north.  The Fernie Formation shales occur
throughout the area, generally along the sides of the valleys on the lower
flanks of the mountains.  The Morissey Formation is known locally as the
"basal sandstone" of the Kootenay Group.  It is the prominent
cliff-forming marker horizon in many locations.  On the top of the Fording
River property, the top of Moose Mountain member, the Morissey Formation, is in
sharp contrast to the lowermost bed of the Mist Mountain Formation.

The
coal fields in the Elk Valley region of British Columbia
have supported coal mining for decades.  Coal is contained within the
sedimentary Mist Mountain Formation of the lower cretaceous Kootenay Group.
 The Mist Mountain sediments were involved in the mountain building
movements of the late cretaceous to early tertiary Laramide orogeny and are
approximately 500 metres thick, with the depth of burial ranging from zero to
1,500 metres.  The major structural features are north-south trending
synclines with near horizontal to steep westerly dipping thrust faults and a few
high angle normal faults.  This has allowed for the Mist Mountain sequence
to be repeated throughout the Elk Valley.



19

---



Over
13 coal seams are considered to be economic, consisting of medium to high
volatile bituminous coal that is primarily of metallurgical quality, with minor
amounts of thermal quality coal along the seam outcrops.  The coal seams
are characterized by high alginate content and are referred to as "needle"
coal.  They vary in thicknesses up to 12 metres and are generally overlain
comfortably by strata of the Elk Formation.  This formation is commonly a
succession of sandstones, shales, siltstones, mudstones, chert pebble
conglomerates and the coal seams.

Cardinal
River

The
Cheviot Creek pit is close to the western margin of the
original sedimentary basin responsible for coal deposition.  This strata
has been subjected to deformation from tectonic forces, creating either complex
faulted or folded anticlinal and synclinal structures or repeated sequences from
low angle thrust faults.  The coal bearing Luscar Group is of lower
cretaceous age and is marked at the base by the Cadomin Conglomerate, a
resistant unit easily identified in outcrops.  Overlying the Cadomin
Conglomerate is the Gladstone Formation, dominated by shales and siltstones.
 It is the equivalent to the coal bearing Gething Formation found in
northeastern British Columbia.  Above the Gladstone
Formation is the Moosebar Formation, composed of marine shales, siltstones,
carbonates and shaley coal horizons.  The overlying Gates Formation is
divided into three members; the Torrens (sandstones and torrens coal marker),
Grande Cache (siltstone, shales, coal) and Mountain Park (sandstone).  Above
the Gates Formation are the recessive marine shales of the Blackstone Formation.
 The Luscar Group of sediments in the Cheviot mine is
exposed within a broad synclinal basin in which dominant low angle thrust
faulting effectively repeats geologic successions throughout the property.

NYCO

It
is generally accepted there are two methods for the formation of commercial
deposits of wollastonite.  Both involve heat and pressure that alter
limestones.  In silica bearing limestones, silca and calcite react to form
wollastonite.  Wollastonite can also form by the
passage of highly siliceous hydrothermal solutions through limestone beds or
zones.  Heated groundwater dissolves large amounts of silicate.  Hot
silicate laden water migrates into surrounding limestone beds where the silica
precipitates and carbon dioxide is carried out of the deposit.  Wollastonite
precipitates and slowly forms characteristic wollastonite crystal structures in
what was formerly limestone.

The
Elk Valley Coal Partnership - Reserves and Resources

All
coal Reserves and Resources in the
following tables are mineable using conventional open-pit mining methods.

Proven
and Probable Coal Reserves

The
following table sets forth the Elk Valley Coal Partnership's Proven
and Probable coal Reserves at December
31, 2004.  All of the reserves are bituminous coal.



20

---



COAL
        RESERVES
        As At December 31, 2004
        (millions of tonnes)(1,3)Rank
      Proven
      Probable
      Total
      Ownership
        (%)(2)
      Calorific
        Value kJ/kg
      Sulphur
        %
        (by wt.)Metallurgical
        CoalFording
        River
      145
      112
      257
      L
        100
      32,600
      0.62%Greenhills
      91
      7
      98
      FS
        100
      32,600
      0.62%Coal
        Mountain
      27
      1
      28
      L
        100
      29,900
      0.35%Elkview
      184
      65
      249
      FS
        100
      32,200
      0.38%Line
        Creek
      17
      -
      17
      L
        100
      32,200
      0.46%Cardinal
        River
      36
      25
      61
      FS/L
        5/95
      32,700
      0.38%Total
        Metallurgical
      500
      210
      710Thermal
        CoalLine
        Creek
      3
      -
      3
      L
        100
      26,500
      0.35%Total
        Thermal
      3
      
      3


Notes:

(1)

Reserves
are reported exclusive of interests of third parties except at Greenhills
where Reserves are reported inclusive of POSCAN's
interest.  For a description of POSCAN's interest, see "Description
of the Business - the Elk Valley Coal Partnership - Greenhills".
 Reserve numbers are rounded and exclusive of
resources.

(2)

Ownership
of the coal Reserves is described as "FS" for fee
simple or "L" for leasehold.  If the Reserves are
not entirely fee simple or not entirely leasehold, the ratio of the percentage
of fee simple holdings to the total holdings and the leasehold holdings to the
total holdings is presented as FS%/L%.

(3)

See
definitions in Appendix "C".

Had
these Proven and Probable coal Reserves
been determined in accordance with SEC
Guide 7, they would have been the same as those determined in accordance with
the National Instrument as presented
in the above table.  In 2004, the Partnership had all
necessary material and non-routine permits and licenses required to mine the Reserves
attributed to the above noted mines.  For information as to how the
Elk Valley Coal Partnership holds its interest in the lands in which Reserves
are situated, see "The Elk Valley Coal Partnership - Reserves and Resources
- Real Property".

The
Trust has sufficient surface rights for mining operations,
as well as the availability of power, water, mining personnel, potential
tailings storage areas and potential waste disposal areas.



22

---



Measured
and Indicated Coal Resources

The
following table sets forth the Elk Valley Coal Partnership's coal Resources,
all of which are bituminous, as at December 31, 2004:

COAL
        RESOURCES
        As At December 31, 2004
        (millions of tonnes)(1,4)Rank
      Measured(4)
      Indicated(4)
      Total(4)
      Ownership(2)
      Calorific
        Value kJ/kg(4)
      Sulphur
        %
        (by wt.)(4)Metallurgical
        CoalFording
        River
      460
      194
      654
      L
      30,200
      0.62%Greenhills
      5
      325
      330
      FS
      30,200
      0.62%Coal
        Mountain
      66
      41
      107
      L
      28,600
      0.35%Elkview
      1,318
      308
      1,626
      FS
      30,200
      0.38%Line
        Creek
      59
      153
      212
      L
      30,200
      0.46%Cardinal
        River
      2
      9
      11
      FS/L
        5/95
      30,200
      0.38%Other(3)
      213
      274
      487
      L
      30,200
      0.60%Total
        Metallurgical
      2,123
      1,304
      3,427Thermal
        CoalLine
        Creek
      5
      24
      29
      L
      25,000
      0.35%Total
        Thermal
      5
      24
      29


Notes:

(1)

Coal
Resources are reported in millions of
metric tonnes in the ground before recovery through mining and without the
application of recovery factors. Resources are reported exclusive of interests
of third parties except at Greenhills where Resources are reported inclusive of
POSCAN's interest.  For a description of POSCAN's interest, see "Description
of the Business - the Elk Valley Coal Partnership - Greenhills".
 Resource numbers are rounded and exclusive of resources. Reserves
are not included in Resources.  Resources
do not have demonstrated economic viability.

(2)

Ownership
of the coal Resources is described as "FS" for fee
simple holdings or "L" for leasehold holdings.  If the Resources
are not entirely fee simple or not entirely leasehold, the ratio of the
percentage of fee simple holdings to the total holdings and the leasehold
holdings to the total holdings is presented as FS%/L%.

(3)

"Other"
includes non-operating coal properties, such as Elco, Mt. Duke,
Gregg River, Muskiki and Quintette.

(4)

See
definitions in Appendix "C".

Although
the terms "Measured Resources" and
"Indicated Resources" are recognized by the National
Instrument, they are not recognized by the United States
Securities and Exchange Commission.  Investors should not assume that all
or any part of the mineral deposits identified as "Measured"
or "Indicated" will ever be classified as Reserves.
 SEC Guide 7 only permits the
quantification of coal deposits in public reports that meet the definition of
"Reserves".  However, the National
Instrument permits the quantification of Resources in
disclosure documents and the Trust has elected to include
such information in this document.  In previous disclosure documents filed
in the United States, Old Fording has
referred to Resources as "non-reserves".

Inferred
Coal Resources

The
following table sets forth the Elk Valley Coal Partnership's Inferred
Resources for coal as at December 31, 2004, all of which
are bituminous:

INFERRED
        COAL RESOURCES
        As At December 31, 2004  (millions of tonnes)(1,3)Rank
      Inferred
        ResourcesMetallurgical
        CoalFording
        River
      2,721Greenhills
      650Coal
        Mountain
      24Elkview
      181Line
        Creek
      110Cardinal
        River
      4Other(2)
      473Total
        Metallurgical
      4,163Thermal
        CoalLine
        Creek
      10Total
        Thermal
      10


Notes:

(1)

Coal
Resources are reported in millions of
metric tonnes in the ground before recovery through mining and without the
application of recovery factors.  Resources are reported exclusive of
interests of third parties except at Greenhills where Resources are reported
inclusive of POSCAN's interest.  For a description of POSCAN's
interest, see "Description of the Business - the Elk Valley Coal
Partnership - Greenhills".  Resource numbers are rounded.
Reserves are not included in Resources.  Resources
do not have demonstrated economic viability.

(2)

"Other"
includes non-operating coal properties, such as Elco, Mt
Duke, Muskiki , Gregg River and Quintette.

(3)

See
definitions in Appendix "C".

Although
the term "Inferred Resource" is recognized by the National
Instrument, it is not recognized by the United States
Securities and Exchange Commission.  "Inferred
Resources" have a great amount of uncertainty as to their existence and
economic and legal feasibility.  Investors should not assume that all or
any part of an "Inferred Resource" exists or will ever
be upgraded to a higher category or be economically or legally mineable.  SEC
Guide 7 only permits the quantification of coal deposits in public reports that
meet the definition of "Reserves".  However, the National
Instrument permits the quantification of Inferred Resources
in disclosure documents and the Trust has elected to
include such information in this document.  In previous documents filed in
the United States, Old Fording has
referred to Inferred Resources as "non-reserves".



23

---



Changes
in Reserves and Resources

The
following tables set forth the changes in the Elk Valley Coal Partnership's coal
Reserves and Resources during 2004.  The changes are
categorized as "production", "additions" or "deletions" to Reserves
and Resources as at December 31, 2004:





Notes:

(1)

Coal
Reserves are reported in millions of
metric tonnes of clean coal (i.e., tonnage remaining after mining and processing
losses but including coal used in plant operations).  Reserves
are reported exclusive of interests of third parties except at Greenhills
where Reserves are reported inclusive of POSCAN's
interest.  For a description of POSCAN's interest, see "Description
of the Business - the Elk Valley Coal Partnership - Greenhills".
 Reserve numbers are rounded and exclusive of resources.

(2)

Coal
Resources are reported in millions of
metric tonnes in the ground before recovery through mining and without the
application of recovery factors.  Resources
are reported exclusive of interests of third parties except at Greenhills where
Resources are reported inclusive of POSCAN's interest.  For a description
of POSCAN's interest, see "Description of the Business - the Elk Valley
Coal Partnership - Greenhills".  Resource numbers are rounded.
Reserves are not included in Resources.  Resources do not have demonstrated
economic viability.

(3)

Significant
Changes to Reserves include:

Proven:
net gain of 7.4 million tonnes metallurgical and 2.1 million tonnes thermal at
Line Creek mine due to addition of two new pits (two seam pit at Burnt Ridge South).
 Addition of 1.9 million tonnes metallurgical coal at Fording
River mine; negative adjustment of 4.0 million tonnes metallurgical coal to
Elkview mine (geological revisions) .

Significant
Changes to Resources include:

Measured:
transfer of 2.9 million tonnes in situ to proven reserves at Fording
River mine;

Indicated:
Cardinal River mine - positive adjustment of 2.8 million
tonnes due to reconciliation;

Inferred:
Cardinal River mine - positive adjustment of 3.9 million
tonnes due to reconciliation.

(4)

Tonnage
below 500,000 tonnes is shown as (0) million tonnes.

(5)

See
definitions in Appendix "C".

Exploration
and Development Activities

In
2004, the Elk Valley Coal Partnership spent approximately $1.7
million on the exploration of areas outside of its active mining areas.
 These activities were directed at refining mine plans to best exploit
reserves scheduled for future development.  In addition, a substantial
amount of routine drilling was undertaken in active mining areas as part of
normal operations and was expensed as such.  No material exploration was
conducted on any of the Elk Valley Coal Partnership's undeveloped properties
in 2004.

Drilling
activity in 2004 totalled 34,432 metres for exploration, development and
production planning purposes.  All drilling, logging and sampling
activities were conducted under a combination of ISO
quality standards, the material testing standards established by the American
Society for Testing Materials and the Elk Valley Coal Partnership's internal
standards.



24

---



Of
the total metres drilled, 20,453 metres represented drilling conducted at all
minesites within current pit boundaries for short to medium range planning
purposes.  The remaining 13,979 metres were drilled as part of programs
conducted by the Coal Mountain and Line
Creek mines on coal lands adjacent to those operations that were contributed to the
Elk Valley Coal Partnership by Teck Cominco and Old
Fording.  The drilling provided additional information about the quantity
and quality of coal Resources that may be available to
extend the life of the Coal Mountain and Line
Creek mines.  Further drilling programs are planned for 2005.

Real
Property

The
following chart lists significant coal rights held by the
Elk Valley Coal Partnership as at December 31, 2004:

Mineral
        Holdings
        (thousand hectares)
      Fee
        Simple
      Crown
        Lease
        and License
      TotalCoal
        British
        Columbia
        Alberta
      39
        1
      67
        49(2)
      106
        50All
        Mines and Minerals except
        Petroleum
        & Natural Gas
        British
        Columbia
      10
      -
      10Total(1)
      50
      116
      166


Notes:

(1)

Numbers
have been rounded.

(2)

The
reduction in Alberta mineral holdings from 65.8 thousand
hectares in 2003 to 49 thousand hectares in 2004, is to correct an error that
resulted in the inclusion of certain mineral holdings were to be transferred to
Luscar pursuant to the Arrangement as coal rights held by the Elk Valley Coal
Partnership as of December 31, 2003.

In
British Columbia, coal licenses are issued for one-year
terms and have an initial cost of $7 per hectare,
increasing by $5 per hectare every five years to a maximum
of $30 per hectare.  The Elk
Valley Coal Partnership currently pays license fees ranging from $7
to $30 per hectare.  Coal leases are granted for
periods of 30 years and have an annual cost of $10 per
hectare.  In Alberta, Crown leases are granted by the
provincial government and are generally issued for 15 years.  Annual lease
rentals are approximately $4 per hectare.  In the
past, renewals of these licences and leases have generally been granted although
there can be no assurance that this will continue in the future.

Five
of the Elk Valley Coal Partnership's six coal mines operate in British
Columbia and are therefore subject to mineral taxes.  British Columbia
mineral tax is a 2-tier tax with a minimum rate of 2% and a maximum rate of 13%.
 A minimum tax of 2% applies to operating cash flows, as defined by the
regulations.  A maximum tax rate of 13% applies to cash flows after taking
available deductions for capital expenditures and other permitted deductions.
 For a discussion of mineral taxes see Management's Discussion
and Analysis of Financial Condition and Results
of Operations for the year ended December
31, 2004 in the Trust's 2004 Annual Report.

NYCO
- Reserves and Resources

Proven
and Probable Industrial Mineral Reserves

The
following table sets forth Fording Inc.'s Proven
and Probable Reserves of wollastonite and tripoli as at December
31, 2004:

INDUSTRIAL
        MINERAL RESERVES
        As At December 31, 2004 (millions of tonnes)(1,3)Minerals
      Proven(4)
      Probable(4)
      Total(4)
      Grade(2)WollastoniteNYCO
        Minerals
      5
      1
      6
      54.5%Minera
      20
      85
      105
      54.8%Total
        Wollastonite
      25
      86
      111
      -Total
        Tripoli
      2
      -
      2
      94-98%


Notes:

(1)

Wollastonite
and tripoli Reserves are reported in
millions of metric tonnes in the ground before recovery through mining and
without application of recovery factors.  Reserves
are reported exclusive of interests of third parties.



25

---



(2)

All
grades are reported as a percentage (by weight) of material.  For
wollastonite, it is percentage of CaSi03
(wollastonite).  For tripoli, it is reported as a percentage SiO2
(silicon dioxide).

(3)

Numbers
have been rounded.

(4)

See
definitions in Appendix "C".

Had
the above industrial mineral reserves been determined in accordance with SEC
Guide 7, they would have been the same as those determined in accordance with
the National Instrument.  In 2004,
Fording Inc. and its subsidiaries had all necessary permits which are required
to mine the tonnes attributed to Reserves.

Measured
and Indicated Industrial Mineral Resources

The
following table sets forth Fording Inc.'s industrial
mineral Resources (consisting of "Measured
Resources" and "Indicated
Resources") of wollastonite and tripoli as at December
31, 2004:

INDUSTRIAL
        MINERAL RESOURCES
        As At December 31, 2004
        (millions of tonnes)(1)(3)Minerals
      Measured
      Indicated
      Total
      Grade(2)WollastoniteNYCO
        Minerals
      1
      2
      3
      54.5%Minera
      -
      -
      -
      -Total
        Wollastonite
      1
      2
      3
      -Total
        Tripoli
      -
      -
      -
      -


Notes:

(1)

Wollastonite
and tripoli Resources are reported in
millions of metric tonnes in the ground before recovery through mining and
without application of recovery factors.  Resources
are rounded and reported exclusive of interests of third parties.  Reserves
are not included in Resources.  Resources
do not have demonstrated economic viability.

(2)

All
grades are reported as a percentage (by weight) of material.  For
wollastonite, it is percentage of CaSi03 (wollastonite).
 For tripoli, it is percentage SiO2 (silicon dioxide).

(3)

See
definitions in Appendix "C".

Although
the terms "Measured Resources" and
"Indicated Resources" are
recognized by the National Instrument,
they are not recognized by the United States Securities and
Exchange Commission.  Investors should not assume that all or any part of
the mineral deposits identified as "Measured" or "Indicated"
will ever be classified as Reserves.  SEC
Guide 7 only permits the quantification of mineral deposits in public reports
that meet the definition of "Reserves".  However,
the National Instrument permits the
quantification of Resources in disclosure documents and the
Trust has elected to include such information in this
document.  In previous disclosure documents filed in the United
States, Old Fording has referred to Resources
as "non-reserves".



26

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Changes
in Reserves and Resources

The
following tables set forth the changes in Fording Inc.'s
industrial mineral Reserves and Resources
during 2004.  The changes are categorized as "production", "additions"
or "deletions" to Reserves and Resources
as at December 31, 2004:

Changes
        in Reserves and Resources - Industrial Minerals
        (millions of tonnes(2,3))Reserves
      ResourcesMineral
        Type
      Proven
      Probable
      Total
      Measured
      Indicated
      TotalWollastonite(1)(U.S.A.)December
        31, 2003
      5
      1
      6
      1
      2
      2Additions
          Production (2)  Deletions (2)
      -
        (0)
        (0)
      -
        -
        -
      -
        (0)
        (0)
      -
        -
        -
      -
        -
        -
      -
        -
        -December
        31, 2004
      5
      1
      6
      1
      2
      2Wollastonite(1)(Mexico)December
        31, 2003
      20
      85
      105
      -
      -
      -Additions
          Production (2)  Deletions (2)
      -
        (0)
        -
      -
        -
        -
      -
        (0)
        -
      -
        -
        -
      -
        -
        -
      -
        -
        -December
        31, 2004
      20
      85
      105
      -
      -
      -Tripoli(1)December
        31, 2003
      2
      -
      2
      -
      -
      -Additions
          Production (2)  Deletions(2)
      -
        -
        -
      -
        -
        -
      -
        -
        -
      -
        -
        -
      -
        -
        -
      -
        -
        -December
        31, 2004
      2
      -
      2
      -
      -
      -


Notes:

(1)

Wollastonite
and tripoli Reserves are reported in
millions of metric tonnes in the ground before mining without application of
recovery factors.  Reserves are
reported exclusive of interests of third parties.  Reserves
are not included in Resources and the numbers are rounded.

(2)

Production/Deletions
below 500,000 tonnes is shown as (0) million tonnes.

(3)

See
definitions in Appendix "C".

Exploration
and Development Activities

In
2004, NYCO did not conduct any exploration activities
outside of its active industrial minerals mining areas.

Real
Property

The
following chart lists significant mineral rights held by NYCO
as at December 31, 2004:

|Mineral
      Holdings
      (thousand hectares)                              | Fee
      Simple  | Crown
      Lease
      and License | Total            
|----------------------------------------------------------------------------- | ----------------- | ----------------------------------- | -----------------
|All
      Mines and Minerals
      New
      York
      Oklahoma
      Mexico | 2
      1
      - | -
      -
      9                   | 2
      1
      9
|Total                                                                         | 3                 | 9                                   | 12               



Properties
in the U.S. are fee simple lands or freehold leases under
which royalties are paid to third parties.  Mineral rights in Mexico
are granted by the government through the issuance of exploration and
exploitation permits.  Exploration permits have annual fees of
approximately $2 per hectare and are issued for six years.
 At the end of six years, they must be converted into exploitation permits
or they revert to the government.  Exploitation permits are issued for 50
years.  Annual fees for exploitation permits escalate based upon the number
of years for which that the exploitation permit has been granted and the amounts
are adjusted annually by the Mexican government.  Fees for the Minera
operation currently range from US$4.50 - $16
per hectare at current exchange rates.  Minera does
not have any exploration permits and operations are conducted entirely in
reliance on exploitation permits.



27

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RISK
FACTORS

The
discussion of certain relevant risk factors is contained in Management's
Discussion and Analysis of Financial Condition and Results
of Operations for the year ended December
31, 2004 which forms part of the Trust's 2004 Annual
Report.  An investment in the Units involves numerous risks and
uncertainties and investors and potential investors are strongly encouraged to
review the aforementioned risk factors as well as the Trust's other disclosure
documents.

OTHER
INFORMATION REGARDING THE TRUST

Environment,
Health & Safety

Environmental
Protection

In
2004, to the knowledge of the Trust, neither the
Elk Valley Coal Partnership nor Fording Inc. incurred any material remediation
expenses or any material fines relating to non-compliance with applicable
environmental laws.  Further, to the knowledge of the Trust,
neither the Elk Valley Coal Partnership nor Fording Inc.,
or any of their respective subsidiaries, is presently a party to any
governmental or regulatory investigations or proceedings where it is alleged
that it is in material violation of any environmental laws.  In the past, a
small number of minor accidental discharges, releases, leaks and other
environmental incidents have occurred in the course of operations.  Such
occurrences have been reported to the relevant government agencies and
remediated as required, but such occurrences have not had a material adverse
effect upon the Trust.

To
effectively oversee the environmental programs of the Elk Valley Coal
Partnership, an internal senior management committee has been created, known as
the Environmental, Health, Safety and Risk Management
Committee ("EHSRMC").  The EHSRMC,
which includes management of both Teck Cominco and the Elk
Valley Coal Partnership, meets at least quarterly to review environmental
reports and audits from the minesites and to implement new programs and
procedures as required.

Reclamation
Activities

The
Elk Valley Coal Partnership has significant long-term liabilities relating to
mine reclamation and end-of-mine closure costs, known as asset retirement
obligations.  In addition, Fording Inc. has asset
retirement obligations in respect of NYCO and Neptune
Terminals.

The
Trust recognizes asset retirement obligations in the
period in which they are incurred if a reasonable estimate of fair value can be
determined.  The fair value of the estimated asset retirement costs is
capitalized as part of the carrying amount of the long-lived asset when incurred
and amortized to earnings over the asset's estimated useful life.
 Increases in the asset retirement obligations resulting from the passage
of time are recorded as accretion expenses.  Actual expenditures incurred
are charged against the accumulated obligation.  The asset retirement
obligation is reviewed by management annually and revised for changes in future
estimated costs and regulatory requirements.  These obligations are funded
from working capital of Fording Inc. or the Elk Valley
Coal Partnership, as the case may be, at the time the reclamation activities are
undertaken.

The
obligations include allowances for the reclamation of all pits, spoils, tailings
ponds and mine infrastructure and are based on the existing cost structure for
these activities at each of the operations.  Reclamation is normally
carried out continuously over the life of each mining operation and is largely
controlled by the rate that mining progresses over specific areas and when those
areas become available for reclamation.  Reclamation plans and scheduling
are predicated on completing a large proportion of the outstanding reclamation
prior to depleting the reserves contained in the long-range mine plan.



28

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The
following table presents the reconciliation of asset retirement obligations:

Millions
        of Canadian dollars
      
      As
        at December 312004
      
      2003Balance
        - beginning of year
      
      $58
      
      $55Liabilities
        incurred
      
      $12
      
      $1Liabilities
        settled
      
      ($1)
      
      ($1)Accretion
        expense
      
      $4
      
      $3Other
      
      ($5)
      
      $0Balance
        - end of year
      
      $69
      
      $58




The
total undiscounted amount of the estimated asset retirement obligations is $135
million, which using a credit adjusted risk-free rate, results in a discounted
obligation of $69 million at December
31, 2004.

