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Exhibit A

2002 Annual Information Form





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TABLE OF CONTENTS

|                                                                                      |  |  |     | 
|------------------------------------------------------------------------------------- |  |  | --- | 
|INFORMATION ABOUT THE ANNUAL INFORMATION FORM                                         |  |  | 1   | 
|GLOSSARY OF TECHNICAL TERMS                                                           |  |  | 2   | 
|GENERAL GLOSSARY                                                                      |  |  | 5   | 
|CORPORATE STRUCTURE                                                                   |  |  | 10  | 
|GENERAL DEVELOPMENT OF THE BUSINESS                                                   |  |  | 10  | 
|DESCRIPTION OF THE BUSINESS AS CONSTITUTED ON DECEMBER 31, 2002                       |  |  | 12  | 
|OTHER INFORMATION REGARDING FORDING                                                   |  |  | 19  | 
|RISKS AND OTHER TRENDS                                                                |  |  | 28  | 
|SUBSEQUENT EVENTS  THE ARRANGEMENT                                                   |  |  | 30  | 
|SELECTED CONSOLIDATED FINANCIAL INFORMATION                                           |  |  | 50  | 
|DISTRIBUTION POLICIES                                                                 |  |  | 50  | 
|MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS |  |  | 51  | 
|MARKETS FOR SECURITIES                                                                |  |  | 51  | 
|BIOGRAPHIES OF TRUSTEES, DIRECTORS AND OFFICERS                                       |  |  | 51  | 
|ADDITIONAL INFORMATION                                                                |  |  | 56  | 
|APPENDIX A DEFINITIONS FOR RESERVES AND RESOURCES                                     |  |  | A-1 | 
|APPENDIX B GENERAL DESCRIPTION OF DECLARATION OF TRUST                                |  |  | B-1 | 





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INFORMATION ABOUT THE ANNUAL INFORMATION FORM

Information Regarding Old Fording and the Trust

On February 28, 2003 Fording Inc., as it was then constituted (Old Fording),
Teck Cominco Limited (Teck), Westshore Terminals Income Fund (Westshore),
Sherritt Coal Partnership II (SCPII), the two partners of which are
wholly-owned subsidiaries of each of Ontario Teachers Pension Plan Board
(OTPP) and Sherritt International Corporation (Sherritt), and CONSOL of
Canada Inc. (CONSOL), completed a multistep transaction which proceeded by
way of a plan of arrangement (the Arrangement).

Pursuant to the Arrangement, the business of Old Fording was reorganized under
an income trust called the Fording Canadian Coal Trust (the Trust) and the
Fording Coal Partnership, which subsequently changed its name to Elk Valley
Coal Partnership (the Partnership), was created. The Partnership is a
general partnership, the partners of which are a subsidiary of the Trust (as to
65%), and Teck and its affiliates (as to 35%). 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 Partnership their
respective interests in the Line Creek mine, the Luscar mine and the
undeveloped Cheviot deposit as well as their collective 46.4% interest in
Neptune Bulk Terminals (Canada) Ltd. Old Fording contributed to the Partnership
its metallurgical coal business comprised substantially of the Fording River
mine, the Coal Mountain mine and its interest in the Greenhills mine, and Teck
contributed to the Partnership its North American metallurgical coal business
comprised substantially of the Elkview mine.

In addition, and as part of the transaction, Old Fording sold its thermal coal
business to SCPII, and each of Teck, Westshore, Sherritt and OTPP subscribed
for units of the Trust.

Under the Arrangement, shareholders of Old Fording could elect to receive cash,
units of the Trust (Units) or a combination of cash and Units in exchange for
their common shares of Old Fording. The Trust is the successor issuer to Old
Fording following the completion of the Arrangement. The Trust expressly
adopts as its own the Annual Information Form of Old Fording dated May 16,
2002. This Renewal Annual Information Form is being distributed by the Trust
to Unitholders in its capacity as successor issuer to Old Fording.

The disclosure provided in this annual information form describes the business
of both Old Fording as at December 31, 2002 (in accordance with applicable
Canadian securities laws) as well as the Arrangement and the business of the
Trust resulting from the completion of such transaction. Specifically, the
disclosure provided under the headings Corporate Structure, General
Development of the Business, Description of the Business as Constituted on
December 31, 2002, Other Information Regarding Fording, Selected
Consolidated Financial Information and Managements Discussion and Analysis
of Financial Condition and Results of Operations relates, unless otherwise
indicated, to the business and operations of Old Fording as at December 31,
2002.

The disclosure provided under the heading Subsequent Events  The
Arrangement describes the Arrangement and its effect on the business and
operations of the Trust, New Fording and the Partnership and their respective
subsidiaries (collectively, the Fording Group). The disclosure provided
under the heading Risks and Other Trends relates to both Old Fording and the
Trust. The disclosure provided under the headings Distribution Policies and
Markets for Securities relates to the Trust as the successor issuer to Old
Fording. The disclosure provided under the heading Biographies of Trustees,
Directors and Officers relates to the Fording Group.

Each of Teck, OTPP and Sherritt have provided or have caused to be provided
information contained in this Annual Information Form and have represented the
accuracy of such information. Fording assumes no responsibility for the
accuracy or completeness of such information, nor for any omission on the part
of Teck OTPP, Sherritt or Luscar Ltd. to disclose facts or events which may affect the accuracy of
any such information.

Forward-Looking Information

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, the 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





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or performance. Unitholders and prospective investors should be aware that
these statements are subject to known and unknown risks, uncertainties and
other factors that could cause actual results to differ materially from those
suggested by the forward-looking statements.

Unitholders and prospective investors are cautioned not to place undue reliance
on forward-looking information. By its nature, forward-looking information
involves numerous assumptions, inherent risks and uncertainties, both general
and specific, that contribute to the possibility that the predictions,
forecasts, projections and various future events will not occur. These factors
include, but are not limited to: changes in commodity prices; changes in steel
making methods and other technological changes; the strength of various
economies; changes in the manner in which use of the Fording Groups products
are regulated; the Trusts distribution entitlement in the Partnership; the
effectiveness of the managing partner of the Partnership in managing its
affairs; the effects of competition and pricing pressures; the oversupply of,
or lack of demand for, the Fording Groups products; currency and interest rate
fluctuations; various events which could disrupt operations, including labour
stoppages and severe weather conditions; and the Fording Groups ability to
anticipate and manage the foregoing factors and risks.

The list of factors set forth above is not exhaustive and the Trust undertakes
no obligation to update publicly or otherwise revise any forward-looking
information whether as a result of new information, future events or other
factors which affect this information, except as required by law.

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 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.

Conversion Table

The following are standard conversions for measurements that may be given in
Imperial measure or metric units:

|              |  |              |  |             |       | 
|------------- |  | ------------ |  | ----------- | ----- | 
|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 | 

Currency

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

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.

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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.

mine mouth operation means an operation whereby coal from a mine is directly
supplied to an adjacent power plant.

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 steel making 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 the
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.

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

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.

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tonnes of coal means, unless expressly stated otherwise, (i) in respect of
metallurgical coal, tonnes of clean coal (coal that has been processed in a
preparation plant); and (ii) in respect of thermal coal, tonnes of raw coal.

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 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.

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GENERAL GLOSSARY

Arrangement means the transaction involving Fording, Teck, Westshore,
Sherritt, OTPP and CONSOL, and certain of their affiliates, that was first
announced on January 13, 2003 and that proceeded by way of a plan of
arrangement under the CBCA pursuant to which, among other things, the business
of Fording was reorganized under an income trust (being the Trust) and the
Partnership was formed. The Arrangement became effective on February 28, 2003.

CBCA means the Canada Business Corporations Act.

Combination Agreement means the combination agreement among Fording, Teck,
Westshore, OTPP and Sherritt dated January 12, 2003 pursuant to which the
parties agreed to consummate the Arrangement.

Common Shares means common shares in the capital of Old Fording.

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

Declaration of Trust means the declaration of trust dated February 26, 2003
by which the Trust was created. See Appendix B of this annual information form
for a general description of certain of the terms of the Declaration of Trust.

Distribution Entitlement means a Partners proportional entitlement,
expressed as a percentage, 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.

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

Fording means Old Fording in respect of the period of time preceding the
effective time of the Arrangement, and the Trust in respect of the period
commencing at the time the Arrangement became effective, unless the context
otherwise requires.

Fording Contributed Assets means the businesses that Fording contributed to
the Partnership pursuant to the Arrangement, comprised substantially of its
Mountain Operations and the Luscar Contributed Assets, but excluding the
Fording Excluded Assets.

Fording Excluded Assets means the Industrial Minerals Operations, the Fording
Royalty, indebtedness under Old Fordings bank credit facilities (other than
its foreign exchange forward contracts) and Old Fordings rights and
obligations in connection with its interests in the Esquimault and Nanaimo
railway lands, including a former mining operation located at Mount Washington
on Vancouver Island.

Fording Group means the Trust, New Fording and its subsidiaries, and the
Partnership and its subsidiaries, and where the context requires, their
predecessors.

Fording Royalty means a right, retained by New Fording in connection with the
sale of the Prairie Operations, in respect of the lands forming part of the
Prairie Operations to receive a royalty (to be determined by good faith
negotiations or, failing that, arbitration) in respect of (i) a property on
which production has not commenced at or prior to February 28, 2003 (and that
as of that date is not dedicated to any of the generating stations to which
coal is supplied from the Prairie Operations) where, after February 28, 2003,
either mining or other production is commenced on the property or it becomes
part of the properties designated for any power generating station or other
project; (ii) a property producing a mineral other than coal at or prior to
February 28, 2003, on production in any year that exceeds the adjusted average
annual amount of that mineral produced from that property over the period
1998-2002; and (iii) a property producing coal at February 28, 2003, on all
coal production attributable to the net increase in the generating capacity of
the related power generating station, where that generating capacity increases
by more than 10% over and above the capacity as of February 28, 2003, excluding
for this purpose coal from the Genesee mine permit area (as at February 28,
2003) utilized in the planned 2005 expansion of the Genesee generating
facility. In each case the Fording Royalty in respect of any property is not
to exceed 5% of gross revenues.

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Independent Director means a director of New Fording 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) of New Fording.                                                                                                                                                                                                                                            

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.                                                                                                                                                                                                                                             

Industrial Minerals Operations means, collectively, those subsidiaries of
Fording engaged in the production of industrial minerals such as tripoli and
wollastonite, 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.

Information Circular means Old Fordings Notice of Special Meeting, Notice of
Petition and Information Circular dated November 20, 2002, as supplemented and
amended.

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 Contributed Assets means the assets of the Luscar/CONSOL Joint
Ventures purchased by New Fording pursuant to the Arrangement and contributed
to the Partnership. These assets consisted primarily of the Line Creek mine,
the undeveloped Cheviot project, the Luscar mine and a 46.4% interest in
Neptune.

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

Luscar Royalty means a royalty interest (retained by Luscar and CONSOL, each
as to a 50% share, in connection with the sale of the Luscar Contributed
Assets), of 5% of specified net revenues in respect of any coal mined and
produced at any time after February 28, 2003 from the Cheviot, Folding
Mountain, Cadomin East and Luscar North properties, as well as any other
reserves at the Luscar mine that are not part of the A-6 pit at the Luscar
mine.

Mountain Operations means the metallurgical mining operations undertaken at
the Fording River mine, the Coal Mountain mine and the Greenhills mine in
southeastern British Columbia.

National Instrument means National Instrument 43-101  Standards of
Disclosure for Mineral Projects.

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

Neptune Terminals means the terminals operated by Neptune located in Port of
Vancouvers inner harbour.

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

New Fording Common Shares means the common shares in the capital of
New Fording.

New Fording Preferred Shares means the preferred shares
in the capital of New Fording.

New Fording Subordinated Notes means
the unsecured, subordinated notes of New Fording.

Non-Resident means a person who is not a resident or deemed not to be a
resident of Canada for the purposes of the Income Tax Act(Canada).

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 of the Arrangement. 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 of the Arrangement. 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 Partnership following completion of the
Arrangement, being New Fording, Teck and Tecks affiliates, QCP and TBCI, and
Partner means any one of the Partners.

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.