Due
to the uncertainties concerning environmental remediation, the ultimate cost of
future reclamation activities could differ materially from the estimated amounts
provided.  The estimate of the total liability is subject to change based
on amendments to laws and regulations and as new information concerning the
Elk Valley Coal Partnership's and Fording Inc.'s operations becomes
available.  Future changes, if any, to the estimated total liability may be
material and would be recognized on a prospective basis as a change in an
accounting estimate, when applicable.  Environmental laws and regulations
are continually evolving in all jurisdictions in which operations are conducted.
 The Trust is not able to determine the impact, if
any, of environmental laws and regulation that may be enacted in the future on
its financial position due to the uncertainty surrounding the ultimate form that
such future laws and regulations may take.

Various
regulatory agencies require security to be posted for reclamation obligations
based on the forecasted costs to reclaim mined sites.  These security
requirements are satisfied by posting letters of credit issued by Canadian
chartered banks.

Health
& Safety

The
Trust, Fording Inc. and the Elk
Valley Coal Partnership are committed to working with all employees to maintain
a safe and productive work environment.  All the Elk
Valley Coal Partnership and Fording Inc. operations have comprehensive safety
and loss control programs that incorporate the prevention of accidents, injuries
and illnesses into normal work activities.  Effective use of personal
protective equipment and employee training on safe work practices and procedures
are also part of these programs.

To
effectively oversee the health and safety programs of the Elk Valley Coal
Partnership, the EHSRMC reviews health and safety reports
from the minesites to determine and implement new policies and procedures as
required.

Community
Relations

The
Trust, Fording Inc. and the Elk
Valley Coal Partnership contribute to the long term future and success of the
communities in which their employees work and live by participating in
initiatives which enhance the quality of life and the delivery of services in
those communities, encourage employee volunteerism and foster good relationships
with stakeholders.  Examples of these initiatives are as follows:

Sponsorship
of Olympic Skier Emily Brydon

The
Trust is proud to be one of Emily
Brydon's sponsors.  Emily Brydon is an Olympian
from Fernie, British Columbia, one of the Partnership's communities, who
recorded Canada's best woman's combined and slalom
results at the 2003 World Championships.  Ranked 12th
in the world in the downhill and a winner of a World Cup Bronze Metal, Emily is
the 2004 Canadian downhill and a winner of a World Cup Bronze Metal, Super
G and combined champion.

The
Elk Valley Coal Partnership Discovery Centre

The
Elk Valley Coal Partnership has donated $1 million to
assist the Coal Discovery Society in the creation of an
interpretive learning centre and heritage network that will illustrate and
showcase coal mining and its importance to the Elk Valley region of British
Columbia.  As well as preserving the history of the coal mining industry of
the Elk Valley, the centre will interpret modern coal mining and deliver
economic and community benefits to the Elk Valley.



29

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Public
Libraries

The
Elk Valley Coal Partnership has contributed to the Hinton
Public Library and the Fernie Public Library.  The contribution to the
Hinton Public Library will help fund the Hinton Leisure
and Learning Centre, which will be a library program room and video conferencing
suite.

Hospital
Foundations

The
Elk Valley Coal Partnership donates funds to hospital foundations in the Crowsnest
Pass and in the Elk Valley.  The employees of the Elk Valley Coal
Partnership run a "Caring for Kids" campaign for the Alberta
Children's Hospital and support the Mining Association of British Columbia's
"Mining for Miracles" campaign for the British Columbia Children's
Hospital.

Community
Initiatives

The
Elk Valley Coal Partnership supports a variety of community initiatives, which
include: summer mine tours at the Fording River, Greenhills
and Elkview mines that are run in conjunction with the
local Chamber of Commerce; the community councils; schools and colleges; youth
sports; mine education programs during Mining Week; mine
rescue competitions; and other community events.

Human
Resources

Employment
Arrangements

The
Trust and Fording Inc. do not employ any employees
directly.  Agreements made at
the time of the Arrangement require the
Elk Valley Coal Partnership to make available members of its executive personnel
to serve as officers (other than as the Chief
Executive Officer) of the Trust and
Fording Inc.  The employment costs of these executives are paid by the Elk
Valley Coal Partnership.  However, if any of the executives spend a
significant amount of his or her time in a year on the business of the Trust
and/or Fording Inc., the employment costs for that
executive will be allocated between the Trust, Fording
Inc. and the Elk Valley Coal Partnership based on the time
spent on the business and affairs of the Trust and Fording
Inc. during the year.  In addition, the agreements allow employees who
provide services to NYCO (other than
employees employed by NYCO Minerals, Minera,
American Tripoli and other
subsidiaries of Fording Inc.) to be employees of the
Elk Valley Coal Partnership and be made available to Fording
Inc. on a full time basis to provide services to NYCO on a
cost recovery basis.

The
compensation of employees of the Elk Valley Coal Partnership, including the
executives that also serve as officers of the Trust and Fording Inc., is
determined by the managing partner, and is reviewed by the Governance Committee
of Fording Inc. as part of the annual budget approval process by the Partners of
the Elk Valley Coal Partnership.

In
connection with the Arrangement, the
Elk Valley Coal Partnership also acquired from Teck
Cominco all of the issued and outstanding shares of the
Elkview Coal Corporation which employed the Elkview mine
employees.  As of January 1, 2004,
the Elkview Coal Corporation was amalgamated with the Elk Valley Coal
Corporation.



30

---



All
of the Elk Valley Coal Partnership's mines are unionized except for the Greenhills
mine.  The expiry dates for the current collective agreements at the
unionized mines are as follows:

Mine
      Expiry
        Date of Collective Agreement
      Productive
        Capacity
        As at December 31, 2004
        (million tonnes)Coal
        Mountain
      December
        31, 2004(1)
      2.7Line
        Creek
      May
        31, 2005
      2.5Elkview
      October
        31, 2005
      6Fording
        River
      April
        30, 2006
      10Cardinal
        River
      June
        30, 2007
      1.4Greenhills
      Non-union
      4.5


Notes:

(1)

Negotiations
currently taking place.

As
at December 31, 2004, Elk Valley Coal Partnership employed
2,744 persons, most of whom reside in Canada.  In
addition, Fording Inc., through its subsidiaries, employed
approximately 93 persons at operations in the United
States and 64 persons at operations in Mexico.  The Willsboro
and American Tripoli mines are unionized and the current
collective agreements expire June 30, 2006 and June
30, 2008, respectively.  The Minera mine is not
unionized.

Specialized
Skills and Knowledge

The
Elk Valley Coal Partnership requires extensive knowledge in the areas of mine
development and mineral processing.  Mine development includes all
functions necessary to economically develop the mine, extract the coal from the
earth and deliver it to the coal preparation plant.  Mineral processing
includes all functions that result in cleaning and preparing the coal for
delivery after extracting it from the mine.

Elk
Valley Coal Partnership's senior management personnel possess the necessary
skills and experience to efficiently perform these functions.  Through
their leadership, practical training is provided to employees to supplement
their formal technical training to ensure qualified candidates exist to fill
future management positions.  In order to attract individuals who possess
the necessary technical training, the Elk Valley Coal
Partnership actively participates in college and university work programs and
recruitment initiatives.

Compensation
Covenant

Certain
agreements entered into at the time of the Arrangement
state that Old Fording employees, while employed by Fording
Inc. or the Elk Valley Coal Partnership, will be provided with compensation
arrangements until the third anniversary of the Effective
Date.  In the opinion of the Directors, who were
directors of Old Fording at the time of the Arrangement,
these compensation arrangements are no less favourable in the aggregate, than
the compensation policies and arrangements that were in place prior to the Arrangement.

Change
in Control Agreements

Old
Fording entered into Change of Control Agreements with certain members of its
senior management in connection with becoming a public company in 2001.
 Seven of the Change of Control Agreements were assumed by the
Elk Valley Coal Partnership under the Arrangement.
 The Arrangement also constituted a change in control
for the purposes the Change of Control Agreements.  If an executive who is
a party to a Change of Control Agreement resigns or is terminated without cause
prior to March 1, 2006, such executive will be entitled to
the severance benefits provided for by the Change of Control Agreement.
 The severance benefits generally provide for two years salary, benefits
and bonuses except that the former President and Chief
Executive Officer of Old Fording,
was entitled to three years salary, benefits and bonuses.

As
of December 31, 2004, four executives had exercised their
Change of Control Agreements including the former President
and Chief Executive Officer of Old
Fording.  Of the three remaining Change of Control Agreements, no provision
has been accrued for the contingent liability related to Change
of Control Agreements outstanding on December 31, 2004.
 The liability is charged to earnings in the period in which the
resignation, retirement or termination occurs.  The Trust's
share of the contingent liability associated with such agreements, which is
dependent on the achievement of certain future financial results, ranges between
$5 million to $7 million.



31

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ANNUAL
AND QUARTERLY FINANCIAL INFORMATION

Annual
and quarterly financial information included in the Management
Discussion and Analysis of Financial Condition and Results
of Operations for the year ended December
31, 2004 that forms part of the Trust's 2004 Annual
Report, is incorporated by reference into this Annual
Information Form.

CAPITAL
STRUCTURE

Beneficial
interests in the Trust are divided into a single class of Units.
 The aggregate number of Units that the Trust
may issue is unlimited.  There were 48,980,479 Units
outstanding at December 31, 2004 and 48,987,438 Units outstanding at February
28, 2005.  The Units trade on both the TSX (FDG.UN) and the NYSE (FDG).

Description
of Units

Each
Unit represents an equal fractional undivided beneficial
interest in any distributions from the Trust and in any
net assets of the Trust in the event of termination or
winding-up of the Trust.  All Units
are of the same class with equal rights and privileges.  Each Unit
is transferable, entitles the holder thereof to participate equally in
distributions, including the distributions of net income and net realized
capital gains of the Trust and distributions on
liquidation, is fully paid and entitles the holder thereof to one vote at each
meeting of Unitholders for each Unit
held.  Units are currently represented by
certificates but the Trustees have authority to move to a
book-based system if such a transition is feasible.

The
Units do not represent a traditional investment and should
not be viewed by investors as "shares" in either Fording
Inc. or the Trust.  As holders of Units
in the Trust, the Unitholders will
not have the statutory rights normally associated with ownership of shares of a
corporation including, for example, the right to bring "oppression" or "derivative"
actions.

The
Units are not "deposits" within
the meaning of the Canada Deposit
Insurance Corporation Act and are not insured under the provisions of that
act or any other legislation.  The Trust
is not a trust company and is not registered under
applicable legislation governing trust companies as it does not carry on, or
intend to carry on, the business of a trust company.

Limited
Likelihood of Unitholder Liability

Effective
July 1, 2004, income trusts settled in Alberta, such as the Trust, have the
protection of limited liability afforded by the Income Trust Act
(Alberta) (the "ITLA"), in respect of any act, default, obligation or
liability of the Trust arising after the effective date of the legislation.
However, the ITLA does not preclude a claim for liability for any act, default,
obligation, or liability arising before July 1, 2004.  Ontario has passed
legislation similar to the ITLA and Quebec has legislation that provides similar
protection to unitholders.

The
Declaration of Trust provides for additional limits to the liability of the
Unitholders.  The Declaration of Trust provides that no Unitholder will be
subject to any liability in connection with the Trust or its obligations and
affairs, and in the event that a court determines Unitholders are subject to any
such liabilities, the liabilities will be enforceable only against, and will be
satisfied only out of the Unitholder's share of the Trust's assets.
 Pursuant to the Declaration of Trust, the Trust will indemnify and hold
harmless each Unitholder from any costs, damages, liabilities, expenses, charges
and losses suffered by a Unitholder resulting from or arising out of such
Unitholder not having such limited liability. The Declaration of Trust provides
that the Trustees and the Trust will make reasonable efforts to include a
provision in all contracts signed by or on behalf of the Trust to the effect
that such obligation will not be binding upon the Trustees or Unitholders
personally.

Notwithstanding
that the Declaration of Trust seeks to limit the liability of a Unitholder to
any person in connection with a holding of Units, the effectiveness of such
provisions is uncertain. Further it is not yet clear to what extent Unitholders
outside of Alberta, Ontario and Quebec benefit from the legislation that those
provinces have enacted.  Accordingly, there remains a risk that a
Unitholder could be held personally liable for obligations of the Trust (to the
extent

32

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that
claims are not satisfied by Fording Inc. or the Trust) in respect of contracts
that the Trust enters into and for certain liabilities arising other than out of
contract including claims in tort, claims for taxes, and possibly certain other
statutory liabilities. Counsel to the Trust have advised that they view this
risk as remote.

Limitations
on Non-Resident Unitholders

Certain
provisions of the Tax Act require that the Trust not be established or
maintained primarily for the benefit of Non-Residents ("Non-Resident
Beneficiaries").  Accordingly, in order to comply with such provisions,
the Declaration of Trust contains restrictions on the ownership of Units by
Unitholders who are Non-Resident Beneficiaries or for the benefit of
Non-Resident Beneficiaries. The Trustees may require declarations as to the
jurisdictions in which beneficial owners of Units are resident. If the Trustees
become aware, that non-resident ownership has reached a level such that it is
prudent to implement remedial measures, or that such a situation is imminent,
the Trustees may issue a public announcement thereof and shall not accept a
subscription for Units from or issue or register a transfer of Units to a person
unless the person provides a declaration that the person is not a Non-Resident
(or, in the discretion of the Trustees, that the person is not a Non-Resident
Beneficiary).  If, notwithstanding the foregoing, the Trustees determine
that more than 49% of the Units (on either a basic or fully diluted basis) are
held by or for the benefit of Non-Resident Beneficiaries, the Trustees may send
a notice to such Unitholders, chosen in inverse order to the order of
acquisition or registration or in such other manner as the Trustees may consider
equitable and practicable, requiring them to sell their Units or a portion
thereof within a specified period of not more than 60 days. If the Unitholders
receiving such notice have not sold the specified number of Units or provided
the Trustees with satisfactory evidence that they are not Non-Residents and do
not hold Units for the benefit of Non-Resident Beneficiaries within such period,
the Trustees may on behalf of such Unitholders sell such Units, and, in the
interim, the voting and distribution rights attached to such Units shall be
suspended.  Upon such sale, the affected holders shall cease to be
Unitholders and their rights shall be limited to receiving the net proceeds of
sale upon surrender of the certificates representing their Units.

The
Trustees together with management continue to monitor the level of Non-resident
ownership of the Trust as well as the on-going debate regarding limitations on
such ownership effectively prescribed by the Tax Act.  The Trustees are
currently evaluating a number of options for dealing with Non-resident ownership
and in addition, through management and the Trust's outside advisors, are
participating in the on-going debate surrounding such restrictions.  Some
of the options being considered by the Trustees could result in the delisting of
the Units from the NYSE or otherwise restrict their liquidity. The market price
of the Units could decline in the event that the Trustees elect to undertake one
or more such measures. One of the elements of the reorganization discussed under
the heading "Three Year History - Proposed Reorganization" would, if
approved, provide an interim structural solution for dealing with Non-Resident
Ownership.

Redemption
Right

Units
are redeemable at any time on demand by the holders thereof in accordance with
the terms described below. Upon receipt of the redemption request by the Trust,
all rights to and under the Units tendered for redemption
shall be surrendered and the holder thereof shall be entitled to receive a price
per Unit (the "Redemption Price")
equal to the lesser of:

(a)

90%
of the "market price" of the Units
on the principal market on which the Units
are quoted for trading during the ten trading day period ending immediately
prior to the date on which the Units are surrendered to
the Trust for redemption (the "Redemption
Date"); and

(b)

the
"closing market price" on the
principal market on which the Units
are quoted for trading, on the Redemption Date.

For
the purposes of this calculation:

"market
price" will be an amount equal to the average of the closing price of the Units
for each of the trading days for the ten trading day reference period on which
there was a closing price on the principal exchange or market
on which the Units are quoted for trading; provided that,
if the applicable exchange or market does not provide a closing price but only
provides the highest and lowest prices of the Units traded
on a particular day, the "market price" shall be an
amount equal to the weighted average of the highest and lowest prices for each
of the trading days on which there was a trade; and provided further that, if
there was trading on the applicable exchange or market for fewer than five of
the ten trading days in the reference period, the "market
price" shall be the average of the following prices established for each of
the ten trading days: (i) the average of the last bid and
last ask prices for each day on which there was no trading; (ii)
the closing price of the Units for each day that there was
trading if the exchange or market provides a closing price; and (iii)
the average of the highest and lowest prices of the Units
for each day that there was trading, if the market provides only the highest and
lowest prices of Units traded on a particular day; and

33

---



"closing
market price" shall be an amount equal to the closing price of the Units
if there was a trade on the date and the exchange or market provides a closing
price; an amount equal to the average of the highest and lowest prices of the Units
if there was trading and the exchange or other market
provides only the highest and lowest prices of Units
traded on a particular day; or the average of the last bid and last ask price of
the Units if there was no trading on the date.

The
aggregate Redemption Price payable by the Trust
in respect of any Units surrendered for redemption during
any calendar month shall be paid by cheque drawn on a Canadian bank or a trust
company in lawful money of Canada, on or before the last
day of the calendar month following the month in which the Units
were tendered for redemption, provided that the entitlement of Unitholders
to receive cash upon the redemption of their Units is
subject to the limitations that: (i) the total amount
payable by the Trust in respect of such Units
and all other Units tendered for
redemption in the same calendar month shall not exceed $50,000
(provided that the Trustees may, in their sole discretion,
waive such limitation in respect of any calendar month); (ii)
at the time such Units are tendered for redemption, the
outstanding Units shall be listed for trading or quoted on
any stock exchange or market which the Trustees consider,
in their sole discretion, provides representative fair market value prices for
the Units; and (iii) the normal
trading of the outstanding Units is not suspended or
halted on any stock exchange on which the Units are listed
(or, if not listed on a stock exchange, on any market on
which the Units are quoted for trading) on the Redemption
Date or for more than five trading days during the ten day trading period ending
on the Redemption Date.

If
a Unitholder is not entitled to receive cash upon the
redemption of Units as a result of the foregoing
limitations, then the Redemption Price for such Units
shall, subject to receipt of all necessary regulatory approvals (which the Trust
shall use commercially reasonable efforts to obtain), be paid and satisfied by
way of a distribution in specie of securities of Fording
Inc. or the Trust having a fair market value, as
determined by the Trustees, equal to the Redemption
Price of the surrendered Units for which cash is not
available. The Trust shall be entitled to all interest or
distributions paid or accrued and unpaid on such securities on or before the
date of the distribution in specie.

It
is anticipated that the redemption right will not be the primary mechanism for
holders of Units to dispose of their Units.
Securities that may be distributed in specie to Unitholders
in connection with a redemption will not be listed on any stock exchange and no
market is expected to develop in such securities. Such securities may also be
subject to an indefinite "hold period" or other resale
restrictions under applicable securities laws. As well, such securities may not
be qualified investments for trusts governed by registered retirement savings
plans, registered retirement income funds, registered education savings plans
and deferred profit sharing plans.

Declaration
of Trust

The
Trust was formed as an open-ended mutual fund trust created on February 26, 2003
pursuant to the Declaration of Trust, which provides the manner in which the
Trust will operate.

Amendments
to the Declaration of Trust

The
Declaration of
Trust may be amended from time to time if approved by at least 66 2/3% of the
votes cast at a meeting of the Unitholders called for such
purpose.

The
Trustees may, without the approval of the Unitholders,
make certain amendments to the Declaration
of Trust, including amendments:



34

---



(a)

for
the purpose of ensuring continuing compliance with applicable laws (including
the Tax Act), regulations,
requirements or policies of any governmental or other authority having
jurisdiction over the Trustees or over the Trust;

(b)

deemed
necessary or advisable to ensure that the Trust has not
been established or maintained primarily for the benefit of Non-Residents;

(c)

which,
in the opinion of the Trustees, provide additional
protection or benefit for the Unitholders;

(d)

to
remove any conflicts or inconsistencies in the Declaration
of Trust or to make corrections, including the correction or rectification of
any ambiguities, defective provisions, errors, mistakes or omissions, which are,
in the opinion of the Trustees, necessary or desirable and
not prejudicial to the Unitholders; and

(e)

which,
in the opinion of the Trustees, are necessary or desirable
as a result of changes in taxation or other laws or the administration or
enforcement thereof,

provided
that the Trustees may not unilaterally amend the Declaration
of Trust if such amendment would: (i) amend the amending
provisions; (ii) amend the Unitholders'
voting rights; (iii) cause the Trust
to fail to qualify as a "mutual fund trust" under the Tax
Act or cause the Units to constitute "foreign
property" under the Tax Act.

Unitholder
Rights Plan

As
part of the Arrangement, the Trust
adopted the Unitholder Rights Plan.
 The purpose of the Unitholder
Rights Plan is to provide Unitholders with sufficient time
to assess a take-over bid for the Trust, if such bid were
to be made and to provide the Trustees with the
opportunity to explore and develop alternatives that are in the best interest of
the Trust and the Unitholders.

The
Unitholder Rights Plan is intended
to encourage a potential acquirer to proceed either by way of a "Permitted
Bid" (defined below) or with the concurrence of the Trustees.

A
"Permitted Bid" is a bid which: (i)
has been made by way of a take-over bid circular; (ii) has
been made to all Unitholders; (iii)
is outstanding for a minimum of 50 days; (iv) provides
that no Units deposited to such bid will be taken up and
paid for (1) prior to the day which is 50 days following
the date of the take-over bid, and (2) unless on that
date, more than 50% of the outstanding Units held by "Independent
Unitholders" (generally, Unitholders who are unrelated
to the bidder) have been deposited and not withdrawn; and (v)
provides that if more than 50% of the Units held by Independent
Unitholders are tendered to the bid and not withdrawn within the 50-day period,
the bidder must make a public announcement to that effect and allow for the
tendering of outstanding Units for an additional ten-day
period.

Under
the Unitholder Rights Plan, on the Effective
Date, one right was issued in respect of each Unit issued
under the Arrangement (a "Right").
 The Rights will separate from the Units
after a person has acquired, or commenced a take-over bid to acquire, beneficial
ownership of 20% or more of the Units (a "Flip-in
Event").  Ten trading days after the occurrence of a Flip-in
Event, each Right, other than a Right
held by the person that initiated the Flip-in Event or any
other person acting jointly or in concert with such person, will permit the
holders of Rights to purchase Units
at a 50% discount to their market price.  The Rights
are not exercisable if an acquisition of Units is made
pursuant to a Permitted Bid.
 The Rights are also not exercisable if such
acquisition is made pursuant to a prospectus offering, a private placement or a
securities exchange take-over bid involving the issuance of Units
that have not been previously distributed.

The
Trustees may, prior to a Flip-in
Event, waive the application of the Unitholder
Rights Plan if the take-over bid is made by way of a take-over bid circular to
all holders of Units.  Certain exemptions are also
provided for investment advisors, trust companies and certain other investment
and pension fund managers who acquire 20% or more of the Units,
provided that they are not making a take-over bid.

35

---



OTPP,
as well as any other person who, for purposes of the Unitholder
Rights Plan, was deemed to beneficially own 20% or more of the Units
outstanding as at the first moment in time after the Arrangement
became effective, has been grandfathered under the Unitholder
Rights Plan so long as it does not subsequently increase its beneficial
ownership of Units by more than 1% of the number of Units
outstanding at such time, other than by way of certain permitted transactions
specified in the Unitholder Rights
Plan.

The
Unitholder Rights Plan must be
reconfirmed at every third annual meeting of Unitholders
following the Arrangement.  In any event, the Unitholder
Rights Plan will expire on the tenth anniversary of the Arrangement
unless it terminates prior to that time due to its failure to be reconfirmed by Unitholders.

Distribution
Policies

The
Trust

It
is the policy of the Trust to distribute the Distributable
Cash quarterly 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.  To the extent that distributions do not
exceed the taxable income of the Trust, a distribution
equal to the excess of taxable income over prior distributions in the year will
be payable to Unitholders of record on December
31st of each year.  In the event that the Trustees of
the Trust determine that the Trust
does not have sufficient cash available to make the full amount of any
distribution, the payment of such distribution may be made in Units.

Fording
Inc.

The
Board of Directors distributes Fording Inc.'s Available
Cash to the Trust, plus an amount equal to the expenses
payable by the Trust, subject to compliance with legal and
contractual obligations, by way of interest on the Fording
Subordinated Notes, dividends or other distributions on the Fording
Common Shares and principal repayments on the Fording
Subordinated Notes.  Such distributions are made quarterly based primarily
on Fording Inc.'s expected results for the quarter, but
may take into account its expected future performance.  Subsequent
distributions may be adjusted for amounts paid in prior periods if the actual Available
Cash for the prior period is greater than or less than the expected results in
the period.  Available Cash will be determined after
provision for cash reserves, which includes the proportionate share of cash
reserves at the Partnership level.

The
Elk Valley Coal Partnership

The
Elk Valley Coal Partnership distributes to its Partners,
in proportion to their respective Distribution
Entitlements, their portion of Partnership Distributable
Cash on a monthly basis.

Distribution
History

The
following quarterly distributions were paid by the Trust
on a per Unit basis for 2004 and 2003, inclusive of the
two special distributions totalling $1.50 per Unit (paid
as part of the April 15, 2003 and July
15, 2003 distributions), that formed part of the Arrangement:

|2004                   |       | 2003                   |         
|---------------------- | ----- | ---------------------- | --------
|April
      15, 2004   | $1.00 | April
      15, 2003   | $1.00(1)
|July
      15, 2004    | $1.00 | July
      15, 2003    | $1.49(2)
|October
      15, 2004 | $1.10 | October
      15, 2003 | $1.00   
|January
      17, 2005 | $1.30 | January
      15, 2004 | $1.00   



Notes:

(1)

Includes
$0.74 per Unit on account of the special distribution.

(2)

Includes
$0.76 per Unit on account of the special distribution.

36

---



The
following dividends were paid by Old Fording on a per
share basis in 2002:

|2002                     |       
|------------------------ | ------
|March
      15, 2002     | $0.125
|June
      17, 2002      | $0.125
|September
      16, 2002 | $0.150
|December
      16, 2002  | $0.150



MARKETS
FOR SECURITIES

The
Units are listed and posted for trading on the TSX
under the symbol "FDG.UN" and on the NYSE under the
symbol "FDG".  The following table sets out the
trading price range and volume of the Units traded on the Toronto
and New York Stock Exchanges during the most recent financial
year ended December 31, 2004:

|          | TSX             | NYSE           
|--------- | --------------- | ---------------
|Date      | High            | Low            
|January   | $
        45.98 | $
        41.00
|February  | $
        55.34 | $
        43.95
|March     | $
        59.15 | $
        49.42
|April     | $
        58.50 | $
        50.50
|May       | $
        55.19 | $
        43.50
|June      | $
        57.36 | $
        51.90
|July      | $
        61.80 | $
        55.51
|August    | $
        65.50 | $
        55.01
|September | $
        72.95 | $
        64.24
|October   | $
        80.00 | $
        68.27
|November  | $
        92.05 | $
        70.05
|December  | $
        94.50 | $
        79.35



On
February 28, 2005, the closing trading price of the Units on the TSX and on the
NYSE was, respectively, $114.52 and US$93.49 per Unit.

GOVERNANCE

Governance
Arrangements

As
part of the Arrangement, each of the Principal
Unitholders subscribed for Units and entered into a
governance agreement with the Trust and Fording Inc.
 The governance agreements provide each of Teck Cominco, Westshore
and OTPP and Sherritt (acting
together) with the right to nominate one Trustee and one
Director as part of the slate of Trustees
and Directors to be put forward by each of the Trust and
Fording Inc. for election by Unitholders.  The right
of a Principal Unitholder to put forward a nominee to the Trust
and Fording Inc. terminates unless the Principal
Unitholder retains a certain minimum ownership interest in the Trust.
 The rights of both Sherritt and Westshore
to put forward nominees have terminated for this reason.  The nominee of OTPP
must be an Independent Director or an Independent
Trustee, as the case may be.  The balance of the Trustees
will be recommended for election by the Governance
Committee of the Trustees and nominated for election by
the Trustees.  The balance of Directors will be
nominated by the Governance Committee of the Board of
Directors and nominated for election by the Board of Directors.

Each
governance agreement contains the agreement of the Trust
to nominate the nominees of the Principal Unitholders and
the agreement of the Principal Unitholders to vote for the
Trustees and Directors nominated by the Trust
and Fording Inc.  The right of any Principal
Unitholder to nominate a person as a Trustee or Director
is lost if the Principal Unitholder fails to vote for the
slate so nominated.



37

---



The
Chairman and Chief Executive Officer is selected by the Trustees
from among the Independent Trustees.  Any proposed
officer of the Trust who is also a director, officer or
employee of Teck Cominco or any of its affiliates, or of
the Elk Valley Coal Partnership, must be approved by the Independent
Trustees.

The
powers of the Trustees are subject to specific limitations
contained in the Declaration
of Trust (including restrictions on investments by the Trust
in order to comply with applicable income tax rules, the ability to vote the Fording
Common Shares held by the Trust and the ability to
terminate the Trust), and otherwise the Trustees
have full, absolute and exclusive, power, control and authority over the assets
and affairs of the Trust.

Audit
Committee Disclosure

The
text of the Audit Committee Charter for the Trust
is located in Appendix "D" to
this Annual Information Form.  The Audit
Committee Charter for Fording Inc. can be viewed at www.fording.ca.

Principal
Accounting Fees and Services

Following
is a summary of professional services provided by the Trust's principal
auditors, PricewaterhouseCoopers LLP, during the years
ended December 31, 2003 and 2004 and the related fees:

2004
      2003Audit Fees
      
      $277,500
      $258,000Audit Related Fees
      
      $128,413
      $241,500Tax Fees
      
      $22,750
      $57,510All Other Fees
      
      $1,625
      $1,625Total
      
      $430,288
      $558,635




Audit
Fees

Audit
fees were for professional services rendered by PricewaterhouseCoopers
LLP for the audit of the annual consolidated financial statements, review of the
Annual Information Form and Management
Discussion and Analysis and completion of the limited
reviews of quarterly financial information.

Audit-Related
Fees

Audit
related fees include professional services rendered by PricewaterhouseCoopers
LLP in the following areas: accounting consultations; review of documents
required for debt refinancing; audits related to pension plans; compliance with
the terms of various contractual agreements; and requirements of the
Sarbanes-Oxley Act of 2002.

Tax
Fees

Tax
fees include assistance rendered to the Trust in
connection with various tax compliance issues in Canada
and the United States.

All
Other Fees

Other
fees include the purchase of a license to access a financial reporting and
assurance information database developed by PricewaterhouseCoopers
LLP.

Pre-approval
Policies and Procedures

All
services provided by and fees paid to PricewaterhouseCoopers
LLP were approved by the Audit Committee in advance of the
services being performed.  The Audit Committee
considered the compatibility of the non-audit services provided by the Trust's
principal auditors with auditor independence.



38

---



Environmental,
Health and Safety Committee

The
Board of Directors has constituted an Environmental,
Health and Safety Committee to provide oversight of Fording
Inc.'s interest in respect of these matters.

Trustees
and Directors

The
majority of the Trustees and Directors are independent.
 The Independent Trustees and
Directors meet at least once annually in camera, without management or
non-independent Trustees and Directors being present.
 The Independent Trustees and
Directors met five times in 2004.

By
agreement of the Principal Unitholders at the time of the Arrangement,
the Declaration
of Trust and the Bylaws of Fording Inc. provide for the Chair
and Chief Executive Officer of each of the Trust
and Fording Inc. to be appointed from among the Independent
Trustees and Independent Directors
respectively.  As the appointment of the Chief Executive
Officer results in the incumbent being an officer of the Trust
and Fording Inc., the Trustee or Director appointed to the
position no longer meets the technical definition of an Independent
Trustee or Director as defined in Multilateral
Instrument 52-110 - Audit Committees.  However, the Chief Executive
Officer is not an officer of the Elk Valley Coal
Partnership or of any of its subsidiaries and is not responsible for the
day-to-day management of the business of the Trust or
Fording Inc.  Accordingly, it is not necessary that the positions of Chair
and Chief Executive Officer be held by separate
individuals in order to enhance the independence of the Trustees and the Board
of Directors from management of the Trust, Fording Inc.,
its subsidiaries and the Elk Valley Coal Partnership and
its subsidiaries.

The
following is a brief biography of each of the Trustees of
the Trust and the Directors of Fording
Inc., including their municipality of residence and a description of their
principal occupation during the last five years.  The Trustees
and the Board of Directors have each determined that fixed
term limits for service should not be established.  As a group, the
individuals listed below owned directly or indirectly, or exercised control or
direction over 94,919 Units as at February
28, 2005 representing less than 1% of the outstanding Units.
 Additional information about the Trustees and
Directors is contained in Information "Regarding
Nominees for Election As Trustees" and "Information
Regarding Nominees for Election As Directors" in the Trust's
2005 Management Information Circular.

Trustees

|Dr.
      Lloyd I. Barber, C.C., S.O.M.
      Residence:
      Regina
      Beach, Saskatchewan, Canada
      Trustee:
      Fording
      Canadian Coal Trust (2003)
      Age:
      73                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Dr.
      Barber is President Emeritus of the University of Regina, a position he
      has held since 1990.  From 1976 to 1990, Dr. Barber was President of
      the University of Regina.  Dr. Barber serves as a director of Teck
      Cominco Limited, CanWest Global Communications Corp. and Greystone Capital
      Management.  Dr. Barber is a Companion of the Order of Canada.
      Dr.
      Barber is not an Independent Trustee under the Declaration of Trust
      because he is a director of a Principal Unitholder.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Michael
      A. Grandin
      Residence:
      Calgary,
      Alberta, Canada
      Trustee:
      Fording
      Canadian Coal Trust (2003)
      Director:
      Fording
      Inc. (2003)
      Age:
      60                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Michael
      Grandin is currently Chairman and Chief Executive Officer of each of the
      Trust and Fording Inc.  He has held each position since the
      Arrangement became effective in February 2003.  Mr. Grandin was a
      director of Old Fording, the predecessor to the Trust, from 2001 to 2003.
       In February 2004, Mr. Grandin was appointed Dean of the Haskayne
      School of Business at the University of Calgary.  Mr. Grandin was
      President of PanCanadian Energy Corporation from October 2001 to April
      2002.  From 1998 to 2001, Mr. Grandin was Executive Vice President
      and Chief Financial Officer of Canadian Pacific Limited, a diversified
      operating company active in transportation, energy and hotels.  He
      was Vice Chairman and Director of Midland Walwyn Capital Inc. from 1996 to
      1998.  He is also a director of  IPSCO Inc., BNS Split Corp.,
      the Investment Dealers Association of Canada and EnCana Corporation.
      Mr.
      Grandin would qualify as an Independent Trustee under the Declaration of
      Trust except that he serves as Chief Executive Officer of the Trust and
      Fording Inc. to ensure the independence of the Trust and Fording Inc. from
      Elk Valley Coal.  Mr. Grandin is financially literate.(1)
      Mr.
      Grandin was a director of Pegasus Gold Inc. in 1998 when that company
      filed voluntarily to reorganize under Chapter 11 of the United States
      Bankruptcy Code.  A liquidation plan for that company received court
      confirmation later that year.



39

---

|Michael
      S. Parrett, C.A.
      Residence:
      Aurora,
      Ontario, Canada
      Trustee:
      Fording
      Canadian Coal Trust (2003)
      Director:
      Fording
      Inc. (2003)
      Age:
      53                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Mr.
      Parrett is an independent consultant with over 23 years of experience in
      the mining industry.  Mr. Parrett was the President of Rio Algom
      Limited from 2000 to 2001.  From 1991 to 2000, Mr. Parrett was Vice
      President and Chief Financial Officer of Rio Algom Limited.  From
      1999 to 2000, he was also Vice President, Strategic Development &
      Joint Ventures of Rio Algom Limited.  Prior to 1990, Mr. Parrett held
      various positions with Falconbridge Limited, serving as Vice President,
      Controller and Chief Financial Officer.  He also serves as a director
      at Pengrowth Corporation and Gabriel Resources Ltd.  Mr. Parrett is a
      Chartered Accountant.
      Mr.
      Parrett is an Independent Trustee under the Declaration of Trust and is a
      Member of the Trust's Audit and Governance Committees and Fording Inc.'s
      Audit Committee.  Mr. Parrett is financially literate.(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Harry
      G. Schaefer, F.C.A.
      Residence:
      Calgary,
      Alberta, Canada
      Trustee:
      Fording
      Canadian Coal Trust (2003)
      Director:
      Fording
      Inc. (2003)
      Age:
      68                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Mr.
      Schaefer was a director of Old Fording, the predecessor to the Trust, from
      2001 to 2003.  He is the President of Schaefer and Associates, a
      business advisory firm and he is also a Corporate Director.  Mr.
      Schaefer was Chairman of TransAlta Corporation from 1991 to 1996 and Chief
      Financial Officer from 1975 to 1993.  He is the Vice Chairman and a
      director of TransCanada Corporation and TransCanada PipeLines Limited.
       Mr. Schaefer has held these positions since 2003 and 1998,
      respectively.  He is also a director of Agrium Inc., a former
      director of Gulf Canada Resources Limited and was Chairman of Crestar
      Energy from 1996 to 2000.  Mr. Schaefer is chair of the Alberta
      Chapter of the Institute of Corporate Directors.  Mr. Schaefer is a
      Chartered Accountant.
      Mr.
      Schaefer is an Independent Trustee under the Declaration of Trust and a
      Member of the Trust's and Fording Inc.'s Audit Committees and a member
      of Fording Inc.'s Governance Committee.  Mr. Schaefer is
      financially literate.(1)                                                                                                                                                                                                                                                                                                     
|Peter
      Valentine, F.C.A.
      Residence:
      Calgary,
      Alberta, Canada
      Trustee:
      Fording
      Canadian Coal Trust (2003)
      Age:
      68                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Mr.
      Valentine holds a joint appointment as Senior Advisor to the President and
      CEO of the Calgary Health Region and to the Dean of Medicine, University
      of Calgary.  Prior to his present appointment, Mr. Valentine served
      for seven years as the Auditor General of Alberta.  From 1958 to
      1995, Mr. Valentine enjoyed a career with KPMG, serving as
      Partner-in-Charge of Professional Practice of the Calgary office, Chairman
      of the KPMG International Energy Practice Group and Senior Audit Partner
      responsible for a variety of medium to large sized organizations, with
      expertise in the petroleum industry and the Canadian securities practice.
       He is also a director of Livingston International Income Fund,
      Primewest Energy Trust, Superior Plus Income Fund and Resmore Trust
      Company.  He is currently the Chair of the Board of Governors of
      CCAF-FCVI Inc. and has previously served as Chair of the Financial
      Advisory Committee of the Alberta Securities Commission and as a member of
      the Accounting Standards Board and the Public Sector Accounting Board of
      the Canadian Institute of Chartered Accountants.
      Mr.
      Valentine is an Independent Trustee under the Declaration of Trust and a
      Member of the Trust's Audit and Governance Committees.  Mr.
      Valentine is financially literate.(1)



39

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|Robert
      J. Wright, C.M., Q.C.
      Residence:
      Toronto,
      Ontario, Canada
      Trustee:
      Fording
      Canadian Coal Trust (2003)
      Age:
      72                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Mr.
      Wright is Deputy Chairman of Teck Cominco Limited, a position he has held
      since June 2000.  He was Chairman of Teck Corporation from 1994 to
      June 2000.  From 1989 to 1993, he was Chairman of the Ontario
      Securities Commission.  Prior to 1989, he was a senior partner in the
      law firm of Lang Michener.  Mr. Wright is Chairman of the Mutual Fund
      Dealers Association and the AARC Foundation.  He is a member of the
      Investment Committee of the Ontario Workplace Safety & Insurance Board
      and the Pension Fund Committee of Air Liquide Canada Inc.  Mr. Wright
      is a Member of the Order of Canada.
      Mr.
      Wright is not an Independent Trustee under the Declaration of Trust
      because he is a director of a Principal Unitholder.                                                                                                                                                                                                    
|John
      B. Zaozirny, Q.C.
      Residence:
      Calgary,
      Alberta, Canada
      Trustee:
      Fording
      Canadian Coal Trust (2003)
      Age:
      57                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Mr.
      Zaozirny was a director of Old Fording, the predecessor to the Trust from
      1986 to 2003.  He has been counsel to McCarthy Tetrault LLP,
      Barristers and Solicitors since 1987.  He has served as Vice Chairman
      of Canaccord Capital Corporation since 1996 and is also a director of
      Acetex Corporation, Canadian Oil Sands Investments Inc., Computer
      Modelling Group, IPSCO Inc., Matrikon Inc., Middlefield Resource Funds,
      Pengrowth Corporation, Provident Energy Ltd., Titanium Corporation Inc.,
      Bankers Petroleum Inc. and TerraVest Income Fund.  He is a Governor
      of the Business Council of British Columbia and a member of the Law
      Societies of Alberta and British Columbia.  Mr. Zaozirny was
      Minister of Energy and Natural Resources for the Province of Alberta from
      1982 to 1986.
      Mr.
      Zaozirny is an Independent Trustee under the Declaration of Trust and a
      Chair of the Trust's Governance Committee.



Note:

(1)

Pursuant
to Multilateral Instrument 52-110 - Audit Committees, an individual is
financially literate if he or she has the ability to read and understand a set
of financial statements that presents a breadth and level of complexity of
accounting issues that are generally comparable to the breadth and complexity of
issues that can reasonably be expected to be raised by the issuer's financial
statements.

Directors

|Michael
      A. Grandin
      Michael S. Parrett, C.A.
      Harry G. Schaefer, F.C.A.                                       
|------------------------------------------------------------------------------------------------------------------------------
|The
      biographies of these individuals are set forth above under "Biographies
      of Trustees and Directors - Trustees".





41

---





|Dawn
      L. Farrell
      Status:
      Independent
      - Member of Fording Inc.'s Environmental, Health and Safety Committee
      Residence:
      Vancouver,
      B.C., Canada
      Director:
      Fording
      Inc. (2004)
      Age:
      45                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Mrs.
      Farrell is currently Executive Vice President, Generation, BC Hydro, a
      position she has held since May 2003.  Prior to joining BC Hydro,
      Mrs. Farrell was Executive Vice President, Corporate Development for
      TransAlta Corporation.  Throughout her 17 year career at TransAlta,
      she held a number of executive positions including Executive Vice
      President, Independent Power Projects and Vice President, Energy Marketing
      and IPP Development.  Mrs. Farrell has participated on a number of
      boards, including Mount Royal College, Mount Royal College Foundation,
      Mercury Electric, Vision Quest Windelectric, TransAlta Cogeneration and
      MEGA (a joint venture between TransAlta and Gener SA).  She holds a
      Masters Degree in economics from the University of Calgary and attended
      the Advanced Management Program at Harvard University.
      Mrs.
      Farrell is an Independent Director and is a Member of Fording Inc.'s
      Environmental, Health and Safety Committee.                                                                                                                                                                                                                                                                                                       
|Dr.
      Norman B. Keevil
      Residence:
      Vancouver,
      B.C., Canada
      Director:
      Fording
      Inc. (2003)
      Age:
      67                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Dr.
      Keevil is Chairman of the Board of Teck Cominco Limited, a position he has
      held since 2001.  From 1981 to 2001, he was President and Chief
      Executive Officer of Teck Corporation, also serving as Chairman from 1989
      to 1994.  Dr. Keevil is a director of Aur Resources Inc. and the
      Mining Association of Canada.  He holds an honorary Doctor of Laws
      from the University of British Columbia and was The Northern Miner Mining
      Man of the Year in 1979.  Among other honours, Dr. Keevil received a
      Distinguished Service Award from the Prospectors & Developers
      Association in 1990 and he received the Selwyn G. Blaylock Medal for 1991
      from the Canadian Institute of Mining and Metallurgy.  In January
      2004 Dr. Keevil was inducted into the Mining Hall of Fame.
      Dr.
      Keevil is not an Independent Director because he is a Chairman of a
      Principal Unitholder.
      Dr.
      Keevil will not be standing for re-election in 2005.                                                                                                                                                                                                                                                                                                                                        
|Richard
      T. Mahler
      Residence:
      Vancouver,
      B.C., Canada
      Director:
      Fording
      Inc. (2003)
      Age:
      61                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Mr.
      Mahler was Executive Vice President and Chief Financial Officer of Finning
      International Inc., the world's largest Caterpillar dealer from 1990
      until his retirement in 2003.  From 1981 to 1990, Mr. Mahler served
      as Vice President Finance of Amdahl Canada, a provider of enterprise-scale
      computing, networking storage systems and services.  Prior to that,
      he held various senior financial management positions with Ford Motor
      Company of Canada from 1968 to 1980.  Mr. Mahler is Chair,
      Partnerships British Columbia (a provincial Crown corporation formed to
      deliver public services through public/private partnerships) and a trustee
      of Swiss Water Income Fund.  He is also a director of the Vancouver
      Board of Trade and a director and Treasurer of the VGH/UBC Hospital
      Foundation.  He was awarded the 2002 Queen's Golden Jubilee Medal
      for Distinguished Service by the Governor General of Canada and the 2002
      Chancellor's Award for Distinguished Service by Simon Fraser University.
       Mr. Mahler holds an MBA.
      Mr.
      Mahler is an Independent Director and is Chair of Fording Inc.'s
      Governance Committee and a member of its Audit and Environmental, Health
      and Safety Committees.  Mr. Mahler is financially literate.(1)





42

---



|Dr.
      Thomas J. O'Neil
      Residence:
      Prescott,
      Arizona, USA
      Director:
      Fording
      Inc. (2003)
      Age:
      64                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Dr.
      O'Neil was President and Chief Operating Officer for iron ore miner,
      Cleveland-Cliffs Inc., until his retirement in July 2003.  He holds
      three degrees in mining engineering, with a Ph.D. from the University of
      Arizona where he served on the faculty from 1968-1981, becoming Professor
      and Head of the Department of Mining and Geological Engineering.  Dr.
      O'Neil served in various capacities for Amoco Minerals and its
      successor, Cyprus Minerals from 1981-1991, including Vice President of
      Engineering and Vice President of South Pacific Operations stationed in
      Sydney, Australia.  He is a director of the Minerals Information
      Institute, Puru Cooper Inc. and a past director of Hecla Mining Company
      and of Homestake Mining Company.  He was the 2003 President of the
      Society for Mining, Metallurgy and Exploration (SME) where he is also a
      Distinguished Member.  Dr. O'Neil was elected to the U.S. National
      Academy of Engineering in 1999 and the American Southwest Mining Hall of
      Fame in 2003.
      Dr.
      O'Neil is an Independent Director and is Chair of Fording Inc.'s
      Environmental, Health and Safety and a member of its Governance Committee.
|William
      W. Stinson
      Residence:
      Toronto,
      Ontario, Canada
      Director:
      Fording
      Inc. (2003)
      Age:
      71                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Mr.
      Stinson is President of Westshore Terminals Ltd., Chairman of Westshore
      Terminals Income Fund, Chairman of Sun Life Financial, Lead Director of
      CHC Helicopter Corporation and a director of Grant Forest Products Ltd.
       From 1981 to 1985, Mr. Stinson was President of Canadian Pacific
      Limited.  From 1985 to 1991, he was the President and Chief Executive
      Officer of Canadian Pacific Limited and from 1991 to 1996, he was Chairman
      and Chief Executive Officer of Canadian Pacific Limited.  From 1997
      to 2001, Mr. Stinson was the Chairman of the Executive Committee of United
      Dominion Industries Inc.
      Mr.
      Stinson is not an Independent Director because he is a trustee of a
      Principal Unitholder.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|David
      A. Thompson
      Residence:
      Vancouver,
      B.C., Canada
      Director:
      Fording
      Inc. (2003)
      Age:
      65                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Mr.
      Thompson is Chief Executive Officer and Deputy Chairman of Teck Cominco
      Limited, a position he has held since July 2001.  From 1994 to 2001,
      he was President and Chief Executive Officer of Cominco Ltd.  From
      1980 to 1994, he was Senior Vice President and Chief Financial Officer of
      Teck Corporation.  Mr. Thompson is a director of the St. Paul's
      Hospital Foundation.  He is a graduate of the London School of
      Economics and the Harvard Business School (Advanced Management Program).
      Mr.
      Thompson is not an Independent Director because he is a director of a
      Principal Unitholder.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            



Note:

(1)

Pursuant
to Multilateral Instrument 52-110 - Audit Committees, an individual is
financially literate if he or she has the ability to read and understand a set
of financial statements that presents a breadth and level of complexity of
accounting issues that are generally comparable to the breadth and complexity of
issues that can reasonably be expected to be raised by the issuer's financial
statements.

Officers
of the Trust

The
following is a brief biography of each of the officers of the Trust,
including their municipality of residence and a description of their principal
occupation during the last five years.  As a group, the individuals listed
below, other than Mr. Grandin whose
biographical information was included in the description of the Trustees
(see "Biographies of Trustees
and Directors - Trustees"), owned directly or
indirectly, or exercised control or direction over 105,763 Units
as at February 28, 2005 representing less than 1% of the
outstanding Units.

43

---



|Michael
      A. Grandin
      Position:
      Chairman
      and Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Mr.
      Grandin's biography is set forth above under "Biographies of
      Trustees and Directors - Trustees".                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|James
      L. Popowich
      Position:
      President
      Residence:
      Calgary,
      Alberta, Canada
      Age:
      60                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Mr.
      Popowich was appointed President of the Trust and Fording Inc. effective
      April 8, 2004 and President and Chief Executive of the Elk Valley Coal
      Partnership effective March 1, 2004.  He was formerly the Executive
      Vice President of the Trust, Fording Inc. and the Elk Valley Coal
      Partnership, a position he held since the Arrangement became effective in
      February 2003.  He was Executive Vice President of Old Fording from
      2001 to 2003.  Prior to that, he was Vice President, Operations from
      1997 to 2001 and Vice President, Development and Alberta Operations from
      1990 to 1997 of predecessors to Old Fording.  Mr. Popowich is Past
      Chairman of the Coal Association of Canada and Past Chairman of the
      Alberta Chamber of Resources.  He is a member of the Association of
      Professional Engineers, Geologists and Geophysicists of Alberta and the
      Canadian Institute of Mining, Metallurgy and Petroleum.
|Ronald
      A. Millos, C.A.
      Position:
      Vice
      President and Chief Financial Officer
      Residence:
      Calgary,
      Alberta, Canada
      Age:
      47                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Mr.
      Millos is the Vice President and Chief Financial Officer of the Trust,
      Fording Inc. and the Elk Valley Coal Partnership.  He has held these
      positions since June 1, 2003.  Mr. Millos was formerly the Vice
      President, Corporate Finance of Teck Cominco Limited since September of
      2001.  Between 1998 and 2001, Mr. Millos was Comptroller and Vice
      President, Finance and Chief Financial Officer for Cominco Ltd.  Mr.
      Millos is a member of the Canadian Institute of Chartered Accountants and
      the Institute of Chartered Accountants of British Columbia.                                                                                                                                                                                                                                                                                                                                                                                          
|James
      F. Jones
      Position:
      Vice
      President, Employee Relations and Corporate Secretary
      Residence:
      Calgary,
      Alberta, Canada
      Age:
      51                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Mr.
      Jones is the Vice President, Employee Relations & Corporate Secretary
      of the Trust, Fording Inc. and the Elk Valley Coal Partnership.  He
      has held the position of Corporate Secretary since the Arrangement became
      effective in February 2003 and was appointed Vice President, Employee
      Relations in March of 2004.  Mr. Jones was Corporate Secretary of Old
      Fording from 2001 to 2003 and Manager, Employee Relations and Regulatory
      Affairs of predecessors to Old Fording from 1993 to 2001.  Mr. Jones
      is a member of the Law Society of British Columbia and the Canadian Bar
      Association.  He is Vice Chair of the Calgary Society of Christian
      Education.                                                                                                                                                                                                                                                                           
|Kenneth
      E. Myers, C.A.
      Position:
      Treasurer
      Residence:
      Calgary,
      Alberta, Canada
      Age:
      55                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Mr.
      Myers is Treasurer of the Trust, Fording Inc. and the Elk Valley Coal
      Partnership, positions he has held since the Arrangement became effective
      in February 2003.  Mr. Myers was Treasurer of Old Fording from 2001
      to 2003 and Treasurer of predecessors to Old Fording from 1994 to 2003.
       He is Chairman of the Economic and Taxation Committee of The Coal
      Association of Canada and a former director of the Financial Executives
      Institute, Calgary Chapter.  Mr. Myers is a member of the Canadian
      Institute of Chartered Accountants, the Alberta Institute of Chartered
      Accountants and the Ordre des comptables agrees du Quebec.                                                                                                                                                                                                                                                                                                         





44

---







|Mark
      D. Gow, C.A.
      Position:
      Controller
      Residence:
      Calgary,
      Alberta, Canada
      Age:
      45                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Mr.
      Gow is Controller of the Trust, Fording Inc. and the Elk Valley Coal
      Partnership, positions he has held since April 1, 2004.  Prior to
      this appointment, he served in the position of Director, Investor
      Relations of the Trust since the Arrangement became effective in February
      2003.  Mr. Gow was Director, Investor Relations of Old Fording from
      2001 to 2003.  From 1998 to 2001, Mr. Gow was Controller of Minera
      NYCO S.A. de C.V. and from 1997 to 1998, he was Manager, Accounting of
      predecessors to Old Fording.  Mr. Gow graduated from University of
      Calgary with a Bachelor of Commerce and is a member of both the Alberta
      Institute of Chartered Accountants and the Canadian Institute of Chartered
      Accountants.