Partnership Distributable Cashin respect of any period means without
duplication:



| | (a) |  | all cash received by the Partnership in the period from any source
including cash generated by coal sales, cash received from the disposition
of assets, decreases in non-cash working capital, proceeds from debt
incurred and proceeds from the contributions of Partners; plus                   
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | cash balances on hand at the beginning of the period; less                                                                                                                                                                                                                                          
|
| | (c) |  | all cash payments of any kind made in the period by the Partnership
including operating and administration expenses, increases in non-cash
working capital, capital expenditures (excluding those financed by capital
leases), capital lease expenses, interest expenses and repayment of debt;
less
|
| | (d) |  | allocations to a reserve for reasonably anticipated cash requirements
that are authorized by a resolution passed by Partners holding, in
aggregate, not less than 95% of the outstanding Distribution Entitlements,
either at a duly constituted meeting or in writing;                             

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provided that reasonable use will be made of the Partnerships operating lines
for working capital purposes.

Partnership Sustaining Capital Expenditures means expenditures in respect of
additions, replacements or improvements to property, plant and equipment
required to maintain the 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, 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.

SCAI means Sherritt Coal Acquisition Inc., a corporation existing under the
laws of Canada and a wholly-owned subsidiary of SCPII.

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

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.

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

Teck means Teck Cominco Limited, a corporation existing under the laws of
Canada. Teck is the managing partner of the Partnership.

Teck Contributed Assets means the assets that Teck contributed to the
Partnership as part the Arrangement comprising substantially all of Tecks
North American metallurgical coal business, including the Elkview mine.

Third Supplement means the supplement dated January 27, 2003 to the
Information Circular. The Third Supplement describes the terms of the Arrangement.

Trust means Fording Canadian Coal Trust, an open-ended mutual fund trust
governed by the laws of Alberta. The Trust was created in contemplation of the
Arrangement and is the successor issuer to Old Fording. The Trust is governed
by the terms of the Declaration of Trust.

Trust Distributable Cash means in respect of each calendar year,



| | (a) |  | the cash received by the Trust from New Fording;                                                                                                                                                                     
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any other net cash investment income from any other sources, including
from the disposition of Trust assets; and                                                                                                     
|
| | (c) |  | any net cash remaining from a prior period that has not previously
been distributed, less,                                                                                                                           
|
| | (d) |  | costs, expenses and other obligations of the Trust that in the opinion
of the Trustees are accrued and owing or otherwise have been or will be
incurred by the Trust, including any tax liabilities of the Trust; and
|
| | (e) |  | any amounts paid in cash by the Trust in connection with the
redemption of Units or other securities of the Trust.                                                                                                   

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Trustees means trustees of the Trust from time to time.

TSX means the
Toronto Stock Exchange.

TSX Guidelines means the corporate governance
guidelines of the TSX, as amended from time to time.

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.

9



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CORPORATE STRUCTURE

At December 31, 2002, Old Fording was a corporation existing under the CBCA and
its registered office and executive office was located at Suite 1000, 205-9th
Avenue SE, Calgary, Alberta T2G 0R4. Old Fordings business was principally
conducted through its wholly-owned subsidiary, Old FCL.

Intercorporate Relationships as at December 31, 2002

The following chart sets forth all material subsidiaries of Old Fording as at
December 31, 2002 and indicates their respective jurisdictions of incorporation
or continuance and the percentage of voting securities of each subsidiary
beneficially owned, or over which control or direction was exercised, by Old
Fording. See Subsequent Events The Arrangement for a description of the
intercorporate relationships following completion of the Arrangement.

(CORP. STRUCTURE)



---

|(1) |  | Fording Inc. (Old Fording) held 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

Three-year History

The nature and development of Fordings business during the three most recently
completed financial years is described in Mountain Operations  The Last
Three Years, Prairie Operations  The Last Three Years and Industrial
Minerals Operations  The Last Three Years.

Significant Acquisitions and Dispositions

Old Fording did not complete any significant acquisitions or dispositions
during the 2002 financial year. However, on January 12, 2003 Old Fording
entered into the Combination Agreement and on February 28, 2003 the
transactions contemplated by the Combination Agreement were completed and the
Arrangement became effective. Among other things, the Arrangement resulted in
the sale of the Prairie Operations to an affiliate of OTPP and Sherritt, and
the contribution of the Mountain Operations and the Luscar Contributed Assets
to the Partnership in exchange for, among other things, New Fordings 65%
interest in the Partnership. See Subsequent Events  The Arrangement.

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Trends and Major Changes

The Arrangement

A series of events took place beginning in the fall of 2002 which ultimately
resulted in the Arrangement and thereby had a material effect on Fordings
business.

On October 21, 2002 SCAI announced its intention to make an unsolicited offer
to acquire all of the outstanding Common Shares for $29.00 in cash per share
(the First Offer). On that same day, the board of directors of Old Fording
determined that Old Fording would proceed with the reorganization of its
business under an income trust and a press release was issued announcing this
development. On November 6, 2002 Old Fording issued a directors circular
recommending rejection of the First Offer. On November 20, 2002 Old Fording
released the Information Circular describing the income trust conversion
proposal.

On December 4, 2002 Old Fording, Teck and Westshore entered into a combination
agreement that contemplated the reorganization of Old Fordings business under
an income trust, the creation of a partnership, the contribution of assets to
the partnership by Old Fording and Teck, and the subscriptions of each of Teck
and Westshore for units of the proposed trust. This combination proposal was
described in a supplement to the Information Circular dated December 8, 2002.

On December 16, 2002 Sherritt and OTPP amended the First Offer to provide for
the payment of $35.00 in cash per Common Share (to a maximum of $850 million) or
the issuance of one exchange right per Common Share convertible into one unit
of a new Sherritt income trust that would own the metallurgical coal assets of
both Old Fording and the Luscar/CONSOL Joint Ventures (the Amended Offer).
On December 22, 2002 Old Fording issued a directors circular recommending
rejection of the Amended Offer.

On January 6, 2003 SCAI announced its intention to improve the Amended Offer
and on January 7, 2003 SCAI filed a notice of variation describing the amended
offer (the Second Amended Offer). Pursuant to the Second Amended Offer, Old
Fording shareholders had the choice of receiving, subject to pro-ration, $35.00
in cash per Common Share to an increased maximum of $965 million, or one
exchange right per Common Share convertible into one unit in the proposed
Sherritt income trust.

On January 8, 2003 representatives of Old Fording, Teck, Westshore, Sherritt
and OTPP commenced discussions which ultimately resulted, on January 12, 2003,
in the execution of the Combination Agreement.

Pursuant to the Arrangement, Old Fording shareholders had the option of
receiving Units on the basis of one Unit per Common Share, or $35.00 in cash
per Common Share to a maximum amount of $1.05 billion, or a combination of cash
and Units.

The Arrangement provided for the reorganization of Old Fordings business under
an income trust (being the Trust), the creation of the Partnership and the
contribution to the Partnership of the metallurgical coal businesses of Old
Fording, Teck and the Luscar/CONSOL Joint Ventures, the sale of the Prairie
Operations to an affiliate of Sherritt and OTPP, and the subscription for Units
by each of Teck, Westshore, OTPP and Sherritt.

The Arrangement was authorized by Fording shareholders at a special meeting
held on February 19, 2003 and the final order of the Court of Queens Bench of
Alberta was issued on February 20, 2003. The Arrangement became effective on
February 28, 2003.

Coal Markets

While price increases were achieved in all of Fordings metallurgical coal
markets for the 2001 and 2002 coal years, protracted negotiations for the 2002
coal year resulted in sales volumes which were 18% lower than in 2001. Pricing
for the 2003 coal year has decreased by approximately 3% over the previous year
while sales volumes are anticipated to increase over 2002 levels. Looking
forward, management believes that supply and demand for metallurgical coal will
remain in balance over the near term.

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Other than as described above, in Risks and Other Trends and in Fordings
other public disclosure documents, management is not aware of any other trends,
major changes, events or uncertainties that would have a material effect on
Fordings business, results of operation or financial condition.

DESCRIPTION OF THE BUSINESS AS CONSTITUTED ON DECEMBER 31, 2002

Background

In 2002, Old Fording, through its wholly owned subsidiaries, produced
metallurgical and thermal coal as well as wollastonite, tripoli and other
industrial minerals at locations throughout North America. Old Fording sold
metallurgical coal and industrial minerals to various customers throughout the
world. Substantially all of the thermal coal was produced under contract for
mine mouth power plants although a small amount of thermal coal was exported to
customers in Asia.

(MAP)

In 2002, Old Fording had three operating segments: the Mountain Operations; the
Prairie Operations; and the Industrial Minerals Operations. The Mountain
Operations mined and processed primarily metallurgical coal, principally for
export, from three mines, Fording River, Greenhills and Coal Mountain, all of
which are located in the Elk Valley region of southeastern British Columbia.
In 2002, the Mountain Operations accounted for approximately 87% of Old
Fordings operating revenue. The Prairie Operations primarily mined thermal
coal for mine mouth power plants from two mines at Genesee and Whitewood, both
of which are located in central Alberta. The Prairie Operations also collected
royalties from third party mining of its mineral properties at locations
throughout the Prairie provinces. In 2002, the Prairie Operations accounted
for approximately 8% of Old Fordings operating revenue. The Industrial
Minerals Operations mined and processed wollastonite and other industrial
minerals from two operations in the United States, NYCO Minerals, Inc.
(Willsboro) and American Tripoli, Inc. (Seneca), and one operation in
Mexico, Minera NYCO S.A. de C.V (Pilares). In 2002, the Industrial Minerals
Operations accounted for approximately 5% of Old Fordings operating revenue.
Pursuant to the Arrangement, the Mountain Operations were contributed to the
Partnership and the Prairie Operations were sold to an affiliate of OTPP and
Sherritt. The Trust continues to hold a 100% indirect interest in the
Industrial Minerals Operations.

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Mountain Operations

Overview

The Mountain Operations consist of open pit mines designed to operate 24 hours
per day, seven days per week. However, the operating schedule can be varied
depending on market conditions. The mines comprising the Mountain Operations
are serviced by two-lane all weather roads.

The Mountain Operations sold 12.3 million tonnes of coal in 2002, 15.0 million
tonnes in 2001 and 15.1 million tonnes in 2000. Sales from the Mountain
Operations accounted for approximately 87% of Old Fordings total operating
revenues in 2002, approximately 87% in 2001 and approximately 84% in 2000.

The following map shows the location of the three mines which comprised the
Mountain Operations as at December 31, 2002:

(MAP)

Principal Markets

The primary product of the Mountain Operations is metallurgical coal.
Metallurgical coal is used primarily for making steel in integrated steel
mills. Steel making is a global industry with integrated steel mills
throughout North America, South America, Europe, Africa and Asia.

Geological Setting and Mineralization

The coal and rock strata found in the Mountain Operations slope downward from
opposite directions to meet at a common point called a syncline. This syncline
structure is folded and faulted. The coal deposits of this region occur in the
Upper Jurassic to Lower Cretaceous periods. The deposits consist of medium to
high volatile bituminous coal that is primarily of metallurgical quality, with
minor amounts of thermal quality coal along the seam outcrops. Coal seams vary
in thicknesses up to 12 metres and are interbedded with sandstones, shales, and
siltstones.

The East Kootenay coal fields in the Elk Valley region of southeastern British
Columbia have supported coal mining for decades. The Mountain Operations have
extensive proven reserves capable of supporting continued operation for many
years  see Fording River, Greenhills and Coal Mountain; also see Other
Information Regarding Fording  Reserves and Resources.

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Mining and Processing

The Mountain Operations employ conventional open pit mining techniques using
truck and shovel and dragline methods. 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 plant. The coal preparation plants
employ rotary breakers, which break the coal to a predetermined size and remove
rock. The coal is then washed using a variety of techniques and conveyed to
coal fired dryers for drying.

Coal Transportation

Processed coal is conveyed to clean coal silos for storage and loadout to
railcars. The loadout facility is set up to load and weigh unit trains (each
train carrying up to 13,000 tonnes). A spray system coats the top of each
railcar with a dust inhibitor to minimize the escape of coal dust during
transportation. The majority of the processed coal is transported by rail to
the Westshore Terminal at Roberts Bank near Vancouver for shipment to
customers outside of North America. Deliveries to customers in North America
are made primarily by rail directly from the loadout facility.

Rail service at the Mountain Operations is provided by the Canadian Pacific
Railway pursuant to an evergreen agreement that requires three years advance
notice by either party to terminate. Prices are adjusted periodically under
certain conditions tied to competitive rail rates and coal prices.

Westshore Terminals Ltd. provides ship-loading services at Roberts Bank for
approximately 90% of Fordings metallurgical coal pursuant to a long-term
contract expiring on February 29, 2012. See Subsequent Events  The
Arrangement.