LEGAL
PROCEEDINGS

Material
Legal Proceedings

The
Trust is not aware of any material legal proceedings to
which the Trust, or its subsidiaries, is a party and to
which their property is subject other than the CP Rail
dispute and a potential environmental assessment of the Cheviot
project.

CP
Rail Dispute

For
information on the CP Rail Dispute, see "Description of Business - Coal
Transportation".

Cardinal
River Operations

All
licenses and approvals have been received for the Cheviot
Creek pit and the haul road to the Cardinal River mine
preparation plant.  However, a group of environmental organizations have
applied to the Federal Court seeking a further
environmental assessment of the Cheviot project and
challenging certain federal authorizations that the project has received.
 The Federal Court is expected to hear the application in June 2005.
 In addition, an individual appealed certain approvals issued by Alberta
Environment in connection with the project.  The Environmental Appeal Board
heard the appeal in mid-January and the parties are awaiting a decision.

The
Trust continues to monitor progress on these legal issues
and believes that the potential outcomes from these proceedings do not represent
a material risk to ongoing mining at the Cardinal River
mine.  However, negative decisions related to these legal issues could
impact future operations at Cardinal River.

INTEREST
OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Dr.
Norman Keevil is a Director of Fording Inc. and is also
the Chairman of Teck Cominco and one of its significant
shareholders.  As of December 31, 2004, Dr. Keevil reports his holdings in Teck
Cominco as follows: 209,440 Class A shares, 510,101
Class B subordinate voting shares and 22,715 restricted share units.  Teck
Cominco had a material interest in the achievement of synergies under the
Partnership Agreement pursuant to which Fording Inc.'s interest would be
reduced to 62% effective April 1, 2004, to 61% on April 1, 2005 and to 60%on
April 1, 2006.Teck Cominco's entitlements will increase
correspondingly over the same period.

TRANSFER
AGENT AND REGISTRAR

Computershare
Trust Company of Canada 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.



45

---





MATERIAL
CONTRACTS

The
chart briefly describes all of the material contracts of the Trust.
 Material contracts under National Instrument 51-102 - Continuous
Disclosure Obligations, are described as contracts signed out of the ordinary
course and are material to the business.  Each material contract has been
filed on SEDAR and EDGAR.

|Contract
      Name                                  | Date
      Mo/Day/Yr | Parties                                                                                                                                                                                                                                                                                                                                                                        | Consideration                                                                                                                                               | Key
      Terms                                                                                                                                 
|---------------------------------------------------- | -------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------
|Plan
      of Arrangement                            | 02/28/03             | Fording
      Inc., its Security Holders, Fording Coal Limited, 4123212 Canada Ltd.,
      Fording Canadian Coal Trust, Teck Cominco Limited, Westshore Terminals
      Income Fund, Teck-Bullmoose Coal Inc., Quintette Coal Partnership, Luscar
      Ltd, CONSOL, Sherritt International Corporation, Sherritt Coal Partnership
      II and Ontario Teachers' Pension Plan | n/a                                                                                                                                                         | Arrangement                                                                                                                                     
|Declaration
      of Trust                           | 02/26/03             | Fording
      Canadian Coal Trust                                                                                                                                                                                                                                                                                                                                              | n/a                                                                                                                                                         | Declaration
      of Trust                                                                                                                      
|Partnership
      Agreement                          | 02/26/03             | Fording
      Coal Limited, Fording Inc., Teck Cominco Limited, Quintette Coal
      Partnership and Teck-Bullmoose Coal Inc.                                                                                                                                                                                                                                                  | Consideration
      specified in Fording Contribution Agreement and Teck Cominco Contribution
      Agreement                                               | Formation
      and operation of the Elk Valley Coal Partnership.                                                                               
|Combination
      Agreement                          | 01/12/03             | Old
      Fording, Teck Cominco Limited, Westshore Terminals Income Fund, Ontario
      Teachers' Pension Plan Board and Sherritt International Corporation                                                                                                                                                                                                                    | Completion
      of the transactions comprising the Arrangement and payment of related
      expenses                                                       | Agreement
      to create the Elk Valley Coal Partnership and participate in the
      Arrangement                                              
|Met
      Coal Sale and Purchase Agreement           | 02/28/03             | Luscar
      Ltd, 1563706 Ontario Limited, CONSOL of Canada Inc., CONSOL Energy Inc.,
      CONSOL Energy Canada Ltd., Fording Inc. and the Elk Valley Coal
      Partnership                                                                                                                                                                                                  | Issuance
      of 6.4 million Units, grant of royalty and the assumption of assumed
      liabilities.  Consideration subject to working capital adjustment | Elk
      Valley Coal purchases Luscar Mine, Line Creek Mine, Cheviot Project and
      46.4% of the shares Neptune Bulk Terminals (Canada) Ltd.
|Prairie
      Operations Sale and Purchase Agreement | 02/28/03             | Fording
      Coal Limited and Sherritt Coal Acquisition Inc.                                                                                                                                                                                                                                                                                                                  | $225
      million and assumption of assumed liabilities.  Consideration subject
      to working capital adjustment                                        | Sale
      of Old Fording's Prairie Operations to Sherritt Coal Acquisition Inc.                                                                





46

---







|Contract
      Name                                             | Date
      Mo/Day/Yr | Parties                                                                                                                              | Consideration                                                                                          | Key
      Terms                                                                                            
|--------------------------------------------------------------- | -------------------- | ------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------
|Non-Competition
      Agreement                                 | 02/28/03             | Fording
      Inc., the Elk Valley Coal Partnership, the Trust, Luscar Ltd. Luscar
      Energy Partnership and Teck Cominco Limited | Exchange
      of covenants                                                                            | Non-Competition
      agreement in respect of the met and thermal coal markets for five years              
|Administrative
      Services Agreement                         | 02/28/03             | The
      Elk Valley Coal Partnership and the Trust                                                                                  | Provision
      of executives, personnel and services on a cost reimbursement basis                    | Provision
      of administrative services to the Trust                                                    
|Administrative
      and Industrial Minerals Services Agreement | 02/28/03             | Fording
      Inc. and the Elk Valley Coal Partnership                                                                               | Provision
      of executives, personnel and services on a cost reimbursement basis                    | Provision
      of administrative services to Fording Inc.                                                 
|Governance
      Agreement                                      | 02/28/03             | The
      Trust, Fording Inc. and Teck Cominco Limited                                                                               | Participation
      in arrangement; covenant to support arrangements described in agreement            | Nomination
      of Director and Trustee                                                                   
|Governance
      Agreement                                      | 02/28/03             | The
      Trust, Fording  Inc. and Ontario Teachers' Pension Plan Board                                                              | Participation
      in arrangement; covenant to support arrangements described in agreement            | Nomination
      of Director and Trustee                                                                   
|Fording
      Contribution Agreement                            | 02/28/03             | Fording
      Coal Limited, Fording Inc. and the Elk Valley Coal Partnership                                                         | Contribution
      of assets in consideration for the issuance of Partnership Interest                 | Contribution
      of Fording Coal Limited assets to the Elk Valley Coal Partnership                       
|Teck
      Cominco Contribution Agreement                       | 02/28/03             | Teck
      Cominco Limited, Teck-Bullmoose Coal Inc., Quintette Coal Partnership and
      the Elk Valley Coal Partnership           | Contribution
      of assets in consideration for the issuance of Partnership Interest                 | Contribution
      of Teck Cominco, Quintette and Bullmoose assets to the Elk Valley Coal
      Partnership
|Human
      Resources Agreement                                 | 02/28/03             | Fording
      Inc., Teck Cominco Limited, the Elk Valley Coal Partnership and the Elk
      Valley Coal Partnership Corporation      | Allocation
      of employment costs in respect of employees joining Elk Valley Coal
      Partnership | Specifies
      arrangements regarding employees joining the Elk Valley Coal Partnership                   
|Unitholder
      Rights Plan Agreement                          | 02/28/03             | The
      Trust and Computershare Trust Company of Canada                                                                            | n/a                                                                                                    | Customary
      Canadian unitholder rights plan                                                            
|Non-Competition
      Agreement                                 | 02/28/03             | Fording
      Inc., the Elk Valley Coal Partnership, the Trust, Luscar Ltd. Luscar
      Energy Partnership and Teck Cominco Limited | Exchange
      of covenants                                                                            | Non-Competition
      agreement in respect of the met and thermal coal markets for five years              
|Administrative
      Services Agreement                         | 02/28/03             | The
      Elk Valley Coal Partnership and the Trust                                                                                  | Provision
      of executives, personnel and services on a cost reimbursement basis                    | Provision
      of administrative services to the Trust                                                    
|Administrative
      and Industrial Minerals Services Agreement | 02/28/03             | Fording
      Inc. and the Elk Valley Coal Partnership                                                                               | Provision
      of executives, personnel and services on a cost reimbursement basis                    | Provision
      of administrative services to Fording Inc.                                                 
|Governance
      Agreement                                      | 02/28/03             | The
      Trust, Fording Inc. and Teck Cominco Limited                                                                               | Participation
      in arrangement; covenant to support arrangements described in agreement            | Nomination
      of Director and Trustee                                                                   
|Governance
      Agreement                                      | 02/28/03             | The
      Trust, Fording  Inc. and Ontario Teachers' Pension Plan Board                                                              | Participation
      in arrangement; covenant to support arrangements described in agreement            | Nomination
      of Director and Trustee                                                                   
|Fording
      Contribution Agreement                            | 02/28/03             | Fording
      Coal Limited, Fording Inc. and the Elk Valley Coal Partnership                                                         | Contribution
      of assets in consideration for the issuance of Partnership Interest                 | Contribution
      of Fording Coal Limited assets to the Elk Valley Coal Partnership                       
|Teck
      Cominco Contribution Agreement                       | 02/28/03             | Teck
      Cominco Limited, Teck-Bullmoose Coal Inc., Quintette Coal Partnership and
      the Elk Valley Coal Partnership           | Contribution
      of assets in consideration for the issuance of Partnership Interest                 | Contribution
      of Teck Cominco, Quintette and Bullmoose assets to the Elk Valley Coal
      Partnership
|Human
      Resources Agreement                                 | 02/28/03             | Fording
      Inc., Teck Cominco Limited, the Elk Valley Coal Partnership and the Elk
      Valley Coal Partnership Corporation      | Allocation
      of employment costs in respect of employees joining Elk Valley Coal
      Partnership | Specifies
      arrangements regarding employees joining the Elk Valley Coal Partnership                   
|Unitholder
      Rights Plan Agreement                          | 02/28/03             | The
      Trust and Computershare Trust Company of Canada                                                                            | n/a                                                                                                    | Customary
      Canadian unitholder rights plan                                                            



47

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ADDITIONAL
INFORMATION

Additional
information in respect of the Trust, including
remuneration of its Trustees, Directors and officers, the
principal holders of its securities, options to purchase its securities and the
interests of insiders in material transactions, is contained in the Trust's
2005 Management Information Circular and Proxy Statement which is being prepared
for the annual and special meeting of Unitholders to be
held on May 4, 2005.  Additional financial
information in respect of the Trust is provided in its
audited financial statements for the year ended December
31, 2004 and Management's Discussion
and Analysis of Financial Condition and Results
of Operations for the year ended December
31, 2004 contained in the Trust's 2004 Annual Report.

The
Trust will provide to any person, upon written request to
the Secretary of the Trust:

1.

When
the securities of the Trust are in the course of a
distribution pursuant to a short form prospectus or a preliminary short form
prospectus has been filed in respect of a distribution of its securities:

(a)

one
copy of the current Annual Information Form of the Trust,
together with one copy of any document, or the pertinent pages of any document,
incorporated by reference in the Annual Information Form;

(b)

one
copy of the Comparative Consolidated Financial Statements of the Trust
for its most recently completed financial year together with the accompanying
Report of the Auditors and one copy of Quarterly Interim Consolidated Financial
Statements of the Trust issued subsequent to the issuance
of the Comparative Consolidated Financial Statements for its most recently
completed financial year;

(c)

one
copy of the Trust's Management Information Circular and
Proxy Statement in respect of its most recently completed annual meeting of Unitholders;
and

(d)

one
copy of any other documents that are incorporated by reference into the
preliminary short form prospectus or the short form prospectus not required to
be provided under (a) to (c)
above; or

2.

At
any other time, one copy of any other documents referred to in (1)
(a), (b), (c)
and (d) above, provided the Trust may require the payment
of a reasonable charge if the request is made by a person who is not a Unitholder
of the Trust.

Additional
information regarding the Trust, Fording Inc. and the
Elk Valley Coal Partnership is available on SEDAR at www.sedar.com and on EDGAR
at www.sec.gov. and on the Trust's website at
www.fording.ca.

Requests
for additional information should be directed to:

Secretary

Fording Canadian Coal Trust

Suite 1000, 205 - 9th
Avenue SE

Calgary, Alberta

T2G
0R4



48

---

APPENDIX
"A":  GLOSSARY OF TECHNICAL TERMS

"BCM"
means bank cubic metre, which represents one cubic metre of material measured
prior to disturbance.

"BTU"
means a measure of energy required to raise the temperature of one pound of
water one degree Fahrenheit.

"BTU/lb"
means BTUs per pound, an imperial Unit
of measure used to describe the amount of heat released on combustion of one
pound of material, such as coal, under specific conditions.

"calorific
value" represents the heat energy released on combustion of a Unit
quantity of fuel under specific conditions.

"coal
year" means the twelve-month period commencing on April
1st and ending on March 31st  of the following year.

"coke"
means the substance formed when coking coal is heated in a coking oven to a very
high temperature in the absence of air.

"dragline"
means a large, electrically powered, mobile machine with a large bucket
suspended from the end of a long boom used in the open-pit
mining process.

"fee
simple" means the most absolute and unqualified interest that can be held
in land and indicates that the owner is free to hold the land in perpetuity and
transfer it without hindrance.

"freehold
lease" means an interest in land granted by an entity which owns the land
in fee simple.

"ISO"
means the International Organization for Standardization,
a worldwide federation of national standards bodies.

"kJ/kg"
means kilojoules per kilogram, a metric Unit of measure
used to describe the amount of heat released on combustion of one kilogram of
combustible material, such as coal, under specific conditions.

"metallurgical
coal" means the various grades of coal suitable for making steel, such as
coking coal, which is used to make coke and PCI
coal, which is used in the steelmaking process for its calorific value.

"overburden"
means materials that overlie a mineral deposit.

"PCI"
means coal that is pulverized and injected into a blast furnace.  Those
grades of coal used in the PCI process are generally
non-coking.  However, since such grades are utilized by the metallurgical
industry, they are considered to be a metallurgical coal.
 PCI grade coal is used primarily as a heat source in
the steelmaking process in partial replacement for high quality coking coals
which are typically more expensive.

"pit"
means an open excavation from which the raw mineral being mined is extracted.

"preparation
plant" means a facility for crushing, sizing and washing coal to prepare
it for sale.

"raw
coal" means coal that has been removed or exposed for removal from a mine,
but that has not been processed in a preparation plant.

"seaborne
metallurgical coal" means metallurgical coal that is
exported by ocean going ships from the producing country to the consuming
country and "seaborne hard coking coal" means a type
of metallurgical coal used primarily for making coke
in integrated steel mills.

"shovel"
means a large electric or diesel powered machine used in the open-pit
mining process to remove and load overburden or coal.



A-1

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"strip
ratio" means the ratio of the volume of overburden
moved to the tonnage of coal produced, measured in terms of BCM
of overburden per tonne of coal
produced.  A lower strip ratio is an operational
advantage because less overburden has to be removed in
order to expose the raw coal.

"thermal
coal" means coal that is used primarily for its heating value.
 Thermal coal tends not to have the carbonization properties possessed by
metallurgical coals.  Most thermal coal is used to
produce electricity in thermal power plants.

"tonne"
means a metric tonne, which is approximately 2,205 pounds,
as compared to a "short" ton or "net" ton, which is 2,000 pounds, or a
"long" ton or "British" ton, which is 2,240 pounds.  Unless
expressly stated otherwise, the metric tonne is the Unit
of measure used in this document.

"tonnes
of coal" means, unless expressly stated otherwise, tonnes of clean coal
(coal that has been processed in a preparation plant).

"tripoli"
is a naturally occurring microcrystalline form of silica used in a variety of
industrial applications.

"truck
and shovel mining" is an open-pit mining method that
utilizes shovels and large trucks to remove overburden
from above the coal seam.  The coal is then loaded with shovels or loaders
and hauled out of the pit in large trucks.

"wollastonite"
is a naturally occurring calcium silicate used in a variety of industrial
applications.



A-2

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APPENDIX
"B":  GENERAL GLOSSARY

"Arrangement"
means the transaction involving Old Fording, Teck Cominco,
Westshore, Sherritt, OTPP
and CONSOL and certain of their affiliates, that was
completed on February 28, 2003 and that proceeded by way
of plan of arrangement under the CBCA pursuant to which,
among other things, the business of Old Fording was
reorganized under an income trust (being the Trust) and the
Elk Valley Coal Partnership was formed.

"Available
Cash" means in general, cash from operations of Fording
Inc. on a consolidated basis (including its proportionate interest in the Partnership),
before interest payable on the Fording
Subordinated Notes and changes in non-cash working capital, less:

(a)

Sustaining
Capital Expenditures;

(b)

Principal
repayments on debt obligations except on the Fording
Subordinated Notes;

(c)

the
amount allocated to cash reserves; and

(d)

expenses
and other obligations of the Trust.

"Board
of Directors" means the board of directors of Fording Inc.;

"CBCA"
means the Canada Business
Corporations Act.

"CONSOL"
means CONSOL of Canada Inc. and/or CONSOL
Energy Canada Ltd., as the context requires.

"CPR"
mean Canadian Pacific Railway Limited

"Declaration
of Trust" means the declaration of trust dated February
26, 2003 by which the Trust was created.  The Declaration
of Trust can be viewed on SEDAR and EDGAR.

"Director"
a member of the Board of Directors of Fording Inc.

"Distributable
Cash" means all of the cash received by the Trust from Fording
Inc. and any other net cash investment income of the Trust,
less:

(a)

expenses
and other obligations of the Trust; and

(b)

any
amounts paid in cash by the Trust in connection with the
redemption of Units.

"Distribution
Entitlement" means a Partner's proportional
entitlement, expressed as a percentage, to share in the profits and losses of the
Elk Valley Coal Partnership and to participate in the distribution of assets on
liquidation or dissolution of the Elk Valley Coal Partnership.

"Effective
Date" means February 28, 2003, the date on which the
Arrangement became effective.

"Elk
Valley Coal Partnership" or the "Partnership" means the Elk
Valley Coal Partnership, previously known as the Fording
Coal Partnership, a general partnership existing under the laws of Alberta
formed in contemplation of the Arrangement.

"Fording
Common Shares" means the common shares in the capital of Fording
Inc.

"Fording
Inc." means the successor, by winding up, to Old FCL
and Old Fording.  Fording Inc.
was originally named 4123212 Canada Ltd. following its
continuance under the CBCA but changed its name as part of
the Arrangement.

"Fording
Preferred Shares" means the preferred shares in the capital of Fording
Inc.



B-1

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"Fording
Subordinated Notes" means the unsecured, subordinated notes of Fording
Inc.

"Fording
Royalty" means a right retained by Fording Inc. in
connection with the sale of the Prairie Operations, in
respect of the lands forming part of the Prairie
Operations pursuant to which Fording Inc. is entitled to receive a royalty in
respect of new coal or mineral production after February
28, 2003 excluding coal from the Genesee mine permit area
(as at February 28, 2003) utilized in the planned 2005
expansion of the Genesee generating facility.  The Fording
Royalty in respect of any property is not to exceed 5% of gross revenues from
such property.

"Independent
Director" means a Director who:

(a)

is
not an insider (as such term is defined under applicable securities laws) of any
of the Principal Unitholders or their respective
affiliates and, with respect to a director nominated by Sherritt
and OTPP, is also not an insider of Luscar
or its affiliates, so long as Sherritt and OTPP,
jointly or severally, control Luscar;

(b)

would
qualify as an "unrelated director" (as defined in the TSX Guidelines) of
each of the Principal Unitholders, if the director was a
director or trustee of each of the Principal Unitholders;
and

(c)

would
qualify as an "unrelated director" (as defined in the TSX Guidelines) space
of Fording Inc.

"Independent
Trustee" means a Trustee who:

(a)

is
not an insider (as such term is defined under applicable securities laws) of any
of the Principal Unitholders or their respective
affiliates and, with respect to a Trustee nominated by Sherritt
and OTPP, is also not an insider of Luscar
or its affiliates, so long as Sherritt and OTPP,
jointly or severally, control Luscar;

(b)

would
qualify as an "unrelated director" (as defined in the TSX Guidelines) of
each of the Principal Unitholders, if the Trustee
was a director or trustee of each of the Principal
Unitholders; and

(c)

would
qualify as an "unrelated director" (as defined in the TSX Guidelines) of the
Trust.

"Luscar"
means Luscar Ltd., a corporation existing under the laws
of Alberta and a wholly owned subsidiary of the Luscar
Partnership.

"Luscar/CONSOL
Joint Ventures" means the joint ventures in which Luscar
and CONSOL are equal participants formed for the purpose
of mining and preparing coal from the Luscar mine, the
undeveloped Cheviot project and the Line
Creek mine.

"Luscar
Partnership" means the Luscar Energy Partnership, a
general partnership owned indirectly by Sherritt and OTPP
as to 50% each.

"National
Instrument" means National Instrument 43-101 -
Standards of Disclosure for Mineral Projects.

"Neptune"
means Neptune Bulk Terminals (Canada) Ltd., a corporation
existing under the laws of British Columbia.

"Neptune
Terminals" means the terminal operated by Neptune
located in Port of Vancouver's inner harbour.

"NSC"
means Nippon Steel Corporation.

"NYCO"
means, collectively, those subsidiaries of Fording Inc.
engaged in the production of industrial minerals such as wollastonite and
tripoli, being NYCO Minerals, Inc. with operations at
Willsboro, New York; Minera NYCO S.A.
de C.V. with operations near Hermosillo
in the northwestern state of Sonora, Mexico;
and American Tripoli, Inc. with operations near Seneca, Missouri.

B-2

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"NYSE"
means the New York Stock Exchange Inc.

"Old
FCL" means Fording Coal Limited, a corporation
existing under the laws of Canada.  Old
FCL was the principal operating subsidiary of Old Fording
prior to the Effective Date.  Pursuant to the Arrangement,
Old FCL and Old Fording were wound
up into 4123212 Canada Ltd. which then changed its name to
"Fording Inc."

"Old
Fording" means Fording Inc. as it was constituted
prior to the Effective Date.  Pursuant to the Arrangement,
Old FCL and Old Fording were wound
up into 4123212 Canada Ltd., which then changed its name
to "Fording Inc."  Prior to the completion of the
Arrangement, Old Fording was a
public company in Canada and the United
States and its securities were listed on the TSX and the NYSE.
 The Trust is the successor issuer to Old
Fording.

"OTPP"
means Ontario Teachers' Pension Plan Board, a non-share
capital corporation existing under the laws of Ontario.

"Partners"
means the partners of the Elk Valley Coal Partnership, on
December 31, 2004, being Fording Inc., Teck
Cominco and Teck Cominco's affiliates QCP
and TBCI and "Partner" means any one of the Partners.

"Partnership
Agreement" means the Elk Valley Coal partnership
agreement between the Partners made as of February
26, 2003, as amended.

"Partnership
Distributable Cash" means, in general, cash from operations of the
Partnership, before changes in non-cash working capital less:

(a)

payment
of debt obligations, if any;

(b)

Sustaining
Capital Expenditures of the Partnership; and

(c)

allocations
to a reserve for reasonably anticipated working capital and capital expenditure
requirements (provided that reasonable use will be made of the Partnership's
operating lines for working capital purposes). The amount of the allocation to
the reserve by the Partnership in any period will be determined jointly by Teck
and Fording Inc.

plus
any other amounts distributed by the Partnership to the Partners in its
discretion.

"Partnership
Sustaining Capital Expenditures" means expenditures in respect of
additions, replacements or improvements to property, plant and equipment
required to maintain the Elk Valley Coal Partnership's business operations.

"Prairie
Operations" means the thermal coal business of Old
Fording.  These operations were substantially comprised of Old
Fording's joint venture interest at Genesee, its
contract mining operations at the Whitewood and Highvale
mines in Alberta and its holdings of mineral properties
and rights in Alberta, Manitoba and Saskatchewan.
 Pursuant to the Arrangement, the Prairie
Operations were sold to an affiliate of OTPP and Sherritt.

"Principal
Unitholders" means Teck Cominco, Westshore, Sherritt
and OTPP (and their respective affiliates that own Units).

"QCP"
means The Quintette Coal Partnership, a general
partnership existing under the laws of British Columbia
and an affiliate of Teck Cominco.

"SEDAR"
means the Canadian System for Electronic Document Analysis and Retrival.

"SEC
Guide 7" means United States Securities and Exchange
Commission Guide 7 - Description of Property by Issuers
Engaged or to be Engaged in Significant
Mining Operations.

"Sherritt"
means Sherritt International Corporation, a corporation
existing under the laws of New Brunswick.

B-3

---



"Sherritt
Coal Partnership II" means the general partnership formed under the laws
of Ontario, the two partners of which are wholly owned
subsidiaries of each of OTPP and Sherritt.

"Tax
Act" means the Income Tax Act, R.S.C. 1985,
c.1 (5th Supp.), as amended.

"TBCI"
means Teck-Bullmoose Coal Inc., a corporation existing
under laws of British Columbia and a wholly owned
subsidiary of Teck Cominco.

"Teck
Cominco" means Teck Cominco Limited, a corporation
existing under the laws of Canada.

"Teck
Cominco Coal Partnership" means the Teck Cominco Coal Partnership which is
an affiliate of Teck Cominco and is a general partnership existing under the
laws of British Columbia.

"Trust"
means Fording Canadian Coal Trust,
an open-ended mutual fund trust created pursuant to the Declaration
of Trust and governed by the laws of Alberta.

"Trustee"
means a trustee of the Trust.

"TSX"
means the Toronto Stock Exchange.

"Unit"
means a trust unit of the Trust.

"Unitholder"
means a holder of one or more Units.

"Unitholder
Rights Plan" means the Unitholder rights plan
implemented by the Trust on completion of the Arrangement.

"Westshore"
means Westshore Terminals Income Fund, an open-ended trust existing under the
laws of British Columbia.



B-4



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APPENDIX
"C":  DEFINITIONS FOR RESERVES AND RESOURCES

Introduction

Fording
Canadian Coal Trust is a reporting issuer in Canada and is
subject to Canadian securities laws.  These laws require that mineral
deposits be reported in accordance with the National
Instrument.  The National
Instrument specifies the terms to be used in describing certain types of mineral
deposits and the work required to be undertaken before certain of such terms may
be used.  Units are listed on the New York Stock
Exchange and therefore the Trust is also subject to the
jurisdiction of the Securities and Exchange Commission.
 The terms and standards required by the National
Instrument are in some respects different from the reporting requirements of SEC
Guide 7, and as a result, the Trust has endeavoured to
comply with both standards.

The
National Instrument specifies
different standards for coal as opposed to other types of minerals.  When
calculating and reporting coal deposits, the National
Instrument requires the use of relevant Canadian standards and definitions (the
Geological Survey of Canada Paper 88-21, "A Standardized
Coal Resource/Reserve Reporting
System for Canada" (the "GSC
Standards") and the Canadian Institute of Mining,
Metallurgy and Petroleum Standards on Mineral Resources and Reserves Definitions
and Guidelines, adopted August 20, 2000 (the "CIM
Standards")).  When calculating and reporting other mineral deposits, the
National Instrument requires that
the standards and definitions of the CIM Standards be
used.  SEC Guide 7 does not
distinguish between coal and other types of minerals but does specify that only
reserves may be reported.

Part
One - Canadian Standards for Coal - the GSC Standards

Coal
deposits are estimated in accordance with the GSC
Standards and the CIM Standards and reported as either a
"Reserve" or a "Resource".

The
distinction between a Reserve and a Resource
is that Reserves have been demonstrated by a feasibility
study to be economically recoverable whereas Resources
have not.

In
accordance with the National
Instrument, Coal Reserves are further classified as "Proven"
or "Probable" and Coal Resources are further
classified as "Measured", "Indicated"
or "Inferred".  These further classifications
reflect varying degrees of certainty that the coal being described exists in the
quantities reported.  A geologist determines the certainty of existence by
conducting geologic sampling.  Generally, as more sampling is conducted,
the degree of certainty improves.  However, a more complex geologic
formation requires more sampling than a less complex formation for the same
level of certainty to be achieved.  The additional sampling may result in
increases or decreases in the quantity of coal.

Coal
Reserve versus a Coal Resource

A
Coal Resource is a quantity of coal
which has reasonable prospects for economic extraction but which has not been
economically evaluated by a feasibility study or which does not meet current
economic or technical criteria for mining.  Accordingly, a Coal
Resource (unlike a Coal Reserve)
does not have demonstrated economic viability and may not
be currently economically viable.  Coal Resources are
upgraded to Coal Reserves after a feasibility study shows
that the Coal Resource is
economically mineable and there are no known legal impediments to mining the
coal.  Feasibility studies are conducted assuming current technological and
economic conditions.  The Trust reports The Elk
Valley Coal Partnership's Coal Resources exclusive of Coal
Reserves.

Proven
and Probable

Proven
Coal Reserves are coal quantities which are geologically
established to the highest degree of confidence.  Estimations
of Proven Coal Reserves are equivalent to the GSC
Standards' term for "Measured Reserves".

Probable
Coal Reserves are coal quantities which are geologically
established to a moderate to high degree of confidence.  There is some need
for further planning before the economics of Probable Coal
Reserve extraction can be confirmed.  Estimations
of Probable Coal Reserves are equivalent to the GSC
Standards' term for "Indicated Reserves".

C-1

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A
Proven Coal Reserve is the
economically mineable part of the Measured Coal Resource.
 A Probable Coal Reserve is the
economically mineable part of the Indicated Coal Resource
and, in some cases, the Measured Coal Resource.
 Economic recovery is demonstrated by a feasibility study.  A
feasibility study must include information on mining, processing, metallurgical,
economic and other relevant factors that demonstrate, at the time of reporting,
that economic extraction can be justified.  A Probable
Coal Reserve has a lower level of
confidence than a Proven Coal Reserve.

Measured
and Indicated

Measured
Coal Resources consist of coal quantities based on a high
level of geological certainty.  Indicated Coal
Resources consist of coal quantities with a moderate degree of geological
certainty, based on less abundant information.

The
estimates of Measured and Indicated
Coal Resources are based on detailed and reliable exploration and testing
information gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes that are spaced closely
enough to confirm geological and grade continuity.

A
Measured Coal Resource is that part
of a Coal Resource for which
quantity, grade or quality, densities, shape and physical characteristics are so
well established that they can be estimated with a high level of confidence.

An
Indicated Coal Resource is that part
of a Coal Resource for which
quantity, grade or quality, densities, shape and physical characteristics can be
estimated with confidence.

An
Indicated Coal Resource has a higher
level of confidence than an Inferred Coal Resource
but has a lower level of confidence than a Measured
Coal Resource.

Inferred

Inferred
Coal Resources consist of coal quantities that have a
relatively low level of geological certainty and for which there is insufficient
information to allow detailed examination of long-term mining limits and which
are therefore not included in estimates of total Resources.
 Due to the uncertainty attached to Inferred Coal Resources, it cannot be
assumed that all or any part of an Inferred Coal Resource
will be upgraded to a Measured or Indicated
Coal Resource or that it is economically or legally
mineable.  Accordingly, Inferred Coal Resources are excluded from estimates
forming the basis of feasibility or other economic studies and cannot become
part of a Reserve without first being upgraded to a Measured
or Indicated Resource.

Part
Two - CIM Standards for Industrial Minerals

All
mineral Reserves and Resources,
other than Coal Reserves and Resources,
are estimated and reported as outlined in the CIM
Standards.

Under
the CIM Standards, the distinction between a "Reserve"
and a "Resource" is that Reserves
have been demonstrated by a feasibility study to be economically recoverable
whereas Resources have not.  Accordingly, a Mineral
Resource (unlike a Mineral Reserve)
does not have demonstrated economic viability and may not
currently be economically viable.  For the purposes of calculating Reserves
for such other minerals, economic viability is determined by reference to
current economic conditions in the same way that it is for coal.

Like
coal, classifications of Reserves and Resources
are classified further according to the degree of certainty of existence.  Reserves
are classified as Proven and Probable.
 Resources are categorized as Measured,
Indicated and Inferred.

Reserves
versus Resources

A
Mineral Resource is the occurrence
of a mineral in a form, amount and quality that it has a reasonable prospect for
economic extraction but which has not been economically evaluated by a
feasibility study or which does not meet current economic or technical criteria
for mining.  Mineral Resources are upgraded to Mineral
Reserves after a preliminary feasibility study shows that the Mineral
Resource is anticipated to be economically mineable and
there are no known legal impediments to mining the mineral.

C-2

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Proven
and Probable

A
Proven Mineral Reserve is the
economically mineable part of the Measured Mineral Resource
demonstrated by at least a preliminary feasibility study.  A Probable
Mineral Reserve is the economically mineable part of the Indicated
Mineral Resource and, in some cases, the Measured
Mineral Resource, demonstrated by at least a preliminary
feasibility study.  A preliminary feasibility study must include
information on mining, processing, metallurgical, economic and other relevant
factors that demonstrate, at the time of reporting, that economic extraction can
be justified.  A Probable Mineral Reserve
has a lower level of confidence than a Proven
Mineral Reserve.

Measured
and Indicated

A
Measured Mineral Resource is that
part of a Mineral Resource for which
quantity, grade or quality, densities, shape and physical characteristics are so
well established that they can be estimated with a high level of confidence.

An
Indicated Mineral Resource is that
part of a Mineral Resource for which
quantity, grade or quality, densities, shape and physical characteristics can be
estimated with confidence.

An
Indicated Mineral Resource has a
higher level of confidence than an Inferred Mineral Resource
but has a lower level of confidence than a Measured
Mineral Resource.

The
estimates of Measured and Indicated
Mineral Resources are based on detailed and reliable exploration and testing
information gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes that are spaced closely
enough to confirm geological and grade continuity.

Inferred

An
Inferred Mineral Resource is that
part of a Mineral Resource for which
quantity and grade or quality can be estimated on the basis of geological
evidence and limited sampling, and reasonably assumed, but not verified,
geological and grade continuity.  The estimate is based on limited
information and sampling gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes.  Due to the
uncertainty attached to Inferred Mineral Resources, it
cannot be assumed that all or any part of an Inferred
Mineral Resource will be upgraded to an Indicated
or Measured Mineral Resource or that
it is economically or legally mineable.  An Inferred
Mineral Resource has a lower level
of confidence than that applied to an Indicated Mineral Resource.
 Accordingly, Inferred Mineral Resources are excluded
from estimates forming the basis of feasibility or other economic studies and
cannot become part of a Reserve without first being
upgraded to a Measured or Indicated Resource.

Part
Three - SEC Guide 7 Definitions

Reserve

SEC
Guide 7 defines a Reserve as that part of a mineral
deposit which could be economically and legally extracted or produced at the
time of the reserve determination.

Proven
Reserves

SEC
Guide 7 defines a Proven Reserve as a reserve for which: (a)
quantity is computed from dimensions revealed in outcrops, trenches, workings or
drill holes; grade and/or quality are computed from the results of detailed
sampling; and (b) the sites for inspection, sampling and
measurement are spaced so closely and the geologic character is so well defined
that size, shape, depth and mineral content of reserves are well-established.

C-3

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Probable
Reserves

SEC
Guide 7 defines a Probable Reserve as a reserve for which
quantity and grade and/or quality are computed from information similar to that
used for proven reserves, but the sites for inspection, sampling and measurement
are farther apart or are otherwise less adequately spaced.  The degree of
assurance, although lower than that for proven reserves, is high enough to
assume continuity between points of observation.



C-4



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APPENDIX
"D":  FORDING CANADIAN COAL TRUST
AUDIT COMMITTEE CHARTER

PURPOSE

The
Audit Committee (the "Committee") is a standing committee appointed by the
Trustees to assist the Trustees in fulfilling its oversight responsibilities
with respect to financial reporting including responsibility to:

- 
- oversee
the integrity of the Trust's financial statements and financial reporting
process, including the audit process and the Trust's internal accounting
controls and procedures and compliance with related legal and regulatory
requirements;
- oversee
the qualifications and independence of the external auditors;
- oversee
the work of the Trust's financial management, internal audit function and
external auditors in these areas; and
- provide
an open avenue of communication between the external auditors, the internal
auditors, the Trustees, the board of directors of Fording Inc. and the officers
(collectively, "Management") of the Trust, Fording Inc. and the Elk Valley
Coal Partnership (the "Partnership").

In
addition, the Committee will review and/or approve any other matter specifically
delegated to the Committee by the Trustees.

COMPOSITION
AND PROCEDURES

In
addition to the procedures and powers set out in the resolution of the Trustees
establishing this Committee, the Committee will have the following composition
and procedures:

1.

Composition

The
Committee shall consist of no fewer than three members.  None of the
members of the Committee shall be an officer or employee of the Trust, Fording
Inc. or any of its subsidiaries or the Partnership or any of its subsidiaries
and each member of the Committee shall be an "Independent Trustee" (as
defined in the Declaration of Trust
establishing the Trust) and an "independent trustee" (in accordance with the
definition of "independent director" from time to time under the
requirements or guidelines for audit committee service under applicable
securities laws and the rules of any stock exchange on which the Trust's units
are listed for trading); provided that the fact that a Trustee is also a
director of Fording Inc. will not disqualify the Trustee from being a member of
the Committee provided that the Trustee would otherwise be eligible to be a
member of the Committee.  The Chair of the Board/CEO shall be an "ex
officio" member of the Committee.

2.

Appointment
and Replacement of Committee Members

Any
member of the Committee may be removed or replaced at any time by the Trustees
and shall automatically cease to be a member of the Committee upon ceasing to be
a Trustee.  The Trustees may fill vacancies on the Committee by election
from among its number.  The Trustees shall fill any vacancy if the
membership of the Committee is less than three Trustees or the Committee does
not have at least one member with accounting or related financial expertise.
 If and whenever a vacancy shall exist on the Committee, the remaining
members may exercise all its power so long as a quorum remains in office.
 Subject to the foregoing, the members of the Committee shall be elected by
the Trustees annually and each member of the Committee shall hold office as such
until the next annual meeting of unitholders after his or her election or until
his or her successor shall be duly elected and qualified.

3.

Financial
literacy

All
members of the Committee must be "financially literate" (as that term is
interpreted by the Trustees in their business judgment or as may be defined from
time to time under the requirements or guidelines for audit committee service
under securities laws and the rules of any stock exchange on which the Trust's
units are listed for trading) or must become financially literate within a
reasonable period of time after his or her appointment to the Committee.
 At least one member of the Committee must also have "accounting or
related financial expertise" as that term is defined from time to time under
the requirements or guidelines for audit committee service under applicable
securities laws and the rules of any stock exchange on which the Trust's
securities are listed for trading or, if it is not so defined, as that term is
interpreted by the Trustees in their business judgment.

D-1

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4.

Service
on Multiple Audit Committees

If
a Committee member serves on more than three public issuer audit committees, the
Trustees must determine that such service would not impair the ability of the
member to effectively serve on the Committee and may disclose such determination
in the annual proxy statement.

5.

Separate
Executive Meetings

The
Committee shall meet at least once every quarter, and more often as warranted,
with the Chief Financial Officer(s) of the Partnership, Fording Inc. and the
Trust, the head of the internal audit function of such entities, if other than
the Chief Financial Officer, and the external auditors in separate executive
sessions to discuss any matters that the Committee or each of these groups
believes should be discussed privately.

6.

Professional
Assistance

The
Committee may retain special legal, accounting, financial or other consultants
to advise the Committee at the Trust's expense.

7.

Reliance

Absent
actual knowledge to the contrary (which shall be promptly reported to the
Trustees), each member of the Committee shall be entitled to rely on (i) the
integrity of those persons or organizations within and outside the Trust from
which it receives information, (ii) the accuracy of the financial and other
information provided to the Committee by such persons or organizations and (iii)
representations made by Management and the external auditors, as to any
information technology, internal audit and other non-audit services provided by
the external auditors to the Trust and its subsidiaries.

8.

Review
of Charter

The
Committee shall review and reassess the adequacy of this Charter at least
annually and otherwise as it deems appropriate and recommend changes to the
Trustees.  The Committee shall evaluate its performance with reference to
this Charter annually.  The Committee will approve the form of disclosure
of this Charter on the Trust's website and, where required by applicable
securities laws or regulatory requirements, in the annual proxy circular or
annual report of the Trust.

9.

Delegation

The
Committee may delegate from time to time to any person or committee of persons
any of the Committee's responsibilities that lawfully may be delegated.

10.

Reporting
to the Trustees

The
Committee shall report through the Committee Chair to the Trustees following
meetings of the Committee on matters considered by the Committee, its activities
and compliance with this Charter.

D-2

---



SPECIFIC
MANDATES OF THE COMMITTEE

The
Committee shall:

I.

In
Respect of the External Auditors

(a)

review
the performance of the external auditors who are accountable to the Committee
and the Board as the representatives of the unitholders, including the lead
partner of the independent auditor team and make recommendations to the Trustees
as to the reappointment or appointment of the external auditors of the Trust to
be proposed in the Trust's proxy statement for shareholder approval and shall
have authority to terminate the external auditors;

(b)

review
the reasons for any proposed change in the external auditors which is not
initiated by the Committee or Trustees and any other significant issues related
to the change, including the response of the incumbent auditors, and enquire as
to the qualifications of the proposed auditors before making its recommendation
to the Trustees;

(c)

approve
the terms of engagement and the compensation to be paid by the Trust to the
external auditors;

(d)

review
the independence of the external auditors, including a written report from the
external auditors respecting their independence and consideration of applicable
auditor independence standards;

(e)

approve
in advance all permitted non-audit services to be provided to the Trust or any
of its affiliates by the external auditors or any of their affiliates, subject
to any de minimus exception allowed by applicable law; the Committee may
delegate to one or more designated members of the Committee the authority to
grant pre-approvals required by this subsection;

(f)

if
the Committee approves an audit service within the scope of the engagement of
the independent auditor, such audit service shall be deemed to have been
pre-approved for purposes of this subsection;

(g)

review
the disclosure with respect to its pre-approval of audit and non-audit services
provided by the external auditors;

(h)

approve
guidelines for the hiring by the Trust of employees or former employees of the
external auditors;

(i)

review
annually a report from the external auditors in respect of their internal
quality-control procedures, any material issues raised by the most recent
internal quality-control review, or peer review of the external auditors, or by
any inquiry or investigation by governmental or professional authorities, within
the preceding five years, respecting one or more independent audits carried out
by the external auditors, and any steps taken to deal with any such issues;

(j)

review
a report describing:

(k)

all
critical accounting policies and practices to be used in the annual audit,

(l)

all
alternative treatments of financial information within generally accepted
accounting principles that have been discussed with Management, ramifications of
the use of such alternative disclosures and treatments, and the treatment
preferred by the external auditors, and

(m)

other
material written communication between the external auditors and Management,
such as any management letter or schedule of unadjusted differences;

D-3

---



(n)

review
with the external auditors and Management the general audit approach and scope
of proposed audits of the financial statements of the Trust, Fording Inc. and
its subsidiaries, the objectives, staffing, locations, co-ordination and
reliance upon Management in the audit, the overall audit plans, the audit
procedures to be used and the timing and estimated budgets of the audits;

(o)

review
the interim review engagement report of the external auditors before the release
of interim financial statements; and

(p)

discuss
with the external auditors any difficulties or disputes that arose with
Management or the internal auditors during the course of the audit, any
restrictions on the scope of activities or access to requested information and
the adequacy of Management's responses in correcting audit-related
deficiencies.

II.

In
Respect of Financial Disclosure

(a)

review
with the external auditors and Management:

(i)

the
audited financial statements and the notes and Managements' Discussion and
Analysis relating to such financial statements, the annual report, the financial
information of the Trust contained in any prospectus or information circular or
other disclosure documents or regulatory filings of the Trust and make
recommendations to the Trustees for their approval;

(ii)

the
interim financial statements and the notes and Managements' Discussion and
Analysis relating to such financial statements and approve their release to the
public;

(iii)

the
quality, appropriateness and acceptability of the Trust's accounting
principles and practices used in its financial reporting, changes in the Trust's
accounting principles or practices and the application of particular accounting
principles and disclosure practices by Management to new transactions or events;

(iv)

all
significant financial reporting issues and judgments made in connection with the
preparation of the financial statements, including the effects of alternative
methods within generally accepted accounting principles on the financial
statements and any "second opinions" sought by Management from an
independent or other audit firm or advisor with respect to the accounting
treatment of a particular item;

(v)

the
effect of regulatory and accounting initiatives on the Trust's financial
statements and other financial disclosures;

(vi)

any
reserves, accruals, provisions or estimates that may have a significant effect
upon the financial statements of the Trust;

(vii)

the
use of special purpose entities and the business purpose and economic effect of
off balance sheet transactions, arrangements, obligations, guarantees and other
relationships of the Trust and their impact on the reported financial results of
the Trust;

(viii)

any
legal matter, claim or contingency that could have a significant impact on the
financial statements, the Trust's compliance policies and any material
reports, inquiries or other correspondence received from regulators or
governmental agencies and the manner in which any such legal matter, claim or
contingency has been disclosed in the Trust's financial statements;

(ix)

review
the treatment for financial reporting purposes of any significant transactions
which are not a normal part of the Trust's operations; and

D-4

---



(x)

the
use of any "pro forma" or "adjusted" information not in accordance with
generally accepted accounting principles.

(b)

review
and resolve disagreements between Management and the external auditors regarding
financial reporting or the application of any accounting principles or
practices;

(c)

review
earnings news releases, as well as financial information and earnings guidance
provided to analysts and ratings agencies, it being understood that such
discussions may, in the discretion of the Committee, be done generally (i.e., by
discussing the types of information to be disclosed and the type of presentation
to be made) and that the Committee need not discuss in advance each earnings
release or each instance in which the Trust gives earning guidance;

(d)

establish
and monitor procedures for the receipt and treatment of complaints received by
the Trust regarding accounting, internal accounting controls or audit matters
and the anonymous submission by employees of concerns regarding questionable
accounting or auditing matters and review periodically with Management and the
internal auditors these procedures and any significant complaints received;

(e)

if
requested by the Trustees, receive from the President and the Chief Financial
Officer of the Trust a certificate certifying in respect of each annual and
interim report the matters such officers are required to certify in connection
with the filing of such reports under applicable securities laws and receive and
review disclosures made by such officers about any significant deficiencies in
the design or operation of internal controls or material weaknesses therein and
any fraud involving Management or persons who have a significant role in the
Trust's internal controls; and

(f)

review
and discuss the Trust's major financial risk exposures and the steps taken to
monitor and control such exposures, including the use of any financial
derivatives and hedging activities.

III.

In
Respect of Insurance

(a)

review
annually insurance programs relating to the Trust and its investments.

IV.

In
Respect of the Internal Audit Function

(a)

determine
the appropriate function for the Trust and oversee its processes and the terms
of compensation for any individuals engaged in such function.

V.

In
Respect of Internal Controls

(a)

review
the adequacy and effectiveness of the Trust's internal accounting and
financial controls based on recommendations from Management and the external
auditors for the improvement of accounting practices and internal controls;

(b)

review
annually a report on senior officer expenses;

(c)

oversee
compliance with internal controls; and

(d)

periodically
review and assess the Joint Code of Business Conduct in light of reports from
Management on compliance and other reports received pursuant to the
Whistleblower Hotline program and other procedures for the receipt, retention,
and treatment of complaints received by the issuer.

OVERSIGHT
FUNCTION

While
the Committee has the responsibilities and powers set forth in this Charter, it
is not the duty of the Committee to plan or conduct audits or to determine that
the Trust's financial statements are complete and accurate or are in
accordance with GAAP and applicable rules and regulations.  These are the
responsibilities of Management and the external auditors.  The Committee,
its Chair and any Committee members identified as having accounting or related
financial expertise are Trustees, appointed to the Committee to provide broad
oversight of the financial, risk and control related activities of the Trust,
and are specifically not accountable or responsible for the day to day operation
or performance of

D-5

---

such
activities.  Although the designation of a Committee member as having
accounting or related financial expertise for disclosure purposes is based on
that individual's education and experience, which that individual will bring
to bear in carrying out his or her duties on the Committee, such designation
does not impose on such person any duties, obligations or liability that are
greater than the duties, obligations and liability imposed on such person as a
member of the Committee and a Trustee in the absence of such designation.
 Rather, the role of a Committee member who is identified as having
accounting or related financial expertise, like the role of all Committee
members, is to oversee the process, not to certify or guarantee the internal or
external audit of the Trust's financial information or public disclosure.



D-6



---



Exhibit
B
Audited Consolidated Financial Statements, including consolidated balance sheets as at December 31, 2004 and 2003 and consolidated statements of income, accumulated earnings and cash flows for each of the years in the three-year period ended December 31, 2004 (including a reconciliation to US
GAAP).

| | M
      A N A G E M E N T ' S   R E P O R T | 
| | ------------------------------------------- | 

F
E B R U A R Y   2 8 ,   2 0 0 5

The
accompanying consolidated financial statements and related financial information
are the responsibility of management, have been prepared in accordance with
generally accepted accounting principles in Canada and necessarily include
amounts that reflect management's judgment and best estimates. Financial
information contained elsewhere in this Annual Report is consistent with the
consolidated financial statements.