The Last Three Years

Between 1997 and 2000, the price of seaborne metallurgical coal dropped by more
than 30%. In order to reduce inventories, some metallurgical coal producers
elected to sell coal at significant discounts.

In 2000, metallurgical coal supply and demand returned to balance after many
years of oversupply and remained tight through 2001. Price increases were
achieved in all of Old Fordings metallurgical coal markets for the 2001 and
2002 coal years. However, protracted negotiations for the 2002 coal year
resulted in sales volumes which were 18% lower than in 2001. Pricing for the
2003 coal year has decreased by approximately 3% over the previous year while
sales volumes are anticipated to increase over 2002 levels. Looking forward,
management believes that supply and demand for metallurgical coal will remain
in balance over the near term.

Over the last three years, capital investments have averaged $37 million per
annum and have been primarily directed toward equipment replacement,
preparation plant and mine improvements and pit development. These investments
provided the Mountain Operations with technologically advanced facilities and
equipment which in turn assisted in lowering production costs.

Old Fordings Coal Sales By Geographical Area  Last Three Years

|              |  |                                                       |     |        |  |            |      |        |  |            |     |        |  |  |      |  |  |  |     |  |  |  |      | 
|------------- |  | ----------------------------------------------------- | --- | ------ |  | ---------- | ---- | ------ |  | ---------- | --- | ------ |  |  | ---- |  |  |  | --- |  |  |  | ---- | 
|              |  | Old Fording's Coal Sales By Area (millions of tonnes)
|              |  |                                                      
|              |  | 2002                                                  |     | 2001   |  | 2000      
|              |  |                                                       |     |        |  |           
|              |  | % of sales                                            |     | Tonnes |  | % of sales |      | Tonnes |  | % of sales |     | Tonnes
|              |  |                                                       |     |        |  |            |      |        |  |            |     |       
|Europe        |  |                                                       | 33  |        |  |            | 4.1  |        |  |            | 37  |        |  |  | 5.5  |  |  |  | 36  |  |  |  | 5.5  | 
|Japan         |  |                                                       | 28  |        |  |            | 3.4  |        |  |            | 27  |        |  |  | 4.1  |  |  |  | 32  |  |  |  | 4.8  | 
|Korea         |  |                                                       | 20  |        |  |            | 2.5  |        |  |            | 15  |        |  |  | 2.2  |  |  |  | 17  |  |  |  | 2.5  | 
|Taiwan        |  |                                                       | 4   |        |  |            | 0.5  |        |  |            | 5   |        |  |  | 0.8  |  |  |  | 7   |  |  |  | 1.1  | 
|South America |  |                                                       | 6   |        |  |            | 0.7  |        |  |            | 9   |        |  |  | 1.3  |  |  |  | 5   |  |  |  | 0.7  | 
|North America |  |                                                       | 9   |        |  |            | 1.1  |        |  |            | 7   |        |  |  | 1.1  |  |  |  | 3   |  |  |  | 0.5  | 
|              |  |                                                       |     |        |  |            |      |        |  |            |     |        |  |  |      |  |  |  |     |  |  |  |      | 
|Total         |  |                                                       | 100 |        |  |            | 12.3 |        |  |            | 100 |        |  |  | 15.0 |  |  |  | 100 |  |  |  | 15.1 | 
|              |  |                                                       |     |        |  |            |      |        |  |            |     |        |  |  |      |  |  |  |     |  |  |  |      | 

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Fording River

The Fording River operation is located 29 kilometres northeast of the community
of Elkford, in the southeastern part of British Columbia. The mine site is
comprised of 20,304 hectares of coal lands of which 3,592 hectares are
currently being mined or are scheduled for mining. See Other Information
Regarding Fording  Real Property. A predecessor to Fording commenced
construction of Fording River in 1969 as a 3 million tonne per year operation.
It has been operated continuously since that time.

Coal mined at Fording River is primarily metallurgical coal, although a very
small amount of thermal coal is also produced. The current annual production
capacity of the mine and preparation plant is 10 and 9.5 million tonnes,
respectively.

Coal production at Fording River has increased from approximately 2.2 million
tonnes in 1973, the first full year of production, to 8.1 million tonnes in
2002. The strip ratio in 2002 was 8.0 BCM per tonne and is projected to
decrease over the life of the mine.

The majority of current production is derived from the Eagle Mountain pit.
Known reserves at Fording River are projected to support mining at 2002
production rates for in excess of 25 years. Fording Rivers reserve areas
include Eagle Mountain, Greenhills, Turnbull, Henretta, and Castle Mountain.
See Other Information Regarding Fording Reserves and Resources.

Fording River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, all as verified by the Quality Management
Institute.

Greenhills

The Greenhills operation is located eight kilometres northeast of the community
of Elkford in the southeastern part of British Columbia. The mine site is
comprised of 10,092 hectares of coal lands of which approximately 2,669
hectares are currently being mined or are scheduled for mining. See Other
Information Regarding Fording  Real Property. Greenhills holds a forest
licence and manages a 7,610 hectare forest located outside the active mining
area.

The Greenhills operation was constructed in the early 1980s by a predecessor
of Westar Mining Limited (Westar). Fording purchased Greenhills from the
trustee in the bankruptcy of Westar in December 1992 and has operated the mine
continuously since 1993. Upon acquiring Greenhills, Old Fording followed a
program of capital investment to re-equip and upgrade the operation with
technologically advanced equipment and facilities.

In 2002, Greenhills was operated under a joint venture agreement (the
Greenhills Joint Venture Agreement) among Old FCL, Pohang Steel Canada
Limited (Poscan) and Poscans parent, Pohang Iron and Steel Company Limited
(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, and
pursuant to an amending and assignment agreement between Old FCL, Posco and
Poscan (the Amending Agreement), Old FCLs 80% interest was assigned to the
Partnership.

In 2002, Old FCL was the operator of the Greenhills joint venture. Following
completion of the Arrangement and pursuant to the Amending Agreement, the
Partnership assumed this role. The mine equipment and preparation plant are
owned by the Partnership and Posco in proportion to their respective joint
venture interests. The Partnership and Posco bear all costs and expenses
incurred in operating Greenhills 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 Greenhills from certain defined lands until
termination of the Greenhills Joint Venture Agreement, as amended by the
Amending Agreement.

Pursuant to the terms of the Greenhills Joint Venture Agreement, as amended by
the Amending Agreement, the Greenhills joint venture will be terminated on the
earlier of: (i) the date the reserves on the defined lands have been depleted;
(ii) March 31, 2004 if on or before December 31, 2003, Posco and the
Partnership have not entered into coal sales contracts on mutually satisfactory
terms providing for coal deliveries between April 1, 2004 and March

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31, 2013; or (iii) March 31, 2013 if on or before December 31, 2003, Posco and
the Partnership have entered into such new coal sales agreements.

Prior to the effective time of the Arrangement, Old FCL and Posco agreed to
extend the coal sales agreements to March 31, 2004, and negotiations for longer
term arrangements are continuing. If the Partnership decides to carry on
mining after the termination of the joint venture, it is required to negotiate
in good faith with Poscan regarding Poscans continued participation at
Greenhills, and if agreement cannot be reached, to acquire Poscans interest in
the mine equipment and preparation plant.

Coal mined at Greenhills is primarily metallurgical coal, although a small
amount of thermal coal is also produced. The current annual production capacity
of the mine and preparation plant is 4.5 and 5.5 million tonnes, respectively.
Coal production at Greenhills has increased from approximately 3.1 million
tonnes in 1994, the first full year of production following Old Fordings
purchase of Greenhills, to 3.8 million tonnes in 2002. The strip ratio in 2002
was 10.5 BCM per tonne and is expected to decrease over the life of the mine.

Production is derived from the Cougar reserve which is divided into two
distinct pits, Cougar North and Cougar South. Cougar North has been fully
developed and currently produces the bulk of the coal for the mine. Development
and pre-stripping of Cougar South are underway and are expected to provide a
long-term source of coal. Known reserves at Greenhills are projected to
support mining at 2002 production rates for in excess of 25 years. See Other
Information Regarding Fording  Reserves and Resources.

Greenhills quality management system is in compliance with the ISO 9001
quality standard, as verified by the Quality Management Institute.

Coal Mountain

The Coal Mountain operation is located 30 kilometres southeast of Sparwood in
the southeastern part of British Columbia. The mine site is comprised of 2,521
hectares of coal lands of which approximately 650 hectares are currently being
mined or are scheduled for mining. See Other Information
Regarding Fording 
Real Property.

Old Fording purchased the operation in 1994 from Corbin Creek Resources Ltd.
(Corbin) and it has been operated continuously since that time. Corbin
acquired the mine in the early 1990s from Esso Resources Canada Ltd. Upon
acquiring Coal Mountain, Old Fording implemented a program of capital
investment to re-equip and upgrade the operation with technologically advanced
equipment and facilities.

Coal Mountain produces both metallurgical and thermal coal. The current annual
production capacity of the mine and preparation plant is 2.5 and 3.2 million
tonnes, respectively.

Coal production has increased from approximately 1.1 million tonnes in 1995,
the first full year of production following Old Fordings purchase of Coal
Mountain, to 2.1 million tonnes in 2002. The strip ratio in 2002 was 5.7 BCM
per tonne and is anticipated to decrease over the life of the mine.

Known reserves at Coal Mountain are projected to support mining at 2002
production rates for in excess of 14 years. See Other Information Regarding
Fording  Reserves and Resources.

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

Prairie Operations

In 2002 Old Fordings thermal coal business was consolidated in the Prairie
Operations which consisted of two mine mouth operations (Genesee and Whitewood)
in central Alberta and third party mining activities at various locations
throughout Western Canada. Revenues from the Prairie Operations represented
approximately 8% of Old Fordings total operating revenues in 2002 as compared
to approximately 8% in 2001 and 10% in 2000.

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Description of the Operations

Coal produced at the Genesee mine is delivered to EPCOR Utilities Inc.s
(EPCOR) Genesee power plant. During 2002, Old Fording and EPCOR were parties
to a joint venture agreement regarding the operation of the Genesee mine.
Pursuant to such joint venture agreement, the mine and all mine equipment and
facilities were owned in equal shares by EPCOR and Old Fording. Old Fording
operated Genesee pursuant to an operating agreement with the joint venture
pursuant to which Old Fording received revenues through cost reimbursement, a
guaranteed rate of return on rate base, a management fee, incentive fees and
royalties. Annual production at Genesee was 3.6 million tonnes in 2002, 3.5
million tonnes in 2001 and 3.5 million tonnes in 2000.

Coal produced at the Whitewood mine is delivered to TransAlta Power L.P.s
(TransAlta) Wabamun power plant. In 2002, Old Fording operated the Whitewood
mine pursuant to a mining contract. Pursuant to such mining contract, the
mine, major mine equipment, coal properties and power plant were owned by
TransAlta, while Old Fording owned the support and service equipment. The
Whitewood mining contract was a cost reimbursement, management fee and
incentive fee based contract. Annual production at Whitewood was 2.8 million
tonnes in 2002, 2.1 million tonnes in 2001 and 2.0 million tonnes in 2000.

On October 1, 2002 TransAlta awarded to Old Fording a five-year mining contract
that covered both the Whitewood mine and the Highvale mine. The Highvale mine
is located approximately 80 kilometres west of Edmonton, Alberta and is the
largest coal mine in Canada with a production capacity of approximately 13
million tonnes per year. Coal produced at the Highvale mine is used by
TransAlta at its Sundance and Keephills power plants. The new
Whitewood/Highvale contract was on substantially the same terms and conditions
as the previous Whitewood contract described above.

In 2002, the Prairie Operations derived additional revenue from third party
mining of its extensive mineral holdings throughout Western Canada. In 2002,
revenue from third party royalty arrangements represented approximately 2% of
Old Fordings total operating revenue. A total of 2.7 million tonnes of potash
and 6.0 million tonnes of thermal coal were mined by third parties pursuant to
such arrangements in 2002.

As part of the Arrangement, the Prairie Operations were sold to an affiliate of
Sherritt and OTPP effective February 28, 2003 in consideration of $225 million,
an amount on account of working capital and the retention of the Fording
Royalty by New Fording.

Geological Setting and Mineralization

Genesee, Whitewood and Highvale operate in the sub-bituminous coal fields of
central Alberta. The deposits consist of the Ardley coal measures. The coal
seams are interbedded with partings of variable thicknesses and are flat lying
which makes for easier mining when compared to dipping seams. See Other
Information Regarding Fording  Reserves and Resources.