Management
has established systems of accounting and internal control that provide
reasonable assurance that assets are safeguarded from loss or unauthorized use,
and produce reliable accounting records for the preparation of financial
information. Policies and procedures are maintained to support the accounting
and internal control systems and include an established code of business
conduct.

The
independent external auditors, PricewaterhouseCoopers LLP, have conducted an
examination of the consolidated financial statements in accordance with Canadian
generally accepted auditing standards on behalf of the unitholders. The
independent auditors have full and free access to the Audit Committee.

The
Board of Trustees carries out its responsibility for the consolidated financial
statements principally through its Audit Committee, consisting of three members,
all of whom are unrelated Trustees. This Committee reviews the consolidated
financial statements with management and the independent auditors prior to
submission to the Board for approval. The Audit Committee also recommends to the
Board the independent auditors to be proposed to the unitholders for
appointment. Interim consolidated financial statements are reviewed by the Audit
Committee prior to release to the unitholders.

The
consolidated financial statements are approved by the Board of Trustees on the
recommendation of the Audit Committee.



| | A
      U D I T O R ' S   R E P O R T | 
| | ------------------------------------- | 

TO
THE UNITHOLDERS OF FORDING CANADIAN COAL TRUST

We
have audited the consolidated balance sheets of Fording Canadian Coal Trust as
at December 31, 2004 and 2003 and the consolidated statements of income,
accumulated earnings and cash flows for each of the years in the three-year
period ended December 31, 2004. These consolidated financial statements are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We
conducted our audits in accordance with Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.

In
our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Trust as at December 31, 2004
and 2003 and the results of its operations and its cash flows for each of the
years in the three-year period ended December 31, 2004 in accordance with
Canadian generally accepted accounting principles.

Comments
by Auditors for U.S. Readers on Canada - U.S. Reporting Differences

In
the United States, reporting standards for auditors require the addition of an
explanatory paragraph (following the opinion paragraph) when there is a change
in accounting principles that has a material effect on the comparability of the
Trust's financial statements, such as the change described in note 3 to the
financial statements. Our report to the unitholders dated February 28, 2004 is
expressed in accordance with Canadian reporting standards which do not require a
reference to such a change in accounting principles in the auditor's report
when the change is properly accounted for and adequately disclosed in the
financial statements.



CHARTERED
ACCOUNTANTS
CALGARY, ALBERTA, CANADA
FEBRUARY 28, 2005

2004
Annual Report |69

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F
O R D I N G   C A N A D I A N   C O A L   T R U S
T

|CONSOLIDATED
      BALANCE SHEETS                                                                                     |                        
|--------------------------------------------------------------------------------------------------------------------- | -----------------------
|                                                                                                                      | As
      at December 31
|                                                                                                                      |                        
|(millions
      of Canadian dollars)                                                                                  | 2004                   
|ASSETS                                                                                                                |                        
|Current
      assets                                                                                                  |                        
|Cash
      and cash equivalents                                                                                       | $                      
|Accounts
      receivable                                                                                             |                        
|Inventory(note
      5)                                                                                               |                        
|Prepaid
      expenses                                                                                                |                        
|                                                                                                                      |                        
|Capital
      assets(note
      6)                                                                                    |                        
|                                                                                                                      |                        
|Goodwill                                                                                                              |                        
|                                                                                                                      |                        
|Other
      assets(note
      7)                                                                                      |                        
|                                                                                                                      | $                      
|                                                                                                                      |                        
|LIABILITIES                                                                                                           |                        
|Current
      liabilities                                                                                             |                        
|Accounts
      payable and accrued liabilities                                                                        | $                      
|Income
      taxes payable                                                                                            |                        
|Distributions
      payable                                                                                           |                        
|Current
      portion of long-term debt                                                                               |                        
|                                                                                                                      |                        
|Long-term
      debt(note
      8)                                                                                    |                        
|Other
      long-term liabilities(note
      9)                                                                       |                        
|Future
      income taxes(note
      10)                                                                              |                        
|Commitments
      and contingencies(note
      11)                                                                    |                        
|                                                                                                                      |                        
|                                                                                                                      |                        
|UNITHOLDERS'
      EQUITY(note
      12)                                                                              |                        
|Trust
      units                                                                                                     |                        
|Accumulated
      earnings                                                                                            |                        
|Accumulated
      cash distributions                                                                                  |                        
|Foreign
      currency translation adjustments                                                                        |                        
|                                                                                                                      |                        
|                                                                                                                      | $                      
|The
      accompanying notes to the consolidated financial statements are an
      integral part of these statements. |                        
|Approved
      by the Board of Trustees:                                                                              |                        
|                                                                                                                      |                        

70
| 2004
Annual Report

---

F
O R D I N G   C A N A D I A N   C O A L   T R U S
T

|CONSOLIDATED
      STATEMENTS OF INCOME AND LOSS                                                                      |                               |         |      |                               |         |                        |   |         | 
|--------------------------------------------------------------------------------------------------------------------- | ----------------------------- | ------- | ---- | ----------------------------- | ------- | ---------------------- | - | ------- | 
|                                                                                                                      | Years
      ended December 31 |        
|                                                                                                                      |                               |         |      | Restated
      (note
      3) |         | Restated(note
      3) |  
|(millions
      of Canadian dollars, except per unit amounts)                                                         | 2004                          |         | 2003 |                               | 2002    |                       
|Revenues                                                                                                              | $                             | 1,167.5 |      | $                             | 1,043.7 |                        | $ | 869.5   | 
|                                                                                                                      |                               |         |      |                               |         |                        |   |         | 
|Expenses                                                                                                              |                               |         |      |                               |         |                        |   |         | 
|Cost
      of product sold                                                                                            |                               | 454.4   |      |                               | 448.8   |                        |   | 341.5   | 
|Transportation
      and other                                                                                        |                               | 449.2   |      |                               | 384.6   |                        |   | 326.3   | 
|Selling,
      general and administration                                                                             |                               | 32.8    |      |                               | 25.9    |                        |   | 22.5    | 
|Depreciation
      and depletion                                                                                      |                               | 60.7    |      |                               | 61.3    |                        |   | 63.9    | 
|                                                                                                                      |                               | 997.1   |      |                               | 920.6   |                        |   | 754.2   | 
|Income
      from operations                                                                                          |                               | 170.4   |      |                               | 123.1   |                        |   | 115.3   | 
|                                                                                                                      |                               |         |      |                               |         |                        |   |         | 
|Other
      income (expense)                                                                                          |                               |         |      |                               |         |                        |   |         | 
|Interest
      expense                                                                                                |                               | (12.8)  |      |                               | (15.1)  |                        |   | (5.6)   | 
|Other,
      net(note
      14)                                                                                       |                               | 17.0    |      |                               | 6.1     |                        |   | (139.9) | 
|Gain
      (loss) on corporate reorganization(note
      15)                                                          |                               | (37.5)  |      |                               | 48.7    |                        |   | (11.5)  | 
|Income
      (loss) before taxes and discontinued operations                                                          |                               | 137.1   |      |                               | 162.8   |                        |   | (41.7)  | 
|Income
      tax (recovery) expense(note
      10)                                                                    |                               | (13.0)  |      |                               | 0.6     |                        |   | 49.1    | 
|Income
      (loss) before discontinued operations                                                                    |                               | 150.1   |      |                               | 162.2   |                        |   | (90.8)  | 
|Discontinued
      operations(note
      15)                                                                          |                               | -       |      |                               | 78.7    |                        |   | 18.9    | 
|Net
      income (loss)                                                                                               | $                             | 150.1   |      | $                             | 240.9   |                        | $ | (71.9)  | 
|                                                                                                                      |                               |         |      |                               |         |                        |   |         | 
|Weighted
      average number of units outstanding (millions)(note
      12)                                          |                               | 48.5    |      |                               | 47.4    |                        |   | 51.4    | 
|                                                                                                                      |                               |         |      |                               |         |                        |   |         | 
|Basic
      and diluted earnings per unit                                                                             |                               |         |      |                               |         |                        |   |         | 
|Before
      discontinued operations                                                                                  | $                             | 3.09    |      | $                             | 3.42    |                        | $ | (1.77)  | 
|Net
      income (loss)                                                                                               | $                             | 3.09    |      | $                             | 5.08    |                        | $ | (1.40)  | 
|The
      accompanying notes to the consolidated financial statements are an
      integral part of these statements. |                               |         |      |                               |         |                        |   |         | 



|CONSOLIDATED
      STATEMENTS OF ACCUMULATED EARNINGS                                                                 |                               |       |                        |   |                        |     
|--------------------------------------------------------------------------------------------------------------------- | ----------------------------- | ----- | ---------------------- | - | ---------------------- | ----
|                                                                                                                      | Years
      ended December 31 |      
|                                                                                                                      |                               |       | Restated(note
      3) |   | Restated(note
      3) |     
|(millions
      of Canadian dollars)                                                                                  | 2004                          |       | 2003                   |   |                        | 2002
|Balance
      - beginning of year                                                                                     | $                             | 190.5 |                        | $ | 300.6                  |     
|Net
      income (loss)                                                                                               |                               | 150.1 |                        |   | 240.9                  |     
|Adjustment
      for adoption of new accounting standard for asset retirement obligations(note
      3)               |                               | -     |                        |   | -                      |     
|Dividends                                                                                                             |                               | -     |                        |   | -                      |     
|Repurchase
      of units/capital stock                                                                               |                               | -     |                        |   | (351.0)                |     
|Balance
      - end of year                                                                                           | $                             | 340.6 |                        | $ | 190.5                  |     
|The
      accompanying notes to the consolidated financial statements are an
      integral part of these statements. |                               |       |                        |   |                       

2004
Annual Report |71

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F
O R D I N G   C A N A D I A N   C O A L   T R U S
T

|CONSOLIDATED
      STATEMENTS OF CASH FLOWS                                                                           |                               |         |      |                        |         |                        |   |        | 
|--------------------------------------------------------------------------------------------------------------------- | ----------------------------- | ------- | ---- | ---------------------- | ------- | ---------------------- | - | ------ | 
|                                                                                                                      | Years
      ended December 31 |        
|                                                                                                                      |                               |         |      | Restated(note
      3) |         | Restated(note
      3) |  
|(millions
      of Canadian dollars)                                                                                  | 2004                          |         | 2003 |                        | 2002    |                       
|Operating
      activities                                                                                            |                               |         |      |                        |         |                        |   |        | 
|Net
      income (loss)                                                                                               | $                             | 150.1   |      | $                      | 240.9   |                        | $ | (71.9) | 
|Items
      not using (providing) cash:                                                                               |                               |         |      |                        |         |                        |   |        | 
|Depreciation
      and depletion                                                                                      |                               | 58.6    |      |                        | 62.3    |                        |   | 70.7   | 
|Loss
      (gain) on disposal of assets                                                                               |                               | 0.2     |      |                        | (202.8) |                        |   | 0.4    | 
|Provision
      for asset retirement obligations                                                                      |                               | 3.0     |      |                        | 2.8     |                        |   | 1.0    | 
|Future
      income taxes                                                                                             |                               | (31.3)  |      |                        | 34.3    |                        |   | 6.8    | 
|Income
      from change in inventory valuation(note
      3)                                                         |                               | (10.8)  |      |                        | -       |                        |   | -      | 
|Loss
      on reduction of interest in EVCP                                                                           |                               | 35.2    |      |                        | -       |                        |   | -      | 
|Provision
      for asset write-down(note
      14)                                                                   |                               | -       |      |                        | -       |                        |   | 140.0  | 
|Other
      items, net                                                                                                |                               | 0.3     |      |                        | 0.9     |                        |   | (6.7)  | 
|                                                                                                                      |                               | 205.3   |      |                        | 138.4   |                        |   | 140.3  | 
|Decrease
      (increase) in non-cash working capital(note
      16)                                                  |                               | 64.2    |      |                        | 35.9    |                        |   | (31.5) | 
|Cash
      from operating activities                                                                                  |                               | 269.5   |      |                        | 174.3   |                        |   | 108.8  | 
|                                                                                                                      |                               |         |      |                        |         |                        |   |        | 
|Investing
      activities                                                                                            |                               |         |      |                        |         |                        |   |        | 
|Additions
      to capital assets                                                                                     |                               | (72.8)  |      |                        | (20.4)  |                        |   | (51.5) | 
|Proceeds
      on disposal of assets                                                                                  |                               | 1.1     |      |                        | 362.8   |                        |   | 1.2    | 
|Cash
      payment for Luscar assets                                                                                  |                               | -       |      |                        | (12.3)  |                        |   | -      | 
|Other
      investing activities, net                                                                                 |                               | 12.2    |      |                        | (8.1)   |                        |   | (0.4)  | 
|Cash
      from (used in) investing activities                                                                        |                               | (59.5)  |      |                        | 322.0   |                        |   | (50.7) | 
|                                                                                                                      |                               |         |      |                        |         |                        |   |        | 
|Financing
      activities                                                                                            |                               |         |      |                        |         |                        |   |        | 
|Increase
      (decrease) in long-term debt                                                                           |                               | (99.0)  |      |                        | 165.0   |                        |   | 4.0    | 
|Increase
      (decrease) in bank indebtedness                                                                        |                               | -       |      |                        | (1.1)   |                        |   | 0.2    | 
|Issuance
      of units, net                                                                                          |                               | 100.4   |      |                        | 12.3    |                        |   | 0.7    | 
|Repurchase
      of units/capital stock                                                                               |                               | -       |      |                        | (377.1) |                        |   | (38.5) | 
|Payments
      under the Arrangement(note
      12)                                                                   |                               | -       |      |                        | (75.3)  |                        |   | -      | 
|Other
      financing activities, net                                                                                 |                               | (2.7)   |      |                        | (4.2)   |                        |   | -      | 
|Financing
      activities, before distributions                                                                      |                               | (1.3)   |      |                        | (280.4) |                        |   | (33.6) | 
|Financing
      activities related to distributions/dividends(note
      16)                                          |                               | (196.7) |      |                        | (163.4) |                        |   | (28.2) | 
|Cash
      used in financing activities                                                                               |                               | (198.0) |      |                        | (443.8) |                        |   | (61.8) | 
|Increase
      (decrease) in cash and cash equivalents                                                                |                               | 12.0    |      |                        | 52.5    |                        |   | (3.7)  | 
|                                                                                                                      |                               |         |      |                        |         |                        |   |        | 
|Cash
      and cash equivalents - beginning of year                                                                   |                               | 52.5    |      |                        | -       |                        |   | 3.7    | 
|Cash
      and cash equivalents                                                                                       | $                             | 64.5    |      | $                      | 52.5    |                        | $ | -      | 
|The
      accompanying notes to the consolidated financial statements are an
      integral part of these statements. |                               |         |      |                        |         |                        |   |        | 

72
| 2004
Annual Report

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N
O T E S   T O   C O N S O L I D A T E D   F I N A
N C I A L   S T A T E M E N T S

|1 | STRUCTURE
      OF FORDING CANADIAN COAL TRUST AND NATURE OF OPERATIONS
|- | -----------------------------------------------------------------------

Fording
Canadian Coal Trust (the Trust) is an open-ended mutual fund trust existing
under the laws of the Province of Alberta. It was created pursuant to a
Declaration of Trust and formed as part of the Plan of Arrangement effective
February 28, 2003 (the Arrangement).

The
Arrangement has been accounted for as a continuity of interests whereby these
consolidated financial statements reflect the financial position, results of
operations and cash flows as if the Trust had always carried on the businesses
formerly carried on by its predecessor company, Fording Inc., being the public
company existing prior to the Arrangement (Old Fording). All assets and
liabilities are recorded at historical cost.

The
Trust holds all of the shares and subordinated notes of its operating subsidiary
company, Fording Inc. (the "Corporation"). The Corporation is the successor
to Fording Coal Limited/Les Charbons Fording Limitee and Old Fording. The
Corporation was continued under the CBCA as 4123212 Canada Ltd. but changed its
name to "Fording Inc." as part of the Arrangement.

The
Arrangement also created the Elk Valley Coal Partnership (EVCP) by combining the
metallurgical coal mining operations and assets formerly owned by Old Fording
(Fording River, Greenhills and Coal Mountain mines), Teck Cominco Limited
(Elkview mine) and the Luscar/CONSOL Joint Ventures (Line Creek and Cardinal
River mines and a 46% interest in Neptune Bulk Terminals (Canada) Ltd. in
Vancouver). At the date of the Arrangement the Corporation held a 65% interest
in EVCP. At that time, the remaining 35% interest in EVCP was held by Teck
Cominco and its affiliates.

The
agreement governing EVCP provided for an increase in Teck Cominco's interest
to a maximum of 40% to the extent that synergies from the combination of various
metallurgical coal assets contributed to EVCP exceed certain target levels. At
December 31, 2004, Teck Cominco's interest had increased to 38%, as discussed
in note 15. The change in interest resulted in a pro-rata reduction in the Trust's
share of all of the assets and liabilities of EVCP and a non-cash charge to
earnings of $37.5 million reduced by additional distribution entitlements
expected through March 31, 2006.

The
Corporation also owns a 100% interest in NYCO which, prior to the Arrangement,
was a wholly owned subsidiary of Old Fording. NYCO mines and processes
wollastonite and other industrial minerals at two operations in the United
States and one operation in Mexico.

These
financial statements reflect the results of operations and cash flows of Old
Fording for the period January 1 to February 28, 2003 and the results of
operations and cash flows of the Trust thereafter. Due to the Arrangement,
conversion into an income trust, and the change in the Trust's interest in
EVCP, certain information included in the consolidated financial statements for
prior periods may not be directly comparable.

|2 | SIGNIFICANT
      ACCOUNTING POLICIES
|- | -------------------------------------

B
A S I S   O F   P R E S E N T A T I O N

The
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles in Canada and include the accounts of
the Trust and its subsidiaries, all of which are wholly owned. The material
differences between Canadian and United States generally accepted accounting
principles, insofar as they apply to the Trust, are discussed in note 19.

A
significant portion of the Trust's results are from activities conducted on a
joint-venture basis. The consolidated financial statements reflect the Trust's
proportionate interest in such ventures, as disclosed in note 16. A joint
venture is an economic activity resulting from a contractual arrangement whereby
two or more venturers jointly control the economic activity. Joint control of an
economic activity is the contractually agreed sharing of the continuing power to
determine its strategic operating, investing and financing policies.

2004
Annual Report |73

---

Investments
in companies in which the Trust has significant influence over the operating,
investing and financing decisions, are accounted for using the equity method.

M
A N A G E M E N T   E S T I M A T E S

The
consolidated financial statements include certain management estimates that may
require accounting adjustments based on future occurrences. The most significant
estimates relate to depletion, depreciation, asset impairment test calculations
for capital assets, asset retirement obligations and employee future benefits as
all of these calculations are based on reserve estimates and/or estimated future
costs. Actual results could differ from those estimates.

C
A S H   A N D   C A S H   E Q U I V A L E N T S

Temporary
investments with maturities of three months or less at the time of purchase are
considered to be cash equivalents and are recorded at cost, which approximates
market value.

I
N V E N T O R Y

Product
and raw materials inventory are valued at the lower of average cost and net
realizable value.

Stores
and materials inventory is valued at the lower of actual cost and net realizable
value. Actual costs represent the delivered price of the item.

C
A P I T A L   A S S E T S

Land,
buildings and equipment are recorded at cost; maintenance and repairs of a
routine nature are expensed as incurred. Buildings are depreciated on the
straight-line basis over their useful lives, ranging from 15 to 40 years.
Equipment is depreciated on the straight-line basis over its useful life, based
on the number of hours in operation, which ranges from 5 to 35 years.

Mineral
properties and development include expenditures to acquire and develop
identified mineral properties and reserves and net costs relating to production
during the development phase. Depletion on producing properties is provided
using a unit of production method based upon the proven and probable mineral
reserve position of the mine. Development costs incurred to expand the capacity
of operating mines, to develop new ore bodies or to develop mine areas
substantially in advance of current production are capitalized and charged to
operations on a unit of production method based upon the proven and probable
mineral reserves.

Exploration
costs are charged to earnings in the period in which they are incurred, except
where these costs relate to specific properties for which economically
recoverable reserves have been established, in which case they are capitalized.
Upon commencement of production, these capitalized costs are charged to
operations on a unit of production method based upon the proven and probable
mineral reserves.

When
the net carrying value of a capital asset, less its related asset retirement
obligation net of related future income taxes, exceeds the estimated
undiscounted future net cash flows together with its residual value, the asset
is written down to its fair value. Capital assets are tested for impairment
whenever events or circumstances indicate the carrying amount may not be
recoverable.

G
O O D W I L L

Goodwill
is the excess of the cost of the acquired investment over the fair value amounts
assigned to the assets acquired and liabilities assumed. Goodwill is tested for
impairment annually. An impairment loss would be recognized when the carrying
value of the goodwill exceeds its fair value.

R
E S E A R C H   A N D   D E V E L O P M E N T

Research
costs are charged to earnings in the period in which they are incurred.

Development
costs related to products and processes for which the technical and economic
feasibilities are established are deferred until commercial production or until
the process is in use, at which point they are amortized over the useful life of
the asset.

74
| 2004
Annual Report

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C
A P I T A L I Z E D   I N T E R E S T

Interest
is capitalized on major capital projects under development based on the
borrowing rate related to the project or the average cost of borrowing.

A
S S E T   R E T I R E M E N T   O B L I G A T I O N S

Asset
retirement obligations are recognized in the period in which they are incurred
if a reasonable estimate of fair value can be determined. The fair value of the
estimated asset retirement costs is capitalized as part of the carrying amount
of the long-lived asset when incurred and amortized to earnings over the asset's
estimated useful life. Increases in the asset retirement obligations resulting
from the passage of time are recorded as accretion expense. Actual expenditures
incurred are charged against the accumulated obligation. The asset retirement
obligation is reviewed by management annually and revised for changes in future
estimated costs and regulatory requirements.

F
O R E I G N   C U R R E N C Y   T R A N S L A T I O N

Foreign
currency denominated transactions are translated at the exchange rate in effect
on the date of the transaction. Monetary assets and liabilities denominated in
foreign currencies are translated into Canadian dollars at period-end exchange
rates and any gain or loss is charged to earnings, except when hedged.

The
functional currency and therefore the unit of measure of the Trust's NYCO
operations is the United States dollar. The financial statements of the Mexican
component of these operations are remeasured from Mexican pesos into United
States dollars using the year-end exchange rate for monetary assets and
liabilities, and the historical exchange rates for non-monetary assets and
liabilities. Foreign currency revenues and expenses are remeasured at the
exchange rate in effect on the dates of the related transactions, except for
provisions for depreciation and depletion, which are remeasured on the same
basis as the related assets. Foreign currency transaction gains and losses are
included in income immediately.

The
United States dollar accounts of the NYCO operations are translated into
Canadian dollars, the reporting currency of the Trust, using the current rate
method. Assets and liabilities are translated using the year-end exchange rates
for assets and liabilities, and revenues and expenses are translated at the
average exchange rates in effect for the year. Exchange gains or losses arising
from translation are recorded in unitholders' equity as foreign currency
translation adjustments.

F
I N A N C I A L   I N S T R U M E N T S

The
Trust utilizes financial instruments to manage its foreign currency exposure to
changes in the U.S. dollar exchange rate. The Trust's policy is to not employ
derivative financial instruments for trading or speculative purposes.

The
Trust formally documents relationships between hedging instruments and hedged
items, as well as its risk management objective and strategy for undertaking
various hedge transactions. The effectiveness of the hedging relationship is
also formally documented and measured.

The
gains and losses on derivative instruments used as hedges are recognized in
income in the period that the hedged exposure is recognized in income, which is
the same period in which the instrument is settled. The gain or loss is netted
against the item that was hedged.

R
E V E N U E   R E C O G N I T I O N

Sales
revenues are recognized when the risks and rewards of ownership pass to the
customer. For coal sales, this occurs when the coal is either loaded onto a
train or an ocean going vessel or when it is unloaded at the final destination,
depending on the terms of the sales contract. NYCO revenues are recognized upon
shipment to customers from the plant or warehouse.

I
N C O M E   T A X E S

The
Corporation recognizes future tax assets and liabilities based on differences
between the value of assets and liabilities in the financial statements and
their values for income tax purposes, using substantially enacted tax rates. The
effect of changes in income tax rates on future income tax assets and
liabilities is recognized in the period that the change occurs. A future tax
asset is recognized if it is more likely than not to be realized.

2004
Annual Report |75

---

S
T O C K - B A S E D   C O M P E N S A T I O N

The
Trust adopted the fair-value method of accounting for stock-based compensation
related to unit options for all awards granted, modified or settled on or after
January 1, 2003. Prior to this date, the exercise price of stock options issued
to employees was equivalent to the market price at the time of the grant;
therefore no compensation expense was recognized when the options were issued.

E
M P L O Y E E   F U T U R E   B E N E F I T S

The
costs of pensions and other post-retirement benefits (primarily health care and
life insurance) are actuarially determined using the projected benefit method
prorated on service and management's best estimate of expected plan investment
performance, salary escalation, retirement ages of employees and expected costs.
The expected return on plan assets is estimated based on the fair value of plan
assets. The projected benefit obligation is discounted using a market interest
rate for high quality corporate debt instruments at year-end.

For
defined benefit plans, employee future benefit expense includes the cost of
pension benefits earned during the current year, the interest cost on pension
obligations, the expected return on pension plan assets, the amortization of
adjustments arising from pension plan amendments, and the amortization of the
amount by which the actuarial gains or losses exceed 10% of the greater of the
benefit obligation and the market related value of plan assets. The amortization
period for adjustments and net actuarial gains or losses is the expected average
remaining service lives of employees covered by the various plans.

Costs
under defined contribution pension plans are expensed when the contributions are
made.

The
costs of post-retirement benefits, other than pensions, are recognized on an
accrual basis over the estimated remaining service lives of employees.

R
E C L A S S I F I C A T I O N

Certain
prior years' figures have been reclassified to conform to the presentation
adopted in 2004.

|3 | CHANGES
      IN ACCOUNTING POLICIES
|- | ------------------------------------

A
S S E T   R E T I R E M E N T   O B L I G A T I O N S

Effective
January 1, 2004, the Trust adopted the CICA Handbook Section 3110, "Asset
Retirement Obligations", and applied the recommendations retroactively. This
standard focuses on the recognition, measurement and disclosure of legal
obligations and costs associated with the retirement of long-lived capital
assets that result from the acquisition, construction, development or normal
operation of those assets.

Previously,
the Trust accrued for reclamation costs expected to be incurred at the
completion of mining activities based on known or estimated costs on an
undiscounted unit of production basis.

As
a result of the retroactive adoption of this standard, 2002 opening accumulated
earnings increased by $9.8 million and net income decreased by $1.0 million.
2003 net income decreased by $2.3 million, capital assets increased by $39.2
million, goodwill decreased by $5.2 million, other long-term liabilities
increased by $13.0 million and future income taxes increased by $14.5 million.

G
E N E R A L L Y   A C C E P T E D   A C C O U N T I N
G   P R I N C I P L E S

CICA
Handbook Section 1100, "Generally Accepted Accounting Principles", became
effective for fiscal years beginning on or after October 1, 2003. This standard
focuses on what constitutes Canadian Generally Accepted Accounting Principles
and its primary sources. Two accounting practices have been changed to
correspond to guidance with the primary sources of generally accepted accounting
principles.

Revenues
are now reported without deductions for sales commissions and freight costs.
Commissions are included in selling, general and administration costs and
transportation and other costs are included in that caption on the consolidated
statement of income. Revenues continue to be shown net of such items as trade or
volume discounts,

76
| 2004
Annual Report

---

the
benefits or costs of foreign currency hedging activities, returns and
allowances, and claims for damaged goods. This change in classification has no
impact on earnings or cash available for distribution and the comparative
figures have been restated to conform to the presentation adopted for the
current period. Previously, revenues for certain sales transactions were
reported net of sales commissions and related transportation and other costs in
order to report net revenues on a basis consistent with the majority of sales
transactions.

Depreciation,
depletion and amortization are now included in the carrying value of inventory.
The transitional provisions of adopting this standard require prospective
application of changes in accounting policies. Accordingly, effective January 1,
2004, product and raw material inventory increased $10.8 million to include the
cost of depreciation, depletion and amortization, with the corresponding credit
included in other income. Previously, depreciation, depletion and amortization
were treated as period costs.

E
M P L O Y E E   F U T U R E   B E N E F I T S

The
Trust adopted the new disclosure recommendations of the CICA Handbook section
3461, "Employee Future Benefits", effective June 30, 2004.

|4 | DISTRIBUTABLE
      CASH
|- | ------------------------

Distributable
cash is a term defined in the Declaration of Trust and generally refers to the
net cash received by the Trust that is available for payment to unitholders'
on a quarterly basis. Available cash generated by the Corporation is the
principal contributor to distributable cash of the Trust. The Corporation
distributes its available cash to the Trust each quarter, which is derived from
results for the quarter and takes into account other considerations such as
expected future performance, variations in levels of quarterly operating and
capital activities and other financial or legal requirements. Future
distributions of available cash will take into account these factors and any
amounts paid in prior periods that were greater or less than the actual
distributable cash for those prior periods.

|CASH
      AVAILABLE FOR DISTRIBUTION                                    |                                   |        |                                          |   |       
|------------------------------------------------------------------------ | --------------------------------- | ------ | ---------------------------------------- | - | ------
|(millions
      of Canadian dollars)                                     | Year
      ended December 31 2004 |        | Ten
      months ended December 31 20031 |  
|Cash
      flows from operating activities                               | $                                 | 269.5  |                                          | $ | 229.6 
|Add
      (deduct):                                                      |                                   |        |                                          |   |       
|Decrease
      in non-cash working capital                               |                                   | (64.2) |                                          |   | (99.5)
|Sustaining
      capital expenditures, net                               |                                   | (25.9) |                                          |   | (8.7) 
|Capital
      lease payments                                             |                                   | (0.7)  |                                          |   | (1.3) 
|Other                                                                    |                                   | 3.5    |                                          |   | (1.2) 
|Cash
      available for distribution                                    | $                                 | 182.2  |                                          | $ | 118.9 
|Distributions
      declared and payable                                 | $                                 | 213.5  |                                          | $ | 210.3 
|1 The
      period from the formation of the Trust to December 31, 2003. |                                   |        |                                          |   |       

Available
cash generated by the Corporation and paid to the Trust is the principal source
of distributable cash paid to unitholders. Distributions declared and payable in
2004 include $18.5 million of cash available for distribution carried over from
2003. Two events unique to 2003, and which will not be repeated, provided
additional sources of cash amounts paid to unitholders; a special payment under
the Arrangement totalling $70.0 million and the cash flow benefit of the draw
down of coal product inventory to more normal operating levels contributed $39.8
million.

Distributable
cash and cash available for distribution have no standardized meaning and are
not defined by generally accepted accounting principles in Canada. Accordingly,
distributable cash and cash available for distribution as it is presented above
may not be comparable to similarly named measures presented by other trusts.

2004
Annual Report |77

---

|5 | INVENTORY
|- | ---------



|                                     |   | As
      at December 31 | 
|------------------------------------ | - | ----------------------- | 
|(millions
      of Canadian dollars) |   | 2004                    | 
|Product
      and raw materials      | $ | 77.9                    | 
|Stores
      and materials           |   | 35.1                    | 
|                                     | $ | 113.0                   | 



|6 | CAPITAL
      ASSETS
|- | --------------------



|                                         | As
      at December 31, 2004 |        
|---------------------------------------- | ----------------------------- | -------
|(millions
      of Canadian dollars)     | Cost                          |        
|Land,
      buildings and equipment      | $                             | 792.9  
|Mineral
      properties and development |                               | 412.6  
|Capital
      leases                     |                               | 1.6    
|                                         | $                             | 1,207.1



|                                         | As
      at December 31, 2003 |        
|---------------------------------------- | ----------------------------- | -------
|(millions
      of Canadian dollars)     | Cost                          |        
|Land,
      buildings and equipment      | $                             | 778.5  
|Mineral
      properties and development |                               | 443.2  
|Capital
      leases                     |                               | 4.6    
|                                         | $                             | 1,226.3

At
December 31, 2004, $60.8 million (2003 - $50.3 million) was capitalized for
reserves, equipment and coal deposits located on properties not currently being
mined, which are not being amortized. During the year, $0.9 million (2003 - nil)
of interest was capitalized for projects under construction.

|7 | OTHER
      ASSETS
|- | ------------------



|                                            | As
      at December 31 |     
|------------------------------------------- | ----------------------- | ----
|(millions
      of Canadian dollars)        |                         | 2004
|Long-term
      receivables                 | $                       | 9.6 
|Accrued
      pension benefit(note
      9) |                         | 8.2 
|Deferred
      charges                      |                         | 1.2 
|Other                                       |                         | 2.1 
|                                            | $                       | 21.1

78
| 2004
Annual Report

---

|8 | LONG-TERM
      DEBT AND BANKING FACILITIES
|- | -------------------------------------------



|LONG-TERM
      DEBT                                                                                 | As
      at December 31 |      
|---------------------------------------------------------------------------------------------------- | ----------------------- | -----
|(millions
      of Canadian dollars)                                                                 | 2004                    |      
|Bank
      debt                                                                                      |                         |      
|Term
      variable rate bank loans with interest rates varying from 5.6% to 6.3%                    | $                       | 201.0
|Other
      debt                                                                                     |                         |      
|Equipment
      financing due 2009 bearing interest at 5.1%                                          |                         | 5.2  
|Capital
      lease obligations expiring in 2005 with interest rates varying from 5.0%
      to 7.0% |                         | 0.7  
|                                                                                                     |                         | 206.9
|Less
      current portion                                                                           |                         | (1.7)
|                                                                                                     | $                       | 205.2

The
bank debt required $51.0 million to be repaid or refinanced by February 28, 2005
and the remaining $150.0 million by February 28, 2006. In February 2005, the
Corporation and EVCP refinanced their existing bank credit facilities. The new
agreement provides each entity with a five-year revolving, floating rate,
annually extendible facility. The Corporation's facility is for $400.0 million
and EVCP's facility is for $150.0 million. As a result of this refinancing,
the $51.0 million of the existing bank facility due February 28, 2005 is
considered long-term at December 31, 2004.

The
new facilities are supported by an unsecured guarantee from EVCP, limited in
recourse to any partner's interest in EVCP (other than Fording Inc.) and a
general security agreement over the assets of the Corporation including its
interest in EVCP.

At
December 31, 2004, and assuming the new bank facilities were finalized at that
time, the other uses of bank facilities and unused lines of credit are
summarized in the following table:

|                                                                    | As
      at December 31 |      
|------------------------------------------------------------------- | ----------------------- | -----
|(millions
      of Canadian dollars)                                | 2004                    |      
|Other
      use of bank facilities                                  |                         |      
|Issued
      and outstanding letters of credit and guarantee        |                         |      
|Fording
      Inc.                                                  | $                       | 0.1  
|EVCP
      (2004: 60% of $71.2 million; 2003: 65% of $31.6 million) |                         | 42.7 
|                                                                    | $                       | 42.8 
|Unused
      lines of credit                                        |                         |      
|Fording
      Inc.                                                  | $                       | 198.9
|EVCP
      (2004: 60% of $78.8 million; 2003: 65% of $88.3 million) |                         | 47.3 
|                                                                    | $                       | 246.2

2004
Annual Report |79

---

|9 | OTHER
      LONG-TERM LIABILITIES
|- | ---------------------------------



|                                                 | As
      at December 31 |     
|------------------------------------------------ | ----------------------- | ----
|(millions
      of Canadian dollars)             | 2004                    |     
|Asset
      retirement obligations(note
      3) | $                       | 68.9
|Pension
      and other post-retirement benefits |                         | 21.4
|Other,
      net                                 |                         | 1.6 
|                                                 | $                       | 91.9

A
s s e t   r e t i r e m e n t   o b l i g a t i o n s

Asset
retirement obligations are based on known or estimated costs to reclaim all
disturbed sites to meet existing regulatory standards. The estimated costs
include allowances for the reclamation of all pits, spoils, tailings ponds and
mine infrastructure and are based on the existing cost structure for these
activities at each of the operations. Reclamation is normally carried out
continuously over the life of each mining operation and is largely controlled by
the rate that mining progresses over specific areas as those areas become
available for reclamation. Reclamation plans and scheduling are predicated on
completing a large proportion of the outstanding reclamation prior to depleting
the reserves contained in the long-range mine plan. These obligations are funded
from cash from general resources at the time reclamation work is completed.

The
following table presents the reconciliation of asset retirement obligations:

|                                     | As
      at December 31 |      
|------------------------------------ | ----------------------- | -----
|(millions
      of Canadian dollars) | 2004                    |      
|Balance
      - beginning of year    | $                       | 58.1 
|Liabilities
      incurred           |                         | 12.3 
|Liabilities
      settled            |                         | (1.1)
|Accretion
      expense              |                         | 4.2  
|Other                                |                         | (4.6)
|Balance
      - end of year          | $                       | 68.9 

Asset
retirement obligations and costs are periodically reviewed by management and are
revised for changes in future estimated costs and regulatory requirements. The
total undiscounted amount of the estimated obligation is $135.1 million, which
using a credit adjusted risk-free rate, results in a discounted obligation of
$68.9 million at December 31, 2004.

P
e n s i o n   a n d   o t h e r   p o s t - r e t
i r e m e n t   b e n e f i t   o b l i g a t i o n s

|                                     | As
      at December 31 |     
|------------------------------------ | ----------------------- | ----
|(millions
      of Canadian dollars) | 2004                    |     
|Pensions                             | $                       | 9.2 
|Other
      post-retirement benefits |                         | 12.2
|                                     | $                       | 21.4

Substantially
all employees participate in either a defined benefit or defined contribution
pension plan.

There
are several defined contribution plans which provide for some matching by the
employees. Two of these plans are for the Trust's NYCO operations in the
United States, and the remaining relate to the Elk Valley Coal

80
| 2004
Annual Report

---

operations.
The cost of these plans for the year ended December 31, 2004 was $2.4 million
(2003 - $1.9 million; 2002 - $1.3 million), which includes the employer
contributions and payments to third-party service providers.

There
are six defined benefit plans, all of which are non-contributory. Three of these
plans are for the Trust's Elk Valley Coal operations while the other three
relate to the NYCO operations in the United States. The benefits are determined
using two alternative methodologies depending on the plan. Under the "best
average pay plan" the pension benefit is determined by applying a formula to
the best average earnings over a given period. Under the "flat benefit", the
pension benefit is a fixed dollar amount per month for each year of service. The
defined benefit plan liabilities have been updated to reflect actuarial economic
assumptions at December 31, 2004.

Five
of the defined benefit plans had actuarial valuations completed as at December
31, 2003 and one plan was completed at December 31, 2002. Under the applicable
legislation, actuarial valuations are to be completed on a three-year cycle in
Canada, and annually in the United States. The purpose of the actuarial
valuation is to confirm the actuarial liability relating to members in the plan
and establish the contributions that are required to be made in order to fund
the plan from the date of the actuarial valuation to the effective date of the
next actuarial valuation.

Annual
contributions are made on the basis of not less than the minimum amounts
required by legislation. Contributions are expected to be $5.2 million for the
year ending December 31, 2005.

Defined
benefit pension expense includes the following components:

|                                                                           | As
      at December 31 |       
|-------------------------------------------------------------------------- | ----------------------- | ------
|(millions
      of Canadian dollars)                                       | 2004                    |       
|Current
      service cost of benefits earned by employees in the period   | $                       | 4.6   
|Interest
      cost on projected benefit obligation                        |                         | 8.1   
|Actual
      return on pension fund assets                                 |                         | (12.7)
|Difference
      between actual and expected rate of return on plan assets |                         | 5.8   
|Amortization
      of actuarial gains                                      |                         | 0.6   
|Amortization
      of past service costs                                   |                         | 0.8   
|Other                                                                      |                         | -     
|Net
      pension expense                                                  | $                       | 7.2   

The
"corridor approach" is used to account for defined benefit pension plans.
This allows for the deferral and amortization of certain actuarial gains or
losses and past service costs. If this methodology was not employed, the
following expense would represent the net pension expense on the income
statement:

|                                                                                                              | As
      at December 31 |      
|------------------------------------------------------------------------------------------------------------- | ----------------------- | -----
|(millions
      of Canadian dollars)                                                                          |                         | 2004 
|Net
      pension expense above                                                                               | $                       | 7.2  
|Amounts
      deferred for later recognition:                                                                 |                         |      
|Difference
      between expected and actual return on plan assets                                            |                         | (5.8)
|Amortization
      of past service costs                                                                      |                         | (0.8)
|Difference
      between amortization of actuarial losses (gains) and actuarial losses
      (gains) incurred |                         | 21.1 
|Adjusted
      net pension expense                                                                            | $                       | 21.7 

2004
Annual Report|81

---

Information
about the defined benefit pension plans, in aggregate, is as follows:

|                                                    | Years
      ended December 31 |       
|--------------------------------------------------- | ----------------------------- | ------
|(millions
      of Canadian dollars)                | 2004                          |       
|                                                    |                               |       
|Changes
      in benefit obligations                |                               |       
|Benefit
      obligations - beginning of year       | $                             | 118.1 
|Actuarial
      revaluation                         |                               | 10.0  
|Current
      service cost                          |                               | 4.6   
|Interest
      cost                                 |                               | 8.1   
|Benefits
      paid                                 |                               | (5.3) 
|Decrease
      in discount rate                     |                               | 10.6  
|Changes
      resulting from the Arrangement        |                               | -     
|Other                                               |                               | (6.3) 
|Benefit
      obligations - end of year             |                               | 139.8 
|                                                    |                               |       
|Change
      in fund assets                         |                               |       
|Fair
      value of fund assets - beginning of year |                               | 101.4 
|Actual
      return on fund assets                  |                               | 12.7  
|Employer
      contributions                        |                               | 9.4   
|Benefits
      paid                                 |                               | (5.3) 
|Changes
      resulting from the Arrangement        |                               | -     
|Other                                               |                               | (5.6) 
|Fair
      value of fund assets - end of year       |                               | 112.6 
|                                                    |                               |       
|Funded
      status - plan deficit                  |                               | (27.2)
|Unamortized
      prior service cost                |                               | 2.0   
|Unamortized
      net actuarial loss                |                               | 24.2  
|Accrued
      benefit liability                     | $                             | (1.0) 
|                                                    |                               |       
|Represented
      by:                               |                               |       
|Accrued
      benefit assets(note
      7)          | $                             | 8.2   
|Accrued
      pension liability                     |                               | (9.2) 
|                                                    | $                             | (1.0) 

Included
in the above accrued benefit obligation and fair value of the plan assets at
year-end are the following amounts in respect of the plans that are not fully
funded:

|                                     | As
      at December 31 |        
|------------------------------------ | ----------------------- | -------
|(millions
      of Canadian dollars) | 2004                    |        
|Benefit
      obligation             | $                       | (130.5)
|Fair
      value of fund assets      |                         | 101.0  
|Funded
      status - plan deficit   | $                       | (29.5) 

82
|2004
Annual Report

---

Pension
fund assets consist of the following investments based on fair market values:

|                                               | As
      at December 31 |      
|---------------------------------------------- | ----------------------- | -----
|(millions
      of Canadian dollars)           | 2004                    |      
|Cash
      and cash equivalents                | $                       | 6.5  
|Fixed
      income                             |                         | 34.9 
|Canadian
      equity                          |                         | 37.5 
|U.S.
      equity                              |                         | 21.9 
|European,
      Australian and Far East equity |                         | 11.8 
|                                               | $                       | 112.6

Included
in the above defined benefit assets are investments in related parties which are
0.6% of the total fair market value at December 31, 2004.

Actuarial
assumptions used to calculate the defined benefit pension expense and benefit
obligations and post-retirement benefit expense and obligations are:

|                                                           | Years
      ended December 31 | 
|---------------------------------------------------------- | ----------------------------- | 
|                                                           | 2004                          | 
|Discount
      rate for plan expense                       | 6.5%                          | 
|Discount
      rate for plan obligations                   | 6.0%                          | 
|Projected
      future salary increases                    | 4.0%                          | 
|Expected
      rate of return on fund assets               | 6.5%                          | 
|Projected
      health care increases:                     |                               | 
|Provincial                                                 | 3.0%                          | 
|Extended
      care                                        | 10.0%                         | 
|Assumed
      health care cost trend rate*                 | 10.0%
      to 5.0%           | 
|*Ultimate
      trend rate expected to be achieved in 2014 |                               | 

In
addition to pension benefits, other post-retirement benefits including
health-care and life-insurance benefits are provided for retired employees.
These benefits are unfunded. For the year ended December 31, 2004, the net costs
of post-retirement benefits that are included in selling, general and
administrative expense amounted to:

|                                                     |   | Years
      ended December 31 |  |  
|---------------------------------------------------- | - | ----------------------------- |  | -
|(millions
      of Canadian dollars)                 |   | 2004                          |  |  
|Current
      service costs                          | $ | 0.7                           |  | $
|Interest
      costs on projected benefit obligation |   | 0.9                           |  |  
|Changes
      to post-retirement benefits available  |   | -                             |  |  
|Changes
      resulting from the Arrangement         |   | -                             |  |  
|                                                     | $ | 1.6                           |  | $

S
e n s i t i v i t i e s

A
one percentage point change in health care costs would have the following impact
on the components of other post-retirement benefit obligations:

|(millions
      of Canadian dollars)                         | 1%
      increase |     | 1%
      decrease |  
|------------------------------------------------------------ | ----------------- | --- | ----------------- | -
|Increase
      (decrease) in total service and interest cost | $                 | 0.1 |                   | $
|Increase
      (decrease) in benefit obligation              | $                 | 0.6 |                   | $

2004
Annual Report |83

---

|10 | INCOME
      TAXES
|-- | ------------------

Income
tax expense is made up of the following components:

|                                                   | Years
      ended December 31 |       
|-------------------------------------------------- | ----------------------------- | ------
|(millions
      of Canadian dollars)               | 2004                          |       
|Current
      income taxes:                        |                               |       
|Canadian
      income taxes                        | $                             | 2.6   
|Provincial
      mineral taxes and Crown royalties |                               | 11.7  
|Foreign
      income taxes                         |                               | 4.0   
|                                                   |                               | 18.3  
|Future
      income tax (recovery)                 |                               | (31.3)
|Total
      income taxes                           | $                             | (13.0)

The
following table reconciles the income tax expense calculated using statutory tax
rates to the actual income tax expense:

|                                                                                                             | Years
      ended December 31 |       
|------------------------------------------------------------------------------------------------------------ | ----------------------------- | ------
|(millions
      of Canadian dollars)                                                                         | 2004                          |       
|Expected
      income tax expense at Canadian statutory tax rate of 40.5% (2003 -
      40.6%; 2002 - 42.7%) | $                             | 55.5  
|Increase
      (decrease) in taxes resulting from:                                                           |                               |       
|Loss
      on reduction of interest in EVCP                                                                  |                               | 15.2  
|Provision
      for asset write-down                                                                         |                               | -     
|Mineral
      taxes                                                                                          |                               | 11.7  
|Resource
      allowance                                                                                     |                               | (14.8)
|Reduction
      in tax rate                                                                                  |                               | -     
|Trust
      distributions                                                                                    |                               | (79.3)
|Losses
      not tax affected                                                                                |                               | 0.9   
|Large
      corporation tax                                                                                  |                               | 2.7   
|Foreign
      tax rate differentials                                                                         |                               | (1.0) 
|Other                                                                                                        |                               | (3.9) 
|Income
      tax expense                                                                                     | $                             | (13.0)

The
temporary difference comprising the future income tax assets and liabilities are
as follows:

|                                                           | As
      at December 31 |      
|---------------------------------------------------------- | ----------------------- | -----
|(millions
      of Canadian dollars)                       | 2004                    |      
|Future
      income tax assets                             |                         |      
|Liabilities
      carrying value in excess of tax basis    | $                       | 6.4  
|Asset
      retirement obligations                         |                         | 25.0 
|Canadian
      tax loss carry forwards                     |                         | 35.1 
|Other                                                      |                         | 8.6  
|Future
      income tax assets                             |                         | 75.1 
|Future
      income tax liabilities                        |                         |      
|Capital
      assets carrying value in excess of tax basis |                         | 237.2
|Other                                                      |                         | 18.3 
|Future
      income tax liabilities                        |                         | 255.5
|Net
      long-term future income tax liability            | $                       | 180.4

84
| 2004
Annual Report

---

As
at December 31, 2004 Canadian income tax loss carry forwards total $226.8
million and expire in the years 2010 and 2011. For future income tax purposes,
these losses were off-set by $140.1 million of accrued taxable income
contributed by EVCP. The Corporation has recorded a future tax asset of $35.1
million to reflect the benefit of the remaining loss carry forwards on the basis
that they are more likely than not to be realized in future periods.

A
foreign subsidiary has income tax loss carry forwards of $47.2 million, which
expire in the years 2008 through 2010. No future tax asset has been recorded for
the loss carry forwards on the basis that they are not likely to be realized in
future periods.

|11 | COMMITMENTS
      AND CONTINGENCIES
|-- | -----------------------------------

F
o r e i g n   e x c h a n g e   f o r w a r d   c
o n t r a c t s

To
manage exposure to currency fluctuations, foreign exchange forward contracts are
used to fix the rate at which certain future anticipated flows of U.S. dollars
are exchanged into Canadian dollars. The following table summarizes the
Corporation's outstanding hedged positions at December 31, 2004.

|     |  | Amount
      Hedged(millions
      of U.S. dollars) |     |                    |  
|---- |  | --------------------------------------------------- | --- | ------------------ | -
|     |  | Elk
      Valley Coal                               |     | Fording
      Inc. |  
|Year |  | 100%                                                |     | 60%                |  
|2005 |  | $                                                   | 355 |                    | $
|2006 |  |                                                     | 95  |                    |  
|2007 |  |                                                     | -   |                    |  
|     |  | $                                                   | 450 |                    | $

At
December 31, 2004, the Trust's portion of unrealized gains on foreign exchange
forward contracts was $116.2 million (2003 - $124.1 million; 2002 - unrealized
loss of $111.3 million) based on the U.S. / Canadian dollar exchange rate of
U.S.$0.83. The Trust's portion of realized gains on foreign exchange included
in revenues in 2004 was $82.7 million (2003 - $41.4 million; 2002 - realized
loss of $83.5 million).

L
e a s e s

EVCP
leases various mining equipment, vehicles and rail cars at several of its
operations. The minimum lease payments are payable in both Canadian and U.S.
dollars and at December 31, 2004 the Trust's portion of these minimum payments
is as follows:

|(millions
      of dollars) | U.S.
      $ |     | CDN
      $ |   | Total
      CDN$ Equivalent | 
|--------------------------- | ------------ | --- | ----------- | - | --------------------------- | 
|2005                        | $            | 1.5 |             | $ | 10.0                        | 
|2006                        |              | 1.5 |             |   | 2.9                         | 
|2007                        |              | 1.5 |             |   | 0.7                         | 
|2008                        |              | 1.5 |             |   | 0.7                         | 
|2009
      and thereafter   |              | 1.7 |             |   | 0.3                         | 
|                            | $            | 7.7 |             | $ | 14.6                        | 

U.S.
dollar commitments have been translated to the Canadian dollar equivalent at the
year-end U.S. / Canadian dollar exchange rate of U.S.$0.83.