Mining

In 2002, the Prairie Operations employed an open pit mining method that
utilized draglines to strip the overburden from above the coal seam. The coal
was then loaded with shovels or loaders and hauled out of the pit in large
trucks.

The Last Three Years

The nature of the contractual arrangements with EPCOR and TransAlta, which at a
minimum allowed Old Fording to recover its costs of production plus a margin of
profit, resulted in a stable revenue stream from the Prairie Operations over
the last three years.

Industrial Minerals Operations

The Industrial Minerals Operations consist of mining operations producing
wollastonite and tripoli located in Willsboro, New York, Sonora, Mexico and
Seneca, Missouri. Revenues from the Industrial Minerals Operations represented
approximately 5% of Old Fordings total operating revenues in 2002,
approximately 5% in 2001 and

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approximately 6% in 2000. Pursuant to the Arrangement, the Trust holds a 100%
indirect interest in the Industrial Minerals Operations.

Willsboro

The processing plant is located in Willsboro, New York, and the mine site is
located 22 kilometres west of Willsboro. The processing facilities include dry
processing equipment and a surface treatment plant, warehouse space and truck
and rail loadout facilities. The mining operation consists of the active Lewis
Pit and the Oak Hill deposit located about 1.6 kilometres from the Lewis Pit.
The mine sites are comprised of 289 hectares of wollastonite lands that are
held through direct ownership or controlled through mineral lease.
Approximately 43 hectares of these lands are currently being mined or are
scheduled for mining. See Other Information Regarding Fording  Real
Property.

Willsboros primary product is wollastonite. It is extracted using open pit
mining techniques and trucked to the Willsboro processing plant. In 2002, the
Willsboro operation produced 49,500 tonnes of wollastonite (58,500 tonnes in
2001 and 76,400 tonnes in 2000). The current annual production capacity of the
processing plant is 130,000 tonnes of wollastonite and the current annual
production capacity of the mine is 300,000 tonnes of wollastonite ore. The
current mine plan for the Willsboro operation contemplates the production of
wollastonite from this property for in excess of 20 years at 2002 production rates.
Willsboro products are marketed through a network of distributors, agents and
direct sales personnel.

Willsboros quality management system is in compliance with the ISO 9002
quality standard, as verified by the Quality Management Institute.

Pilares

Pilares processing facilities, truck loadout and mine site 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 and railroad loadout facilities. A
warehouse and rail loadout facility are located in Hermosillo. The mine site
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. See Other Information Regarding Fording  Real Property. Commercial
production began at Pilares in 1998.

Pilares primary product is wollastonite. It is extracted using open pit
mining techniques for processing at the propertys on-site plants. In 2002,
the Pilares operation produced 29,200 tonnes of wollastonite (26,500 tonnes in
2001 and 30,800 tonnes in 2000). The current annual production capacity of the
processing plants is 150,000 tonnes of wollastonite and the current annual
production capacity of the mine is 240,000 tonnes of wollastonite ore. The
operations annual production could be increased to 240,000 tonnes through wet
plant equipment expansion to respond to an increase in market demand for
wollastonite. Reserves at Pilares are sufficient to support annual production
of 240,000 tonnes for in excess of 50 years. Pilares products are marketed
through a network of distributors, agents and direct sales personnel. Pilares
contracts with an affiliate, Nycomex S.A. de C.V. (Nycomex), for the supply
of labour.

Pilares quality management system is in compliance with the ISO 9001 quality
standard and the ISO 14001 environmental standard, as verified by the Quality
Management Institute.

Seneca

Senecas processing facilities are located in Seneca, Missouri. The processing
facilities include a processing plant and drying shed. The mine site is
located approximately 12 kilometres northwest of Seneca in Ottawa County,
Oklahoma. The mine site is comprised of 1,168 hectares of fee simple lands of
which approximately 14 hectares are currently being mined or are scheduled for
mining. See Other Information Regarding Fording  Real Property.

Senecas primary product is tripoli. It is extracted using open pit mining
techniques and trucked to the Seneca processing facilities. In 2002, Seneca
produced 12,700 tonnes of tripoli (11,700 tonnes in 2001 and 14,300 tonnes in
2000). 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 Seneca contemplates the production of tripoli from this property for

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at least the next 30 years at 2002 production rates. Seneca directly markets a
variety of abrasive products to the construction and manufacturing industries
for use in buffing and polishing applications.

The Last Three Years

The principal factor that has affected the Industrial Minerals Operations over
the last three years is the oversupply of wollastonite, the principal product
produced by the Industrial Minerals Operations. The commencement of the
Pilares operation, coincident with additional production from new entrants and
established producers coming online, had the effect of reducing the price of
wollastonite, particularly with respect to low-value wollastonite products. In
2002, sales of industrial minerals across Old Fordings product categories
declined primarily as a result of Old Fordings exit from lower-priced markets
and continued weak economies in the United States and Europe. Lower sales
volumes were partially offset by higher average sales prices. In 2002,
wollastonite sales volumes were 84,000 tonnes, a decrease of 15% from the
previous year. Sales volumes of tripoli and other minerals declined
approximately 6% to 15,000 tonnes. Sales of low-value wollastonite products
continued to face intense competition, but sales of high-value wollastonite
products for the automotive and appliance industries increased as manufacturers
continued to convert traditional metal components to plastic.

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 since segregation of the ore source indicates only
trace levels of asbestiform tremolite in some product shipped. Fording 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 Pilares
indicates no detectable levels of asbestiform mineral.

Due to a history of operating losses and uncertainty around future improvement,
Fording updated its assessment of the recoverability of its investment in
assets related to the Pilares operation following completion of the most recent
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.

OTHER INFORMATION REGARDING FORDING

Reserves and Resources

Reserves and resources as at December 31, 2002 have been estimated internally
by Fordings engineers and geologists in accordance with the National
Instrument under the supervision of New Fordings Manager, Energy Resource
Planning, C.J. McKenny, Professional Geologist. 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.

The Trust is subject to the provisions of the National Instrument with respect
to the manner in which it reports its 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 A 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.

19



---



##### 



With respect to minerals other than coal, Part Two of Appendix A to this
document contains the definitions ascribed by the Canadian Institute of Mining,
Metallurgy and Petroleum Standards on Mineral Resources and Reserves
Definitions and Guidelines, 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 A to this document contains the definitions ascribed by
SEC Guide 7 to the terms Reserve, Proven Reserves and Probable Reserves,
which are applicable to Fordings 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.

Surface Mining

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

20



---



##### 



Reserves and Resources

Proven and Probable Coal Reserves

The following table sets forth Old Fordings Proven and Probable coal Reserves
at December 31, 2002:

|                        |               |           |     |             |  |          |     |              |  |        |     |          |  |             |               |    |      |   |           |       |       |     |         |        |  |        |           |      |         |      |   |  | 
|----------------------- | ------------- | --------- | --- | ----------- |  | -------- | --- | ------------ |  | ------ | --- | -------- |  | ----------- | ------------- | -- | ---- | - | --------- | ----- | ----- | --- | ------- | ------ |  | ------ | --------- | ---- | ------- | ---- | - |  | 
|COAL RESERVES          
|As At December 31, 2002
|(millions of tonnes)(1)
|                       
|                        |               |           |     |             |  |          |     |              |  |        |     |          |  |             |               |    |      |   |           |       |       |     |         |        |  |        | Calorific |      | Sulphur
|                        |               |           |     |             |  |          |     |              |  |        |     |          |  |             |               |    |      |   | Ownership |       | Value |     | Percent
|Rank                    |               | Proven(5) |     | Probable(5) |  | Total(5) |     | Type of Coal |  | (%)(2) |     | kJ/kg(5) |  | (by wt.)(5)
|                        |               |           |     |             |  |          |     |              |  |        |     |          |  |            
|Bituminous Coal         |               |           |     |             |  |          |     |              |  |        |     |          |  |             |               |    |      |   |           |       |       |     |         |        |  |        |           |      |         |      |   | 
|                        | Fording River |           |     | 147         |  |          |     | 117          |  |        |     | 264      |  |             | Metallurgical |    |      | L |           |       |       | 100 |         |        |  | 32,600 |           |      |         | 0.62 | %
|                        | Greenhills    |           |     | 99          |  |          |     | 8            |  |        |     | 107      |  |             | Metallurgical |    | FS   |   |           | 100   |       |     |         | 32,600 |  |        |           | 0.62 | %      
|                        | Coal Mountain |           |     | 31          |  |          |     | 1            |  |        |     | 32       |  |             | Metallurgical |    |      | L |           |       |       | 100 |         |        |  | 29,900 |           |      |         | 0.35 | %
|                        |               |           |     |             |  |          |     |              |  |        |     |          |  |             |               |    |      |   |           |       |       |     |         |        |  |        |           |      |         |      |   | 
|Total                   |               |           | 277 |             |  |          | 126 |              |  |        | 403 |          |  |             |               |    |      |   |           |       |       |     |         |        |  |        |           |      |         |      |   | 
|                        |               |           |     |             |  |          |     |              |  |        |     |          |  |             |               |    |      |   |           |       |       |     |         |        |  |        |           |      |         |      |   | 
|Sub-bituminous Coal     |               |           |     |             |  |          |     |              |  |        |     |          |  |             |               |    |      |   |           |       |       |     |         |        |  |        |           |      |         |      |   | 
|                        | Genesee       |           |     | 64          |  |          |     | 70           |  |        |     | 134      |  |             | Thermal       |    | FS/L |   |           | 83/17 |       |     |         | 18,900 |  |        |           | 0.23 | %      
|                        | Brooks(3)     |           |     | 92          |  |          |     | 74           |  |        |     | 166      |  |             | Thermal       |    | FS   |   |           | 100   |       |     |         | 19,300 |  |        |           | 0.61 | %      
|                        | Heatburg(3)   |           |     |            |  |          |     | 421          |  |        |     | 421      |  |             | Thermal       |    | FS/L |   |           | 62/38 |       |     |         | 16,000 |  |        |           | 0.39 | %      
|                        | Other(4)      |           |     | 122         |  |          |     |             |  |        |     | 122      |  |             | Thermal       |    |      |   |           |       |       |     |         |        |  |        |           |      |         |      |  
|                        |               |           |     |             |  |          |     |              |  |        |     |          |  |             |               |    |      |   |           |       |       |     |         |        |  |        |           |      |         |      |   | 
|Total                   |               |           | 278 |             |  |          | 565 |              |  |        | 843 |          |  |             |               |    |      |   |           |       |       |     |         |        |  |        |           |      |         |      |   | 
|                        |               |           |     |             |  |          |     |              |  |        |     |          |  |             |               |    |      |   |           |       |       |     |         |        |  |        |           |      |         |      |   | 
|Lignite Coal            |               |           | 3   |             |  |          |    |              |  |        | 3   |          |  | Thermal     |               | FS |      |   | 100       |       |       |     | 12,100  |        |  |        | 0.43      | %   



---

|Notes:
|------
|      
|(1)   
|      
|(2)   
|      
|(3)   
|      
|(4)   
|      
|(5)   

Had Old Fordings 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 2002 Old Fording had all necessary permits which were required to mine the
tonnes attributed to the above-noted mines. For information as to how Old
Fording held its interest in the lands in which the above-noted Reserves are
situate, see Other Information Regarding Fording  Real Property.

21



---



##### 



Measured and Indicated Coal Resources

The following table sets forth Fordings coal Resources (consisting of
Measured and Indicated coal Resources) as at December 31, 2002:

|                        |               |             |       |              |  |          |       |              |  |              |       |          |  |             |               |   |    |   |   |        |  |        |           |      |         |      |   |  | 
|----------------------- | ------------- | ----------- | ----- | ------------ |  | -------- | ----- | ------------ |  | ------------ | ----- | -------- |  | ----------- | ------------- | - | -- | - | - | ------ |  | ------ | --------- | ---- | ------- | ---- | - |  | 
|COAL RESOURCES         
|As At December 31, 2002
|(millions of tonnes)(1)
|                       
|                        |               |             |       |              |  |          |       |              |  |              |       |          |  |             |               |   |    |   |   |        |  |        | Calorific |      | Sulphur
|                        |               |             |       |              |  |          |       |              |  |              |       |          |  |             |               |   |    |   |   |        |  |        | Value     |      | Percent
|Rank                    |               | Measured(4) |       | Indicated(4) |  | Total(4) |       | Type of Coal |  | Ownership(2) |       | kJ/kg(4) |  | (by wt.)(4)
|                        |               |             |       |              |  |          |       |              |  |              |       |          |  |            
|Bituminous Coal         |               |             |       |              |  |          |       |              |  |              |       |          |  |             |               |   |    |   |   |        |  |        |           |      |         |      |   | 
|                        | Fording River |             |       | 362          |  |          |       | 276          |  |              |       | 638      |  |             | Metallurgical |   |    | L |   |        |  | 32,600 |           |      |         | 0.62 | %
|                        | Greenhills    |             |       | 5            |  |          |       | 325          |  |              |       | 330      |  |             | Metallurgical |   | FS |   |   | 32,600 |  |        |           | 0.62 | %      
|                        | Coal Mountain |             |       | 70           |  |          |       | 41           |  |              |       | 111      |  |             | Metallurgical |   |    | L |   |        |  | 29,900 |           |      |         | 0.35 | %
|                        | Elco(3)       |             |       | 56           |  |          |       | 39           |  |              |       | 95       |  |             | Metallurgical |   |    | L |   |        |  | 32,000 |           |      |         | 0.60 | %
|                        | Mt. Duke(3)   |             |       |             |  |          |       | 157          |  |              |       | 157      |  |             | Metallurgical |   |    | L |   |        |  | 32,000 |           |      |         | 0.45 | %
|                        |               |             |       |              |  |          |       |              |  |              |       |          |  |             |               |   |    |   |   |        |  |        |           |      |         |      |   | 
|Total                   |               |             | 493   |              |  |          | 838   |              |  |              | 1,331 |          |  |             |               |   |    |   |   |        |  |        |           |      |         |      |   | 
|                        |               |             |       |              |  |          |       |              |  |              |       |          |  |             |               |   |    |   |   |        |  |        |           |      |         |      |   | 
|Sub-bituminous Coal     |               |             |       |              |  |          |       |              |  |              |       |          |  |             |               |   |    |   |   |        |  |        |           |      |         |      |   | 
|                        | Genesee       |             |       |             |  |          |       |             |  |              |       |         |  |             |               |  |    |   |   |       |  |        |           |      |         |      |   |  | 
|                        | Brooks(3)     |             |       | 55           |  |          |       | 65           |  |              |       | 120      |  |             | Thermal       |   | FS |   |   | 19,300 |  |        |           | 0.61 | %      
|                        | Other(4)      |             |       | 2,252        |  |          |       | 2,936        |  |              |       | 5,188    |  |             | Thermal       |   |    |  |   |        |  |        |           |      |         |      |  
|                        |               |             |       |              |  |          |       |              |  |              |       |          |  |             |               |   |    |   |   |        |  |        |           |      |         |      |   | 
|Total                   |               |             | 2,307 |              |  |          | 3,001 |              |  |              | 5,308 |          |  |             |               |   |    |   |   |        |  |        |           |      |         |      |   | 
|                        |               |             |       |              |  |          |       |              |  |              |       |          |  |             |               |   |    |   |   |        |  |        |           |      |         |      |   | 
|Lignite Coal            |               |             |      |              |  |          |      |              |  |              |      |          |  |             |              |   |    |   |  |        |  |        |          |      |         |      |  | 



---

|Notes:
|------
|      
|(1)   
|      
|(2)   
|      
|(3)   
|      
|(4)   

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, Fording has referred to Resources as non-reserves.

22



---



##### 



Inferred Coal Resources

The following table sets forth Old Fordings Inferred Resources for coal as at
December 31, 2002:

|                                                |               |                       |    |       |       | 
|----------------------------------------------- | ------------- | --------------------- | -- | ----- | ----- | 
|INFERRED COAL RESOURCES                        
|As At December 31, 2002 (millions of tonnes)(1)
|                                               
|Rank                                            |               | Inferred Resources(3)
|                                                |               |                      
|Bituminous Coal                                 |               |                       |    |      
|                                                | Fording River |                       |    | 2,757 |      
|                                                | Greenhills    |                       |    | 649   |      
|                                                | Coal Mountain |                       |    | 24    |      
|                                                | Other(2)      |                       |    | 450   |      
|                                                |               |                       |    |      
|                                                |               | Total Bituminous      |    |       | 3,880 | 
|                                                |               |                       |    |      
|Sub-bituminous Coal                             |               |                       |    |      
|                                                | Genesee       |                       |    |      |      
|                                                | Other(2)      |                       |    | 3,830 |      
|                                                |               |                       |    |      
|                                                |               | Total Sub-bituminous  |    |       | 3,830 | 
|                                                |               |                       |    |      
|Lignite Coal                                    |               |                       | 29 |      



---

|Notes:
|------
|      
|(1)   
|      
|(2)   
|      
|(3)   

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,
Fording has referred to Inferred Resources as non-reserves.

Proven and Probable Industrial Mineral and Potash Reserves

The following table sets forth Old Fordings Proven and Probable Reserves of
wollastonite, potash and tripoli as at December 31, 2002:

|                                                |        |           |    |             |  |          |    |          |  |  |     |     |  |  |       |      |  
|----------------------------------------------- | ------ | --------- | -- | ----------- |  | -------- | -- | -------- |  |  | --- | --- |  |  | ----- | ---- | -
|INDUSTRIAL MINERAL AND POTASH RESERVES         
|As At December 31, 2002 (millions of tonnes)(1)
|                                               
|Minerals                                        |        | Proven(4) |    | Probable(4) |  | Total(4) |    | Grade(3)
|                                                |        |           |    |             |  |          |    |         
|Wollastonite                                    |        |           |    |             |  |          |    |          |  |  |     |     |  |  |       |     
|                                                | NYCO   |           |    | 5           |  |          |    | 1        |  |  |     | 6   |  |  |       | 54.5 | %
|                                                | Minera |           |    | 20          |  |          |    | 85       |  |  |     | 105 |  |  |       | 54.8 | %
|                                                |        |           |    |             |  |          |    |          |  |  |     |     |  |  |       |     
|Total Wollastonite                              |        |           | 25 |             |  |          | 86 |          |  |  | 111 |     |  |  |       |     
|                                                |        |           |    |             |  |          |    |          |  |  |     |     |  |  |       |     
|Potash(2)                                       |        |           |   |             |  |          |   |          |  |  | 264 |     |  |  | 21-25 | %   
|Tripoli                                         |        |           | 2  |             |  |          |   |          |  |  | 2   |     |  |  | 94-98 | %   



---

|Notes:
|------
|      
|(1)   
|      
|(2)   

23



---



##### 



|(3) |  | 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) and for potash, it is reported
as a percentage of K20 (potassium oxide) equivalent.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(4) |  | Numbers have been rounded.                                                                                                                                                                                                                                                          

Had Old Fordings industrial mineral and potash 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 2002, Old Fording had all necessary permits which are required to mine the
tonnes attributed to the above-noted mines.

For information relating to how Fording held its interest in the lands on which
the above-noted reserves are situate in 2002, see Other Information Regarding
Fording  Real Property.

Measured and Indicated Industrial Mineral and Potash Resources

The following table sets forth Old Fordings industrial mineral and potash
Resources (consisting of Measured Resources and Indicated Resources of
wollastonite, potash and tripoli) as at December 31, 2002:

|                                        |        |             |   |              |  |          |     |          |  |  |     |   |  |  |       |      |  
|--------------------------------------- | ------ | ----------- | - | ------------ |  | -------- | --- | -------- |  |  | --- | - |  |  | ----- | ---- | -
|INDUSTRIAL MINERAL AND POTASH RESOURCES
|As At December 31, 2002                
|(millions of tonnes)(1)                
|                                       
|Minerals                                |        | Measured(4) |   | Indicated(4) |  | Total(4) |     | Grade(3)
|                                        |        |             |   |              |  |          |     |         
|Wollastonite                            |        |             |   |              |  |          |     |          |  |  |     |   |  |  |       |     
|                                        | NYCO   |             |   | 1            |  |          |     | 2        |  |  |     | 3 |  |  |       | 54.5 | %
|                                        | Minera |             |   |             |  |          |     |         |  |  |     |  |  |  |       |     |  
|                                        |        |             |   |              |  |          |     |          |  |  |     |   |  |  |       |     
|Total Wollastonite                      |        |             | 1 |              |  |          | 2   |          |  |  | 3   |   |  |  |       |     
|                                        |        |             |   |              |  |          |     |          |  |  |     |   |  |  |       |     
|Potash(2)                               |        |             |  |              |  |          | 186 |          |  |  | 186 |   |  |  | 21-25 | %   
|Tripoli                                 |        |             |  |              |  |          |    |          |  |  |    |   |  |  | 94-98 | %   



---

|Notes:
|------
|      
|(1)   
|      
|(2)   
|      
|(3)   
|      
|(4)   

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, Fording has referred to Resources as non-reserves.

24



---



##### 



Changes in Reserves and Resources

The following tables set forth the changes in Old Fordings Reserves and
Resources during 2002. The changes are categorized as production,
additions or deletions to Old Fordings Reserves and Resources as at
December 31, 2001:

|                                       |  |             |     |              |  |       |     |          |  |           |     |       |  |          |       |  |  |  |       |  |  |  |       |  |  |  |       | 
|-------------------------------------- |  | ----------- | --- | ------------ |  | ----- | --- | -------- |  | --------- | --- | ----- |  | -------- | ----- |  |  |  | ----- |  |  |  | ----- |  |  |  | ----- | 
|Changes in Reserves and Resources Coal
|(millions of tonnes(1))               
|                                      
|                                       |  | Reserves(2) |     | Resources(3)
|                                       |  |             |     |             
|Coal Type                              |  | Proven      |     | Probable     |  | Total |     | Measured |  | Indicated |     | Total |  | Inferred
|                                       |  |             |     |              |  |       |     |          |  |           |     |       |  |         
|Bituminous Coal                        |  |             |     |              |  |       |     |          |  |           |     |       |  |          |       |  |  |  |       |  |  |  |       |  |  |  |       | 
|Dec. 31, 2001                          |  |             | 292 |              |  |       | 68  |          |  |           | 360 |       |  |          | 497   |  |  |  | 758   |  |  |  | 1,255 |  |  |  | 3,529 | 
|Additions                              |  |             | 1   |              |  |       | 58  |          |  |           | 59  |       |  |          | 8     |  |  |  | 88    |  |  |  | 96    |  |  |  | 351   | 
|Production                             |  |             | 14  |              |  |       |    |          |  |           | 14  |       |  |          |      |  |  |  |      |  |  |  |      |  |  |  |      | 
|Deletions                              |  |             | 2   |              |  |       |    |          |  |           | 2   |       |  |          | 12    |  |  |  | 8     |  |  |  | 20    |  |  |  |      | 
|                                       |  |             |     |              |  |       |     |          |  |           |     |       |  |          |       |  |  |  |       |  |  |  |       |  |  |  |       | 
|December 31, 2002                      |  |             | 277 |              |  |       | 126 |          |  |           | 403 |       |  |          | 493   |  |  |  | 838   |  |  |  | 1,331 |  |  |  | 3,880 | 
|                                       |  |             |     |              |  |       |     |          |  |           |     |       |  |          |       |  |  |  |       |  |  |  |       |  |  |  |       | 
|Sub-bituminous Coal                    |  |             |     |              |  |       |     |          |  |           |     |       |  |          |       |  |  |  |       |  |  |  |       |  |  |  |       | 
|Dec. 31, 2001                          |  |             | 263 |              |  |       | 588 |          |  |           | 851 |       |  |          | 433   |  |  |  | 385   |  |  |  | 818   |  |  |  | 6,095 | 
|Additions                              |  |             | 21  |              |  |       |    |          |  |           | 21  |       |  |          | 1,874 |  |  |  | 2,616 |  |  |  | 4,490 |  |  |  |      | 
|Production                             |  |             | 6   |              |  |       |    |          |  |           | 6   |       |  |          |      |  |  |  |      |  |  |  |      |  |  |  |      | 
|Deletions                              |  |             |    |              |  |       | 23  |          |  |           | 23  |       |  |          |      |  |  |  |      |  |  |  |      |  |  |  | 2,265 | 
|                                       |  |             |     |              |  |       |     |          |  |           |     |       |  |          |       |  |  |  |       |  |  |  |       |  |  |  |       | 
|December 31, 2002                      |  |             | 278 |              |  |       | 565 |          |  |           | 843 |       |  |          | 2,307 |  |  |  | 3,001 |  |  |  | 5,308 |  |  |  | 3,830 | 
|                                       |  |             |     |              |  |       |     |          |  |           |     |       |  |          |       |  |  |  |       |  |  |  |       |  |  |  |       | 
|Lignite                                |  |             |     |              |  |       |     |          |  |           |     |       |  |          |       |  |  |  |       |  |  |  |       |  |  |  |       | 
|Dec. 31, 2001                          |  |             | 3   |              |  |       |    |          |  |           | 3   |       |  |          |      |  |  |  |      |  |  |  |      |  |  |  | 29    | 
|Additions                              |  |             |    |              |  |       |    |          |  |           |    |       |  |          |      |  |  |  |      |  |  |  |      |  |  |  |      | 
|Production                             |  |             |    |              |  |       |    |          |  |           |    |       |  |          |      |  |  |  |      |  |  |  |      |  |  |  |      | 
|Deletions                              |  |             |    |              |  |       |    |          |  |           |    |       |  |          |      |  |  |  |      |  |  |  |      |  |  |  |      | 
|                                       |  |             |     |              |  |       |     |          |  |           |     |       |  |          |       |  |  |  |       |  |  |  |       |  |  |  |       | 
|December 31, 2002                      |  |             | 3   |              |  |       |    |          |  |           | 3   |       |  |          |      |  |  |  |      |  |  |  |      |  |  |  | 29    | 
|                                       |  |             |     |              |  |       |     |          |  |           |     |       |  |          |       |  |  |  |       |  |  |  |       |  |  |  |       | 