C
r e d i t   r i s k   m a n a g e m e n t

Export-coal
sales represent the principal component of EVCP's revenues. Coal is sold under
contract or in the spot market to approximately 60 customers worldwide, which
are primarily steel producers. Coal sales are contracted in U.S. dollars and
terms of payment vary from three to 60 days. To manage its credit risk, EVCP
obtains,

2004
Annual Report |85

---

to
the extent practical, either export trade credit insurance or confirmed
irrevocable letters of credit. Credit risk for wollastonite trade receivables is
limited by the large and diversified customer base.

The
Trust, directly and through its interest in EVCP, is exposed to credit losses in
the event of non-performance by counterparties to financial instruments.
However, the Trust and EVCP deal with counterparties of high credit quality to
mitigate risk of non-performance. In addition, the Trust does not believe that
there are any significant concentrations of credit risk.

F
a i r   v a l u e s

The
carrying amounts of short-term financial assets and liabilities as presented in
the balance sheet are reasonable estimates of fair values due to the relatively
short periods to maturity and the commercial terms of these instruments. The
carrying amount of long-term debt of $205.2 million at December 31, 2004 is
considered to be a reasonable estimate of fair value due to the floating
interest rate of the debt.

The
book value of unitholders' equity of $282.0 million at December 31, 2004 is
stated at historical amounts. The fair market value of the Trust's outstanding
units, or its market capitalization, was $4.5 billion based on the number of
units outstanding and the closing price of units traded on the Toronto Stock
Exchange on the same date.

S
e c u r i t i z a t i o n   o f   r e c e i v a b l e s

EVCP
has entered into an agreement, allowing it to sell on a non-recourse basis
certain of its U.S. dollar receivables for 100% of the invoiced amount less the
applicable market financing rate as applied to the period from the date of
discount to the date of maturity of the receivable. In selling a receivable,
EVCP assigns ownership of the receivable and its interest in any applicable
trade credit insurance coverage. Deductibles under the insurance policy are the
responsibility of EVCP. The cost of the discounting is recorded as other
expense. The Trust's share of receivables sold in 2004 amounted to U.S.$189.1
million (2003 - U.S.$264.3 million). The Trust's portion of accounts
receivable sold and outstanding under this agreement as at December 31, 2004
amounted to U.S.$13.9 million (2003 - U.S.$24.4 million).

E
l k v i e w   P a r t n e r s h i p

A
letter of intent has been entered into between EVCP, Nippon Steel Corporation (NSC)
and POSCO which contemplates that NSC and POSCO will each acquire a 2.5% equity
interest in the Elkview mine for proceeds of U.S.$25 million. Closing of the
transaction is subject to board approvals, due diligence, the negotiation and
settlement of binding agreements and other customary conditions.

W
e s t b o u n d   r a i l   r a t e s

Rail
service to the five mines located in the Elk Valley is provided by the Canadian
Pacific Railway Company (CPR). Service to the Fording River, Greenhills and Coal
Mountain mines is provided pursuant to an agreement expiring March 31, 2007. The
agreement provides for rail rates to be adjusted annually based on the rail
rates paid by the Elkview and Line Creek mines. The agreements for rail service
to the Elkview and Line Creek mines expired March 31, 2004 and Elk Valley Coal
and CPR disagree on the manner in which freight rates for coal shipped to west
coast ports from the five mines is to be determined. Legal proceedings in
relation to the dispute have been initiated by CPR in both the Alberta Courts
and before the Canadian Transportation Agency. In January 2005, Elk Valley Coal
and CPR agreed to engage in a confidential non-binding mediation process to
attempt to resolve the dispute; discussions are ongoing at the time of this
report.

As
at December 31, 2004, a reasonable provision for rail rates has been accrued.

CPR
has stated that the dispute is not expected to adversely affect the shipment of
coal from the Elk Valley mines. Regardless of the outcome of the dispute, future
rail rates charged to Elk Valley Coal are expected to increase in 2005 as
compared to 2004.

C
a r d i n a l   R i v e r   o p e r a t i o n s

All
licenses and approvals have been received for the Cheviot Creek pit and the
haulroad at the Cardinal River operations. A number of environmental
organizations have applied to the Federal Court seeking a further

86
| 2004
Annual Report

---

environmental
assessment of the project and challenging certain federal authorizations that
the project has received. The Federal Court is expected to hear the applications
in June 2005. In addition, an individual appealed certain approvals issued by
Alberta Environment in connection with the project. The Environmental Appeal
Board heard the appeal in mid-January and the parties are awaiting a decision.

While
unanticipated, negative decisions related to these legal issues could impact
future operations at the site, EVCP continues to monitor progress on these legal
issues, and does not expect that outcomes from these proceedings represent a
material risk to the ongoing mining of the Cheviot Creek pit.

C
h a n g e   o f   c o n t r o l   a g r e e m e n
t s

Old
Fording entered into Change of Control Agreements (agreements) with certain
members of its senior management in connection with becoming a public company in
2001. Seven of the agreements were assumed by EVCP under the Arrangement. The
Arrangement also constituted a change in control for the purposes of the
agreements. If an executive who is a party to an agreement resigns or is
terminated without cause prior to March 1, 2006, such executive will be entitled
to the severance benefits provided for by the agreement. The severance benefits
generally provide for two years salary, benefits and bonuses except that the
former President and Chief Executive Officer of Old Fording is entitled to three
years salary, benefits and bonuses.

As
of December 31, 2004, four executives had exercised their agreements including
the former President and Chief Executive Officer of Old Fording. Of the three
remaining agreements, one has been extended to permit the executive to be
entitled to the severance benefits if the executive resigns or is terminated
without cause prior to March 1, 2009. No provision has been accrued for the
contingent liability related to the agreements that were outstanding on December
31, 2004. The liability is charged to earnings in the period in which the
resignation, retirement or termination occurs. The Trust's share of the
contingent liability, which is dependent on the achievement of certain future
financial results, ranges between $5.0 million to $7.0 million. Compensation
expense related to these agreements of $6.9 million (2003 - $2.9 million) was
recorded in selling, general and administration expenses during 2004.

N
e p t u n e   T e r m i n a l s   g u a r a n t e e / a s s
e t   r e t i r e m e n t   o b l i g a t i o n s

By
virtue of its ownership in Neptune Terminals EVCP is required to guarantee its
share of bank indebtedness of the terminal. The Trust's proportionate share of
the guarantee was $10.3 million. The Trust's share of Neptune Terminal's
asset retirement obligation was $6.9 million at December 31, 2004.

O
t h e r

During
the normal course of business activity, the Trust is occasionally involved in
litigation proceedings. Management considers the aggregate liability, if any, to
the Trust in respect of these actions and proceedings not to be material.

|12 | UNITHOLDERS'
      EQUITY
|-- | -------------------------

A
u t h o r i z e d

The
Trust has an unlimited number of units authorized for issuance pursuant to the
Declaration of Trust. The units represent a beneficial interest in the Trust.
All units share equally in all distributions from the Trust and carry equal
voting rights.

No
conversion, retraction or pre-emptive rights are attached to the units. Trust
units are redeemable at the option of the unitholder at a price that is the
lesser of 90% of the average closing price of the units on the principal trading
market for the previous 10 trading days and the closing market price on the date
of tender for redemption, subject to restrictions on the amount to be redeemed
each quarter.

2004
Annual Report |87

---

T
r u s t   u n i t s

|(millions
      of units and Canadian dollars)      | Units |  | Shares |  | Amount |       
|--------------------------------------------------- | ----- |  | ------ |  | ------ | ------
|Balance
      at December 31, 2002                  | -     |  | 50.7   |  | $      | 122.4 
|Shares
      issued under stock option plans        | -     |  | 0.1    |  |        | 0.5   
|Shares
      repurchased as part of the Arrangement | -     |  | (10.7) |  |        | (26.0)
|Small
      non-board lot shares repurchased        | -     |  | (0.1)  |  |        | (0.1) 
|Units
      exchanged for shares of the Corporation | 40.0  |  | (40.0) |  |        | -     
|Units
      issued for Luscar/Consol assets         | 6.4   |  | -      |  |        | 224.0 
|Units
      issued on exercise of options           | 0.5   |  | -      |  |        | 11.8  
|Payments
      arising under the Arrangement        | -     |  | -      |  |        | (75.3)
|Balance
      at December 31, 2003                  | 46.9  |  | -      |  |        | 257.3 
|Units
      issued on exercise of options           | 0.1   |  | -      |  |        | 0.8   
|Units
      issued pursuant to units offering       | 2.0   |  | -      |  |        | 99.0  
|Other                                               | -     |  | -      |  |        | 0.6   
|Balance
      at December 31, 2004                  | 49.0  |  | -      |  | $      | 357.7 

In
April 2004, the Trust issued 2.0 million units from treasury at $52.50 per unit.
The units offering provided net proceeds of $99.0 million, which was used to
repay a portion of long-term bank debt.

The
following transactions occurred as a result of the Arrangement in 2003:

- Repurchase
    and cancellation of 10.7 million Old Fording shares at $35.00 per share for
    a total consideration of $375.0 million. Capital stock was charged $26.0
    million for the average carrying value for the shares redeemed and the
    remaining $349.0 million was charged to retained earnings.
- Repurchase
    and cancellation of 0.1 million Old Fording small non-board lot shares at
    $33.33 per share for a total consideration of $2.1 million. Capital stock
    was charged $0.1 million for the average carrying value and retained
    earnings were charged with the remaining $2.0 million.
- Exchange
    of 40.0 million shares of Old Fording for an equivalent number of units of
    the Trust.
- Issuance
    of 6.4 million units at $35.00 per unit in partial consideration for the
    metallurgical coal assets from the Luscar/CONSOL joint ventures.
- Payments
    in aggregate, of $75.3 million were made to Sherritt, OTPP, Teck Cominco,
    Westshore Terminals and CONSOL under the Arrangement.

A
c c u m u l a t e d   c a s h   d i s t r i b u t i o n s

|(millions
      of Canadian dollars)                                    | Year
      ended December 31 2004 |       | Ten
      months ended December 31 20031 |  
|----------------------------------------------------------------------- | --------------------------------- | ----- | ---------------------------------------- | -
|Opening
      accumulated cash distributions                            | $                                 | 210.3 |                                          | $
|Distributions
      declared and payable                                |                                   | 213.5 |                                          |  
|Closing
      accumulated cash distributions                            | $                                 | 423.8 |                                          | $
|1 The
      period from the formation of the Trust to December 31, 2003 |                                   |       |                                          |  

Accumulated
cash distributions exceed accumulated earnings of the Trust. Further, payments
to unitholders' from cash available for distribution have exceeded net income.
If this situation remains unchanged, unitholders equity will continue to decline
from present levels. In addition, the Arrangement that occurred in 2003 resulted
in the assets and liabilities of the Trust being recorded at the historical net
book values recorded by Old Fording. At

88
| 2004
Annual Report

---

the
time of the Arrangement, the market capitalization of the Trust was $1.4 billion
and its net book value was $300.0 million. If the assets had been revalued at
that time, the relative impact of cash distributions on unitholders' equity
would not be as significant.

F
o r e i g n   c u r r e n c y   t r a n s l a t i o
n   a d j u s t m e n t s

|                                                                           | As
      at December 31 |      
|-------------------------------------------------------------------------- | ----------------------- | -----
|(millions
      of Canadian dollars)                                       | 2004                    |      
|Balance
      - beginning of year                                          | $                       | 13.4 
|Change
      in foreign currency translation rates on foreign subsidiaries |                         | (5.9)
|Balance
      - end of year                                                | $                       | 7.5  

E
a r n i n g s   p e r   u n i t

In
calculating diluted earnings per unit, net income remains unchanged from the
basic earnings per unit calculation and the number of units outstanding is
increased for the dilutive effect of outstanding unit options. The treasury
stock method is used to determine the dilutive effect of unit options and other
dilutive instruments. The weighted average number of units outstanding in 2004
for purposes of calculating earnings per unit on a basic and fully diluted basis
was 48.5 million units (2003 - 47.4 million; 2002 - 51.4 million).

Earnings
per unit are calculated based upon a continuity of interest from Old Fording to
the Trust. The effect of this is to treat shares and units interchangeably.

For
the year ended December 31, 2002, the dilutive effect of 0.2 million stock
options was excluded from the diluted earnings per shares calculations on the
basis that they would have been anti-dilutive to the loss per share.

|13 | UNIT-BASED
      COMPENSATION
|-- | -----------------------------

The
Trust has three unit-based compensation arrangements, including an exchange
option plan, an employee unit purchase plan and a unit equivalent plan for
Trustees and Directors. Certain exchange options also have accompanying unit
appreciation rights. These plans resulted in compensation expense of $2.3
million in 2004 (2003 - $0.9 million; 2002 - $3.4 million).

E
x c h a n g e   O p t i o n   P l a n

Under
the Arrangement, all options to purchase common shares of Old Fording were
exchanged for options to purchase units of the Trust under the exchange option
plan. The Trust has not granted any options since its formation.

|                                  | Unit
      Options |  | Stock
      Options                   |       | Directors
      Options |          
|--------------------------------- | ------------------ |  | ------------------------------------- | ----- | ----------------------- | ---------
|                                  | Number             |  | Weighted
      Average Exercise Price |       | Number                  |          
|Options
      - Jan. 1, 2003      | -                  |  | $                                     | -     |                         | 695,188  
|Exchanged
      for unit options  | 713,210            |  |                                       | 18.35 |                         | (633,210)
|Exercised                         | (624,498)          |  |                                       | 18.93 |                         | (41,769) 
|Cancelled
      or expired        | (3,394)            |  |                                       | 6.78  |                         | (20,209) 
|Outstanding
      - Dec. 31, 2003 | 85,318             |  |                                       | 14.56 |                         | -        
|Exercised                         | (34,386)           |  |                                       | 16.19 |                         | -        
|Cancelled
      or expired        | (2,985)            |  |                                       | 7.84  |                         | -        
|Outstanding
      - Dec. 31, 2004 | 47,947             |  | $                                     | 13.81 |                         | -        

2004
Annual Report |89

---

At
December 31, 2004, the details of options outstanding, all of which are
exercisable, were as follows:

|Range
      of Exercise Prices |               | Number
      Outstanding and Exercisable |        | Weighted
      Average Remaining Contractual Life |     | Weighted
      Average Exercise Price |  
|------------------------------ | ------------- | ---------------------------------------- | ------ | ------------------------------------------------- | --- | ------------------------------------- | -
|$                              | 7
      - 10  |                                          | 22,972 |                                                   | 4.0 |                                       | $
|                               | 11
      - 13 |                                          | 14,405 |                                                   | 2.9 |                                       |  
|                               | 18
      - 28 |                                          | 10,570 |                                                   | 7.3 |                                       |  
|$                              | 7
      - 28  |                                          | 47,947 |                                                   | 4.4 |                                       | $

E
m p l o y e e   U n i t   P u r c h a s e   P l a
n

An
employee unit purchase plan is in place whereby contributions by employees of
the Corporation and EVCP are used to purchase units of the Trust on the open
market for the employee. The cost of the plan is included in the compensation
expense, and is recognized over a one-year vesting period.

The
plan allows all employees to contribute up to 6% of their base earnings while
the employer contributes $1 for every $3 contributed by the employee.

The
total number of units purchased on behalf of the employees, including the
employer's contributions, was 32,619 units (2003 - 62,910 units; 2002 -
134,693 units) with the Trust's portion costing $0.3 million (2003 - $0.3
million; 2002 - $1.3 million).

U
n i t   E q u i v a l e n t   P l a n

A
unit equivalent plan is in place for Trustees and Directors. Trustees and
Directors receive a portion of their compensation in unit equivalents. The unit
equivalents are granted at fair market value, which is determined using the
five-day weighted average trading price of a unit immediately preceding the
award date and vest over a one-year period. There were 7,856 units awarded
during the year (2003 - 20,790 units). The total charge to income for the year
was $2.0 million (2003 - $0.6 million) and included the cost of vested unit
equivalents and any changes in the fair value of the units during the year.

|14 | OTHER,
      NET
|-- | ----------------



|                                                  | Years
      ended December 31 |     
|------------------------------------------------- | ----------------------------- | ----
|(millions
      of Canadian dollars)              | 2004                          |     
|Interest
      and investment income              | $                             | 3.1 
|Change
      in inventory valuation(note
      3) |                               | 10.8
|Provision
      for asset write-down              |                               | -   
|Other                                             |                               | 3.1 
|                                                  | $                             | 17.0

P
r o v i s i o n   f o r   a s s e t   w r i t e -
d o w n

In
2002, Old Fording assessed the recoverability of its investment in the NYCO
operations in Mexico following a history of operating losses and uncertainty
around future improvement. The projected undiscounted future net cash flows of
these assets were less than the carrying value. Accordingly, a provision for
asset impairment of $140.0 million was recorded. Estimates of undiscounted
future net cash flows are subject to significant uncertainties and assumptions,
therefore actual results could vary significantly from such estimates. The
excess of tax basis over net book value created by the write-down was not
recognized. The only tax effect recognized on the write-down was the reversal of
a $2.8 million future tax liability associated with related assets recorded in
Canada. The write-down has been reflected in the asset balance of the NYCO
segment in note 18.

90
| 2004
Annual Report

---

|15 | GAIN
      (LOSS) ON CORPORATE REORGANIZATION
|-- | ---------------------------------------------



|                                                                          | Years
      ended December 31 |       
|------------------------------------------------------------------------- | ----------------------------- | ------
|(millions
      of Canadian dollars)                                      | 2004                          |       
|Corporate
      reorganization                                            |                               |       
|Reduction
      of interest in EVCP                                       | $                             | (37.5)
|Gain
      on sale of interest in EVCP                                    |                               | -     
|Reorganization
      costs related to the Arrangement                     |                               | -     
|                                                                          | $                             | (37.5)
|Discontinued
      operations                                             |                               |       
|Gain
      on sale of assets, net of taxes (2003 - $56.3)                 | $                             | -     
|Earnings
      prior to disposal, net of taxes (2003 - $1.4; 2002 - $6.0) |                               | -     
|                                                                          | $                             | -     

R
e d u c t i o n   o f   i n t e r e s t   i
n   E V C P

EVCP
was initially owned 65% by the Trust and 35% by Teck Cominco, the Managing
Partner. The agreement governing EVCP provided for an increase in Teck Cominco's
interest to a maximum of 40% to the extent that synergies from the combination
of various metallurgical coal assets contributed to EVCP exceed certain target
levels. The June 2004 report of an independent expert engaged by the partners
concluded that sufficient synergies had been realized to increase Teck Cominco's
interest to 40%.

The
Trust and Teck Cominco agreed that substantial synergies were achieved. As a
result, the partners agreed that the Trust's distribution entitlement was
reduced to 62% effective April 1, 2004, and will be reduced to 61% on April 1,
2005, and 60% on April 1, 2006, as the benefits of synergies flow through to
unitholders. Teck Cominco's entitlements will increase correspondingly over
the same period.

A
net $37.5 million non-cash charge to earnings was recorded in the second quarter
of 2004 to account for the entire 5% reduction of the Trust's interest in EVCP.
This charge was reduced by an estimate of cash to be received for the additional
distribution entitlements of 2% for the year ended March 31, 2005 and 1% for the
year ended March 31, 2006. These additional distribution entitlements will be
included in cash available for distribution over the next two years.

Results
of operations commencing with the second quarter of 2004 reflect the Trust's
60% interest in EVCP, while results from February 28, 2003 to March 31, 2004
include the 65% interest.

G
a i n   o n   s a l e   o f   i n t e r
e s t   i n   E V C P

During
2003, the Corporation contributed its metallurgical coal assets, which included
Old Fording's interests in its three mines and the metallurgical coal assets
purchased from the Luscar/CONSOL joint ventures, and the liabilities and
obligations related to these assets, in exchange for a 65% interest in EVCP and
$125.0 million as part of the Arrangement. This transaction resulted in a $70.7
million gain to the Trust.

The
Trust incurred costs of $22.0 million in 2003 and $11.5 million in 2002 related
to the Arrangement.

D
i s c o n t i n u e d   o p e r a t i o n s

During
2003, the Prairie assets of Old Fording were sold for cash consideration of
$225.0 million plus an amount on account of working capital and the grant of a
royalty on future expansion of production from certain of the assets beyond
current levels of up to 5% of gross revenue from such expansion. This sale
resulted in a $132.3 million gain, before taxes of $56.3 million. These assets
have been classified as discontinued operations.

The
income net of taxes from these operations for 2003 prior to the sale was $2.7
million and $18.9 million in 2002.

2004
Annual Report |91

---

During
2002 the Corporation expensed $8.2 million of capitalized costs relating to a
proposed power project. Due to the state of economic and environmental
uncertainties in the power industry the future recovery of the project costs was
uncertain. This project is part of discontinued operations in 2002.

|16 | SUPPLEMENTAL
      INFORMATION
|-- | ------------------------------

C
h a n g e s   i n   n o n - c a s h   w o r k i n
g   c a p i t a l

|                                                   | Years
      ended December 31 |      
|-------------------------------------------------- | ----------------------------- | -----
|(millions
      of Canadian dollars)               | 2004                          |      
|Decrease
      (increase) in current assets        |                               |      
|Accounts
      receivable                          | $                             | (6.2)
|Inventory                                          |                               | 18.6 
|Prepaid
      expenses                             |                               | (0.9)
|                                                   |                               |      
|Increase
      (decrease) in current liabilities   |                               |      
|Accounts
      payable, excluding capital accruals |                               | 47.2 
|Other                                              |                               | 5.5  
|                                                   | $                             | 64.2 

F
i n a n c i n g   a c t i v i t i e s   r e l a t e
d   to  
d i s t r i b u t i o n s   a n d   d i v i d e n d s

|                                        | Years
      ended December 31 |        
|--------------------------------------- | ----------------------------- | -------
|(millions
      of Canadian dollars)    | 2004                          |        
|Distributions
      declared            | $                             | (213.5)
|Dividends
      declared                |                               | -      
|Increase
      in distributions payable |                               | 16.8   
|Distributions
      or dividends paid   | $                             | (196.7)

I
n t e r e s t   i n   j o i n t   v e n t u r e s

A
portion of the Corporation's mining activities are conducted through its
interests in joint ventures. As disclosed in note 2, these are accounted for on
a proportionate consolidation basis. The financial statements include the
Corporation's proportionate share of joint venture activities as follows but
do not include results from discontinued operations that were conducted through
joint ventures.

|                                               | Years
      ended December 31 |        
|---------------------------------------------- | ----------------------------- | -------
|(millions
      of Canadian dollars)           | 2004                          |        
|Revenues                                       | $                             | 1,089.7
|Operating
      and other expenses             |                               | 930.2  
|Net
      income                               | $                             | 159.5  
|                                               |                               |        
|Current
      assets                           | $                             | 224.1  
|Long-term
      assets                         |                               | 559.3  
|Current
      liabilities                      |                               | 127.2  
|Long-term
      obligations                    |                               | 93.1   
|                                               |                               |        
|Cash
      from operating activities           |                               | 263.0  
|Cash
      used in (from) financing activities |                               | (60.6) 
|Cash
      used in investing activities        |                               | (161.1)

92
| 2004
Annual Report

---

C
a s h   t r a n s a c t i o n s

The
following amounts are actual cash outlays made during the respective periods and
will not agree with amounts reported on the financial statements due to
accruals.

|                                     | Years
      ended December 31 |     
|------------------------------------ | ----------------------------- | ----
|(millions
      of Canadian dollars) | 2004                          |     
|Income
      taxes paid              | $                             | 21.1
|Interest
      paid                  | $                             | 13.3



|17 | RELATED
      PARTY TRANSACTIONS
|-- | --------------------------------

Subsequent
to the Arrangement, EVCP entered into an agreement with its Managing Partner for
the provision of certain management services in the ordinary course of business.
EVCP also sells coal to the Managing Partner at market prices. The Trust's
share of related party revenues for 2004 were $3.1 million (2003 - $1.8
million). Cost of sales included $0.7 million (2003 - $0.8 million) and
selling, general and administrative expense included $0.3 million (2003 - $0.1
million). Also, EVCP accepted the transfer of the Quintette mine assets and
purchased certain other assets of the Managing Partner related to the Quintette
mine on December 31, 2004. The purchased assets were aquired at fair market
value, and the Trust's share of the cost was $1.3 million. The transfer of
Quintette mine assets, including the real property, coal leases, permits and
licenses was provided for in the Arrangement and was to occur when the Managing
Partner had completed the reclamation of the mine site. EVCP agreed to an
earlier transfer of the Quintette mine assets before reclamation was completed
in return for an agreement by the Managing Partner to complete the reclamation
and provide EVCP with an indemnity against any liability arising from the early
transfer. Related party receivables and payables with the Managing Partner were
$0.4 million and $0.2 million respectively at December 31, 2004.

EVCP
makes shipments of coal through Neptune Terminals in the normal course of
operations, on a cost of service basis. The Trust's share of these costs are
included in transportation and other costs and totalled $8.7 million during 2004
(2003 - $8.3 million). Related party receivables and payables related to this
entity were $0.2 million and $2.0 million respectively at December 31, 2004.

2004
Annual Report |93

---

|18 | SEGMENT
      INFORMATION
|-- | -------------------------



|                                     | Elk
      Valley Coal |         | NYCO |   | Corporate |  | Total |        
|------------------------------------ | --------------------- | ------- | ---- | - | --------- |  | ----- | -------
|(millions
      of Canadian dollars) | 2004                  |         | 2003 |   | 2002      |  | 2004  |        
|Earnings                             |                       |         |      |   |           |  |       |        
|Revenues                             |                       |         |      |   |           |  |       |        
|Canada
      domestic                | $                     | 42.0    |      | $ | 37.3      |  | $     | 40.5   
|Canada
      export                  |                       | 1,076.4 |      |   | 958.3     |  |       | 773.3  
|Foreign                              |                       | -       |      |   | -         |  |       | -      
|                                     |                       | 1,118.4 |      |   | 995.6     |  |       | 813.8  
|Cost
      of product sold           |                       | (428.2) |      |   | (422.0)   |  |       | (310.7)