---

|Notes:
|------
|      
|(1)   
|      
|(2)   
|      
|(3)   
|      

25



---



##### 



|                                                                   |  |          |    |           |  |       |    |          |  |           |     |       |  |  |   |  |  |  |     |  |  |  |     | 
|------------------------------------------------------------------ |  | -------- | -- | --------- |  | ----- | -- | -------- |  | --------- | --- | ----- |  |  | - |  |  |  | --- |  |  |  | --- | 
|Changes in Reserves and Resources  Industrial Minerals and Potash
|(millions of tonnes(1))                                           
|                                                                  
|                                                                   |  | Reserves |    | Resources
|                                                                   |  |          |    |          
|Mineral Type                                                       |  | Proven   |    | Probable  |  | Total |    | Measured |  | Indicated |     | Total
|                                                                   |  |          |    |           |  |       |    |          |  |           |     |      
|Wollastonite(2)                                                    |  |          |    |           |  |       |    |          |  |           |     |       |  |  |   |  |  |  |     |  |  |  |     | 
|(U.S.A.)                                                           |  |          |    |           |  |       |    |          |  |           |     |       |  |  |   |  |  |  |     |  |  |  |     | 
|Dec. 31, 2001                                                      |  |          | 4  |           |  |       | 2  |          |  |           | 6   |       |  |  |  |  |  |  | 1   |  |  |  | 1   | 
|Additions                                                          |  |          | 1  |           |  |       |   |          |  |           |    |       |  |  | 1 |  |  |  | 2   |  |  |  | 3   | 
|Production(4)                                                      |  |          | (0 | )         |  |       |   |          |  |           | (0  | )     |  |  |  |  |  |  |    |  |  |  |    | 
|Deletions                                                          |  |          |   |           |  |       | 1  |          |  |           |    |       |  |  |  |  |  |  | 1   |  |  |  | 1   | 
|                                                                   |  |          |    |           |  |       |    |          |  |           |     |       |  |  |   |  |  |  |     |  |  |  |     | 
|December 31, 2002                                                  |  |          | 5  |           |  |       | 1  |          |  |           | 6   |       |  |  | 1 |  |  |  | 2   |  |  |  | 3   | 
|                                                                   |  |          |    |           |  |       |    |          |  |           |     |       |  |  |   |  |  |  |     |  |  |  |     | 
|Wollastonite(2)                                                    |  |          |    |           |  |       |    |          |  |           |     |       |  |  |   |  |  |  |     |  |  |  |     | 
|(Mexico)                                                           |  |          |    |           |  |       |    |          |  |           |     |       |  |  |   |  |  |  |     |  |  |  |     | 
|Dec. 31, 2001                                                      |  |          | 20 |           |  |       | 85 |          |  |           | 105 |       |  |  |  |  |  |  |    |  |  |  |    | 
|Additions                                                          |  |          |   |           |  |       |   |          |  |           |    |       |  |  |  |  |  |  |    |  |  |  |    | 
|Production(4)                                                      |  |          | (0 | )         |  |       |   |          |  |           | (0  | )     |  |  |  |  |  |  |    |  |  |  |    | 
|Deletions                                                          |  |          |   |           |  |       |   |          |  |           |    |       |  |  |  |  |  |  |    |  |  |  |    | 
|                                                                   |  |          |    |           |  |       |    |          |  |           |     |       |  |  |   |  |  |  |     |  |  |  |     | 
|December 31, 2002                                                  |  |          | 20 |           |  |       | 85 |          |  |           | 105 |       |  |  |  |  |  |  |    |  |  |  |    | 
|                                                                   |  |          |    |           |  |       |    |          |  |           |     |       |  |  |   |  |  |  |     |  |  |  |     | 
|Tripoli(2)                                                         |  |          |    |           |  |       |    |          |  |           |     |       |  |  |   |  |  |  |     |  |  |  |     | 
|Dec. 31, 2001                                                      |  |          | 2  |           |  |       |   |          |  |           | 2   |       |  |  |  |  |  |  |    |  |  |  |    | 
|Additions                                                          |  |          |   |           |  |       |   |          |  |           |    |       |  |  |  |  |  |  |    |  |  |  |    | 
|Production(4)                                                      |  |          | (0 | )         |  |       |   |          |  |           | (0  | )     |  |  |  |  |  |  |    |  |  |  |    | 
|Deletions                                                          |  |          |   |           |  |       |   |          |  |           |    |       |  |  |  |  |  |  |    |  |  |  |    | 
|                                                                   |  |          |    |           |  |       |    |          |  |           |     |       |  |  |   |  |  |  |     |  |  |  |     | 
|December 31, 2002                                                  |  |          | 2  |           |  |       |   |          |  |           | 2   |       |  |  |  |  |  |  |    |  |  |  |    | 
|                                                                   |  |          |    |           |  |       |    |          |  |           |     |       |  |  |   |  |  |  |     |  |  |  |     | 
|Potash(3)                                                          |  |          |    |           |  |       |    |          |  |           |     |       |  |  |   |  |  |  |     |  |  |  |     | 
|Dec. 31, 2001                                                      |  |          |   |           |  |       |   |          |  |           | 256 |       |  |  |  |  |  |  | 186 |  |  |  | 186 | 
|Additions                                                          |  |          |   |           |  |       |   |          |  |           | 11  |       |  |  |  |  |  |  |    |  |  |  |    | 
|Production                                                         |  |          |   |           |  |       |   |          |  |           | 3   |       |  |  |  |  |  |  |    |  |  |  |    | 
|Deletions                                                          |  |          |   |           |  |       |   |          |  |           |    |       |  |  |  |  |  |  |    |  |  |  |    | 
|                                                                   |  |          |    |           |  |       |    |          |  |           |     |       |  |  |   |  |  |  |     |  |  |  |     | 
|December 31, 2002                                                  |  |          |   |           |  |       |   |          |  |           | 264 |       |  |  |  |  |  |  | 186 |  |  |  | 186 | 
|                                                                   |  |          |    |           |  |       |    |          |  |           |     |       |  |  |   |  |  |  |     |  |  |  |     | 



---

|Notes:
|------
|      
|(1)   
|      
|(2)   
|      
|(3)   
|      
|(4)   

Exploration and Development Activities

In 2002, Old Fording spent approximately $0.7 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 Old Fordings undeveloped
properties in 2002.

Drilling activity for exploration, development and production planning purposes
in 2002 totalled 24,300 metres on all Old Fording properties. 80% of the total
drilling was done on properties in the Mountain Operations, 17% on properties
in the Prairie Operations and 3% on properties in the Industrial Minerals
Operations. 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 Old Fordings
internal standards.

26



---



##### 



Real Property

The following chart lists significant mineral rights held by Old Fording as at
December 31, 2002:

|                                                      |                  |            |       |             |  |             |       |          |  |  |     |     |  |  |       |       | 
|----------------------------------------------------- | ---------------- | ---------- | ----- | ----------- |  | ----------- | ----- | -------- |  |  | --- | --- |  |  | ----- | ----- | 
|Mineral Holdings                                      |                  |            |       |             |  | Crown Lease |       | Freehold |  |  |     |    
|(thousand hectares)                                   |                  | Fee Simple |       | and License |  | Leases      |       | Total   
|                                                      |                  |            |       |             |  |             |       |         
|Coal                                                  |                  |            |       |             |  |             |       |          |  |  |     |     |  |  |       |      
|                                                      | British Columbia |            |       | 13.4        |  |             |       | 37.9     |  |  |     |    |  |  |       | 51.3  | 
|                                                      | Alberta          |            |       | 693.7       |  |             |       | 60.4     |  |  |     | 3.2 |  |  |       | 757.3 | 
|                                                      | Saskatchewan     |            |       | 3.5         |  |             |       |         |  |  |     |    |  |  |       | 3.5   | 
|                                                      |                  |            |       |             |  |             |       |          |  |  |     |     |  |  |       |      
|Potash                                                |                  |            |       |             |  |             |       |          |  |  |     |     |  |  |       |      
|                                                      | Saskatchewan     |            |       | 1.2         |  |             |       |         |  |  |     |    |  |  |       | 1.2   | 
|                                                      |                  |            |       |             |  |             |       |          |  |  |     |     |  |  |       |      
|All Mines and Minerals                                |                  |            |       |             |  |             |       |          |  |  |     |     |  |  |       |      
|Saskatchewan                                          |                  |            | 55.0  |             |  |             |      |          |  |  |    |     |  |  | 55.0  |      
|                                                      | New York         |            |       | 1.7         |  |             |       |         |  |  |     |    |  |  |       | 1.7   | 
|                                                      | Oklahoma         |            |       | 1.2         |  |             |       |         |  |  |     |    |  |  |       | 1.2   | 
|                                                      | Mexico           |            |       |            |  |             |       | 9.4      |  |  |     |    |  |  |       | 9.4   | 
|                                                      |                  |            |       |             |  |             |       |          |  |  |     |     |  |  |       |      
|All Mines and Minerals except
Petroleum & Natural Gas |                  |            |       |             |  |             |       |          |  |  |     |     |  |  |       |      
|                                                      | British Columbia |            |       | 10.2        |  |             |       |         |  |  |     |    |  |  |       | 10.2  | 
|                                                      | Alberta          |            |       | 13.9        |  |             |       |         |  |  |     |    |  |  |       | 13.9  | 
|                                                      | Saskatchewan     |            |       | 4.8         |  |             |       |         |  |  |     |    |  |  |       | 4.8   | 
|                                                      | Manitoba         |            |       | 0.2         |  |             |       |         |  |  |     |    |  |  |       | 0.2   | 
|                                                      |                  |            |       |             |  |             |       |          |  |  |     |     |  |  |       |      
|Total (1)                                             |                  |            | 798.8 |             |  |             | 107.7 |          |  |  | 3.2 |     |  |  | 909.7 |      
|                                                      |                  |            |       |             |  |             |       |          |  |  |     |     |  |  |       |      



---

|Notes:
|------
|      
|(1)   

Environmental Protection

In 2002, Old Fording did not incur any material remediation expenses or any
material fines relating to noncompliance with applicable environmental laws.
Further, to the knowledge of the Trust, no member of the Fording Group 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 on Fording.

Mount Washington

On October 30, 2001 the Canadian Pacific Railway Company (CPR), by notice
under Article 6 of the arrangement agreement pursuant to which Canadian Pacific
Limited divided its holdings into five separate public companies including Old
Fording and CPR (the CPL Arrangement Agreement), asserted a claim against Old
Fording relating to purported environmental damage at the former Mount
Washington minesite on Vancouver Island. The notice states that CPR, as the
parent company to the registered titleholder of the minerals rights, was served
with an Inspectors Direction under the Fisheries Act(Canada) on June 26, 2001
wherein CPR and the third-party owner of the surface rights were directed to
remediate the Mount Washington minesite. CPR has claimed indemnification
against Old Fording under the CPL Arrangement Agreement on the basis that
responsibility for remediation of the Mount Washington minesite relates to Old
Fordings business. On April 4, 2002 CPR by letter directed Old Fording,
together with two other parties, to assume care and control of the remediation
of the Mount Washington minesite. Old Fording has advised CPR that it disputes
any liability in connection with the Inspectors Direction or under the CPL
Arrangement Agreement. On May 16, 2003, Fording received an
Inspectors Direction under the Fisheries Act (Canada) that directs Fording to take steps to prevent the deposit of deleterious substances
from the former Mount Washington mine site into nearby waterways. On May 20, 2003, Fording
provided notice to CPR that it is claiming indemnification against CPR under the CPL Arrangement
Agreement for all costs associated with Fordings compliance
with the Inspectors Direction of May 16, 2003.

27



---



##### 



Reclamation Activities

The Alberta and British Columbia governments require security to be posted for
reclamation obligations based on forecasted costs to reclaim mined sites. The
Fording Group satisfies this requirement for security by posting letters of
credit issued by a Canadian chartered bank. The Fording Groups reclamation
liability is generally accrued on a unit of production method at all active
mining operations.

Human Resources

As at December 31, 2002 Old Fordings workforce consisted of over 1,800
employees, with approximately 91% of those employees residing in Canada, 5% in
the United States and 4% in Mexico.

Greenhills, Genesee and Pilares are non-union operations. All three of these
operations provide employees with comprehensive wage and benefit coverages
which are competitive relative to their industries and geographic locations.

Fording River, Coal Mountain, Whitewood, Willsboro and Seneca are unionized
operations. In the past, Old Fording sought to maintain its competitive
position and ensure stability by entering into long-term collective agreements.
Old Fording negotiated five year agreements at each of its unionized
operations in the most recent round of collective bargaining. The expiry dates
for the current collective agreement at those unionized operations are as
follows:

| |                    |  |                   
| | ------------------ |  | ------------------
| |    Willsboro:     |  | June 30, 2006     
| |    Fording River: |  | April 30, 2006    
| |    Whitewood:     |  | September 30, 2005
| |    Coal Mountain: |  | December 31, 2004 
| |    Seneca:        |  | June 30, 2003     

RISKS AND OTHER TRENDS

United Nations Framework Convention on Climate Change

Canada and the United States have not introduced comprehensive regulations
addressing greenhouse gas emissions, including emission targets for specific
industrial sectors. While the United States has decided that it will not
ratify the Kyoto Protocol, an international agreement which sets limits on
greenhouse gas emissions from certain signatory countries, the Canadian
Parliament has voted to ratify this agreement. Should this agreement enter
into force, Canada will be committed to limiting its net greenhouse gas
emissions to 6% below the levels emitted in 1990. Recent statements from the
federal government indicate that no particular industry sector will be
discriminated against under the agreement. Canadas current level of
greenhouse gas emissions significantly exceeds the agreed-to limit. The
primary source of greenhouse gas emissions in Canada is the use of hydrocarbon
energy. The operations of the Fording Group depend significantly on
hydrocarbon energy sources to conduct daily operations, and there are currently
no economic substitutes for these forms of energy. The federal and provincial
governments have not finalized any formal regulatory programs to control
greenhouse gases, and it is not yet possible to reasonably estimate the nature,
extent, timing and cost of any programs contemplated or their potential effects
on the operations of the Fording Group. Most of its products are sold outside
of Canada, and sales are not expected to be significantly affected by Canadas
Kyoto ratification decision. However, the broad adoption of emission
limitations or other regulatory efforts to control greenhouse gas emissions may
affect the demand for coal, oil and natural gas, as well as increase production
and transportation costs.

Aboriginal Rights Claims

Canadian courts have recognized that aboriginal peoples may continue to have
certain rights at law in respect of land used or occupied by their ancestors
where treaties have not been concluded which extinguish those rights. These
rights may vary from limited rights of use for traditional purposes to a right
of aboriginal title and will depend upon, among other things, the nature and
extent of prior aboriginal use and occupation. The courts have encouraged the
federal and provincial governments and aboriginal peoples to resolve rights
claims through negotiation of treaties.

28



---



##### 



In British Columbia, few treaties exist with aboriginal peoples. In the mid
1990s, the provincial government, together with the federal government,
established the British Columbia Treaty Commission to facilitate negotiations
with aboriginal peoples to resolve outstanding aboriginal rights and other
claims. Under this process, each aboriginal people files a statement of intent
to negotiate, identifying the territory in which they have historically lived and
carried out traditional activities. Nearly all of the land in British Columbia
has been identified as being part of a traditional territory for at least one
aboriginal people.

It is not possible to predict with certainty the impact which future treaties
may have on resource development in British Columbia or the ability of the
Fording Group to develop new prospects or further develop existing properties.

Principal Competition

In the metallurgical coal markets, the Fording Group competes primarily with
coal producers from Australia and the United States. The supply of coal in the
global markets and the demand for coal among world steel producers provides for
a competitive seaborne metallurgical coal market. In this regard, Australian
producers have improved their competitive position for a number of reasons
including the decline of the Australian dollar compared to the Canadian dollar
and improved operating efficiencies. A number of steel producers deal with
multiple coal suppliers in order to ensure a security of supply which promotes
further competitiveness in this market, although this dynamic has been off-set
somewhat by consolidation in the metallurgical coal market.

In the industrial minerals markets, Willsboro and Pilares compete primarily
with producers in India, China and Europe, as well as with producers of
substitute industrial minerals. Aggressive competition from other producers,
particularly in China, has resulted in significant weakening of commodity
prices, especially in low value products. The competitive position of the
Fording Group 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 mineral deposits,
currency exchange rates, operating and management skill, and government
taxation and policy.

Foreign Operations

The Fording Group has operations throughout North America and customers around
the world. As such, it is exposed to changes in various markets and economies,
and its operations can be affected by a variety of conditions.

Operations and Sales to Foreign Countries

In addition to Canada and the United States, the Fording Group operates in
Mexico and sells its products to customers located around the world.
Operations and sales to customers in foreign countries expose the Fording Group
to added risks and uncertainties due to the different economic, political and
cultural environments of those countries. Some of these risks include the
nationalization of foreign enterprises, expropriation of assets without
adequate compensation, social unrest, political uprisings, trade barriers,
capital flow controls and material changes in taxation. For example, the
Pilares operation has, at times, been negatively affected by inconsistent
assessment of taxes and has had to contend with higher rates of inflation than
experienced in Canada.

Foreign Currency Exchange Risk

The Fording Groups operating results and cash flows are affected by foreign
currency exchange rates. Exchange rate movements can have a significant impact
on results as a large portion of operating costs are incurred in Canadian
dollars and most revenues are earned in U.S. dollars.

Export Market Risk

The prices for export metallurgical coal have a significant impact on the
Fording Groups profitability and are dependent on the balance between the
supply of and the demand for seabourne metallurgical coking coal in the worlds
metallurgical coal markets and, to a lesser degree, the economic conditions of
those markets. Profitability is also affected by production and transportation
costs, product quality and taxation.

29



---



##### 



Risk Factors

This annual information form does not contain a comprehensive discussion of the
risks which could have a material adverse impact on the financial condition and
results of operation of the Fording Group. Information relating to such risks
and sensitivity of operating income to changing conditions is contained in Old
Fordings 2002 consolidated annual financial statements and managements
discussion and analysis incorporated by reference therein. Old Fordings 2002
consolidated annual financial statements and managements discussion and
analysis thereof can be found in Fordings 2002 Annual Report
which was mailed to Unitholders and electronically filed at
www.sedar.com. Old Fordings 2002 consolidated annual financial statements and
managements discussion and analysis thereof has also been electronically filed on the
EDGAR filing system for the U.S. Securities and Exchange Commission accessible at www.sec.gov.
Other risks
are identified and discussed in the Information Circular and in the three
supplements thereto.

SUBSEQUENT EVENTS  THE ARRANGEMENT

Introduction

On February 28, 2003 the transactions contemplated by the Combination Agreement
were completed and the Arrangement became effective, resulting in the
reorganization of Old Fordings business under the Trust and the creation of
the Partnership.

The Arrangement was a complex transaction involving a number of parties and
numerous steps. In general terms, the Arrangement provided for the following:



| |  |  | the reorganization of Old Fordings business under the Trust;                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | the creation of the Partnership;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  |  | the purchase by New Fording from the Luscar/CONSOL Joint Ventures of the
Luscar Contributed Assets, including the Luscar mine, the Line Creek mine,
the Cheviot project and a 46.4% interest in Neptune, in consideration for the
issuance of 6.4 million Units plus an amount on account of working capital
and the grant of the Luscar Royalty to Luscar and CONSOL;                                                                                                                                                                   
|
| |  |  | the sale of the Prairie Operations by New Fording to SCAI for cash
consideration of $225 million plus an amount on account of working capital
and the retention of the Fording Royalty by New Fording;                                                                                                                                                                                                                                                                                                                                   
|
| |  |  | the contribution to the Partnership of: (i) the Fording Contributed
Assets, including the Fording River mine, the Coal Mountain mine and
old FCLs interest in the Greenhills mine, representing substantially all of Old
Fordings metallurgical coal business; and (ii) the Luscar Contributed
Assets, as well as the liabilities and obligations related thereto including
the obligations attaching to the Luscar Royalty, in consideration of New
Fordings 65% Partnership interest and the payment of $125 million to New
Fording;
|
| |  |  | the contribution by Teck to the Partnership of the Teck Contributed
Assets, including the Elkview mine, representing substantially all of Tecks
North American metallurgical coal business, as well as the liabilities and
obligations relating thereto, and $125 million in cash, in consideration of
Tecks 35% Partnership interest (inclusive of the interests of its
affiliates);                                                                                                                                                  
|
| |  |  | the subscriptions by each of Teck and Westshore for $150 million of
Units (4.3 million Units), the subscription by Sherritt for $100 million of
Units (2.9 million Units) and the subscription by OTPP for $275 million of
Units (7.9 million Units);                                                                                                                                                                                                                                                                                    
|
| |  |  | the entering into by Old FCL, on behalf of the Partnership, of a long
term port agreement with Westshore Terminals Ltd.; and                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  |  | the payment by New Fording of $50 million in the aggregate to OTPP and
Sherritt and $25 million in the aggregate to Teck and Westshore as a
reimbursement of, and contribution to, the expenses incurred by such parties
in connection with the Arrangement.                                                                                                                                                                                                                                                                             

The background to the Arrangement, the reasons why Old Fording chose to pursue
it and the details of such transaction are described in detail in the Third
Supplement.

30



---



##### 



Intercorporate Relationships

The following chart sets forth the corporate structure of the Trust, including
its interest in the Partnership, following the completion of the Arrangement.
The chart also sets out the interests of the Principal Unitholders in the
Trust, as well as the interests in the Trust of the former holders of Common
Shares of Old Fording following the completion of the Arrangement.

(ORG. CHART)

31



---



##### 





---

|Notes:
|------
|      
|(1)   
|      
|(2)   
|      
|(3)   
|      
|(4)   
|      
|(5)   
|      
|(6)   

The Trust

The Trust is an open-ended mutual fund trust existing under the laws of
Alberta. The Trust was established by the Declaration of Trust. The Trusts
head office is located at Suite 1000, 205-9th Avenue SE, Calgary, Alberta T2G
0R4.

A general description of certain terms of the Declaration of Trust is attached
at Appendix B to this Annual Information Form.

The Trust does not carry on any active business. The operations of the Fording
Group are conducted by New Fording and its subsidiaries and by the Partnership
and its subsidiaries.

Term of the Trust

The Trust has been established for an indefinite term subject to the rights of
the Unitholders to voluntarily terminate or wind up the Trust by special
resolution and subject to termination by the Trustees if no property is held by
the Trustees on behalf of the Trust.

Trustees and Officers of the Trust

The Trust is administered by the Trustees. The Declaration of Trust provides
that the Trust will have between seven and nine Trustees. All Trustees are to
be elected by the Unitholders. The Trustees are elected annually. No employee
of the Partnership may be a Trustee and a majority of the Trustees must be
Independent Trustees. For this purpose, the initial Chairman and Chief
Executive Officer, is
considered an Independent Trustee for his first term in office.

The following tables set forth the names of the Trustees and officers of the
Trust as of May 20, 2003 and their principal occupations. Each Trustee
has served in that capacity since February 2003. Trustees serve until the next
annual meeting of Unitholders.

32



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Trustees

|                            |  |                                                                    
|--------------------------- |  | -------------------------------------------------------------------
|Name                        |  | Present Principal Occupation                                       
|                            |  |                                                                    
|L.I. Barber, C.C            |  | Corporate Director                                                 
|M.A. Grandin(3)             |  | Chairman and Chief Executive Officer                               
|M. S. Parrett(1)(2)         |  | Independent Consultant                                             
|H.G. Schaefer, F.C.A.(1)(2) |  | Corporate Director                                                 
|W.W. Stinson                |  | Chairman of Westshore                                              
|P. Valentine, F.C.A.(2)     |  | Interim Vice President (Finance and Services) University of Calgary
|R.J. Wright, C.M., Q.C      |  | Deputy Chairman of Teck                                            
|J.B. Zaozirny, Q.C.(1)      |  | Lawyer                                                             



---

|Notes:
|------
|      
|(1)   
|      
|(2)   
|      
|(3)   

Officers

|                         |  |                                            
|------------------------ |  | -------------------------------------------
|Name                     |  | Present Principal Occupation with the Trust
|                         |  |                                            
|J.G. Gardiner            |  | President                                  
|M.A. Grandin             |  | Chairman and Chief Executive Officer       
|A.R. Hagerman, F.C.A.(1) |  | Chief Financial Officer                    
|J.F. Jones               |  | Secretary                                  
|K.E. Myers               |  | Treasurer                                  
|T. E. Pierce             |  | Controller                                 
|J.L. Popowich            |  | Executive Vice President                   



---

|Notes:
|------
|      
|(1)   

See Biographies of Trustees, Directors and Officers for a brief biography of
each of the Trustees and officers of the Trust which includes their
municipality of residence and a description of their principal occupation
during the last five years.

Committees of Trustees

Governance Committee

The Governance Committee of the Trust, comprised solely of Independent
Trustees, is a standing committee responsible for overseeing and assessing the
functioning of the Trustees and for the development, recommendation,
implementation and assessment of effective governance principles. The
Governance Committees responsibilities also include identifying and
recommending to the Trustees qualified trustee candidates for election at the
next annual meeting of Unitholders. In addition, the Governance Committee makes
recommendations to the Trustees on matters relating to Trustee and employee
remuneration and compensation. The Governance Committee will undertake on
behalf of the Trustees such other governance initiatives as may be necessary or
desirable to enable the Trustees to provide effective governance for the Trust
and contribute to the success of the Trust and enhance Unitholder value.

33



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Audit Committee

The Audit Committee of the Trust, comprised solely of Independent Trustees, is
a standing committee whose role is to assist the Trustees in fulfilling their
oversight responsibilities with respect to financial reporting. All members of
the Audit Committee must be financially literate and at least one member
must have accounting or related financial
expertise. The Audit Committee is responsible for: (i) overseeing the
integrity of the Trusts financial statements and financial reporting
processes, including the audit process and the Trusts internal accounting
controls and procedures, and compliance with related legal and regulatory
requirements; (ii) overseeing the qualifications and independence of the
external auditors; (iii) overseeing the work of the Trusts financial
management team, internal audit function and external auditors; and (iv)
providing an open avenue of communication between the external auditors, the
internal auditors, the Trustees, the directors of New Fording and the officers
of the Trust, New Fording and the Partnership.

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 New Fording.
The governance agreements provide each of Teck, Westshore and OTPP and Sherritt
(acting together) with the right to nominate one Trustee and one director of
New Fording as part of the slate of Trustees and directors to be put forward by
each of the Trust and New Fording for election by Unitholders. The right of a
Principal Unitholder to put forward a nominee to the Trust and New Fording
terminates unless the Principal Unitholder retains a certain minimum ownership
interest in the Trust. The nominee of OTPP and Sherritt must be an Independent
Director or an Independent Trustee, as the case may be. The balance of the
Trustees will be nominated for election by the Governance Committee of the
Trustees or the Governance Committee of the board of directors of New Fording,
as applicable.

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
New Fording. 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.

Mr. Michael Grandin has been appointed as the Chairman and Chief Executive
Officer of the Trust. Thereafter, the Chairman and Chief Executive Officer
will be 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 or any of its affiliates, or the 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 New
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.

Administrative Services Agreement

In connection with the Arrangement, the Partnership and the Trust entered into
an Administrative Services Agreement. The purpose of this agreement is to set
out the terms on which the Partnership will assist the Trustees and officers of
the Trust in its administration. Pursuant to the agreement, the Partnership
has agreed to supply officers of the Partnership to serve as officers of the
Trust under the direction of the Chief Executive Officer and the Trustees so as
to allow the Trust to function effectively. The Partnership has also agreed to
provide such administrative support services to the Trust as may be reasonably
requested by the Chief Executive Officer of the Trust. The Partnership is
compensated for providing such services on a cost recovery basis, including a
reasonable allocation of the employment costs of the persons providing
administrative services to the Trust and a reasonable allocation of overhead.
However, the Partnership is not entitled to recover the employment costs of
individuals provided to the Trust to serve as its officers unless such officers
are required to devote a significant amount of time to the management of the
Trust.

The Administrative Services Agreement may be terminated by the Trust on 90
days prior written notice or by either party in certain circumstances such as
insolvency or material breach. On termination, the Partnership is entitled to
reimbursement for any severance costs in connection with the termination of
persons whose principal duties

34



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involved providing services to the Trust, and to reimbursement of reasonable
costs attributable to the termination, but otherwise no termination fees are
payable.

Unitholder Rights Plan

As part of the Arrangement, the Trust adopted a unitholder rights plan (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 acquiror 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.

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.

New Fording

New Fording is a corporation existing under the CBCA. It is the successor, by
winding up, to Old FCL and Old Fording. New Fordings registered and executive
office is located at Suite 1000, 205-9th Avenue SE, Calgary, Alberta T2G 0R4.
New Fording is authorized to issue an unlimited number of New Fording Common
Shares, an unlimited number of New Fording Preferred Shares and an unlimited
number of New Fording Subordinated Notes.

35



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##### 



Directors and Officers of New Fording

The articles of New Fording provide that New Fording will have between seven
and nine directors. Pursuant to New Fordings by-laws, the initial number of
directors has been set at eight. The number of directors may be reduced in the
event that a Principal Unitholder loses its entitlement to nominate a director
pursuant to its governance agreement.

No director may be an employee of the Partnership, and a majority of the
directors must be Independent Directors. For this purpose, the initial Chairman
and Chief Executive Officer is
considered to be an Independent Director for his first term in office.
Further, until the annual meeting of New Fording to be held in 2004, no more
than 50% of the directors may also serve as Trustees, and thereafter a majority
of the directors must be persons who do not also serve as Trustees.

The following tables set forth the names of the directors and officers of New
Fording as of May 20, 2003 and their principal occupations. Each director
has served in that capacity since February 2003. Directors serve until the
next annual meeting of the shareholder of New Fording.

Directors

|                            |  |                                                                                   
|--------------------------- |  | ----------------------------------------------------------------------------------
|Name                        |  | Present Principal Occupation                                                      
|                            |  |                                                                                   
|M.A. Grandin(3)             |  | Chairman and Chief Executive Officer                                              
|N.B. Keevil                 |  | Chairman of Teck                                                                  
|R. T. Mahler(2)             |  | Executive Vice President and Chief Financial Officer of Finning International Inc.
|M. S. Parrett(1)(2)         |  | Independent Consultant                                                            
|R. Phillips, O.C.(1)        |  | Corporate Director                                                                
|H.G. Schaefer, F.C.A.(1)(2) |  | Corporate Director                                                                
|W.W. Stinson                |  | Chairman of Westshore                                                             
|D.A. Thompson               |  | Deputy Chairman and Chief Executive Officer of Teck                               



---

|Notes:
|------
|      
|(1)   
|      
|(2)   
|      
|(3)   

Officers

|                         |  |                                              
|------------------------ |  | ---------------------------------------------
|Name                     |  | Present Principal Occupation with New Fording
|                         |  |                                              
|G.E. Eberth              |  | Vice President  Marketing                   
|W.J. Foster              |  | Vice President  B.C. Operations             
|J.G. Gardiner            |  | President                                    
|M.A. Grandin             |  | Chairman and Chief Executive Officer         
|A.R. Hagerman, F.C.A.(1) |  | Chief Financial Officer                      
|J.F. Jones               |  | Corporate Secretary                          
|K.E. Myers               |  | Treasurer                                    
|R.H. Noonan              |  | Vice President  Employee Relations          
|T. E. Pierce             |  | Controller                                   
|J.L. Popowich            |  | Executive Vice President                     
|D.J. Shyluk              |  | Vice President  Projects & Development      
|J. Somers                |  | Vice President  NYCO Sales                  

36



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##### 





---

|Notes:
|------
|      
|(1)   

It is anticipated that the number of officers of New Fording will be reduced as
they become employees of the Partnership. See Subsequent Events  The Arrrangement  Human Resources  New Fording
 Impact of the Arrangement. See Biographies of Trustees, Directors and
Officers for a brief biography of each of the directors and officers of New
Fording, which includes their municipality of residence and a description of
their principal occupation during the last five years.

Committees of Directors

Governance Committee

The Governance Committee of New Fording, comprised solely of Independent
Directors, is a standing committee responsible for overseeing and assessing the
functioning of the board of directors and for the development, recommendation,
implementation and assessment of effective corporate governance principles. The
Governance Committees responsibilities also include identifying and
recommending to the board of directors qualified director candidates for
election as directors. In addition, the Governance Committee makes recommendations to the board of directors on
matters
relating to director and employee remuneration and compensation for New Fording
and its subsidiaries, other than the Partnership. The Governance Committee
will undertake on behalf of the board of directors such other corporate
governance initiatives as may be necessary or desirable to enable the board of
directors to provide effective corporate governance for New Fording and
contribute to the success of New Fording and enhance its value.

Audit Committee

The Audit Committee of New Fording, comprised solely of Independent Directors,
is a standing committee whose role is to assist the board of directors in
fulfilling its oversight responsibilities with respect to financial reporting.
All members of the Audit Committee must be financially literate and at least one member must have accounting or related
financial expertise. The Audit Committee is responsible for: (i) overseeing
the integrity of New Fordings financial statements and financial reporting
processes, including the audit process and New Fordings internal accounting
controls and procedures, and compliance with related legal and regulatory
requirements; (ii) overseeing the qualifications and independence of the
external auditors; (iii) overseeing the work of New Fordings financial
management team, internal audit function and external auditors; and (iv)
providing an open avenue of communication between the external auditors, the
internal auditors, the board of directors, the Trustees and the officers of the
Trust, New Fording and the Partnership.

Governance Arrangements

See Subsequent Events  The Arrangement  The Trust  Formation of the Trust  Governance Arrangements for a description of
the governance agreements entered into by the Trust and New Fording with each
Principal Unitholder.

Mr. Michael Grandin has been appointed as the Chairman and Chief Executive
Officer of New Fording. Thereafter, the Chairman and Chief Executive Officer
will be selected by the directors of New Fording from among the Independent
Directors. Any proposed officer of New Fording who is also a director, officer
or employee of Teck or any of its affiliates, or the Partnership, must be
approved by the Independent Directors.

Administrative and Industrial Minerals Services Agreement

In connection with the Arrangement, the Partnership and New Fording entered
into the Administrative and Industrial Minerals Services Agreement. The
purpose of this agreement is to set out the terms on which the Partnership will
assist the directors and officers of New Fording in its administration and in
the administration of the Industrial Minerals Operations.

Pursuant to the agreement, the Partnership has agreed to supply officers of the
Partnership to serve as officers of New Fording, under the direction of the
Chief Executive Officer and board of directors of New Fording, so as to

37



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allow New Fording to operate effectively. The Partnership has also agreed to
provide such administrative support services to New Fording as may be
reasonably requested by the Chief Executive Officer of New Fording.

Prior to the Arrangement, the Industrial Minerals Operations were operated by
Old FCL, with the support of administrative services provided by Old Fording.
As a result of the Arrangement, the Industrial Minerals Operations are operated
by New Fording. The Partnership has agreed, pursuant to the Administrative and
Industrial Minerals Services Agreement, to provide to New Fording in respect of
the Industrial Minerals Operations accounting, financial and tax services,
information services, geology, engineering and technical services and human
resources services.

The Partnership is compensated for providing such services on a cost recovery
basis, including a reasonable allocation of employment costs of the persons
providing administrative services to New Fording and a reasonable allocation of
overhead. However, the Partnership is not entitled to recover the employment
costs of individuals provided to New Fording to serve as its officers (other
than in connection with the Industrial Minerals Operations), unless such
officers are required to devote a significant amount of time to the management
of New Fording. To the extent that such officers are engaged in the
Industrial Minerals Operations, the Partnership is entitled to recover a
portion of the employment costs incurred in connection with such persons.

The agreement may be terminated by New Fording on 90 days prior written notice
or by either party in certain circumstances such as insolvency or material
breach. On termination, the Partnership is entitled to reimbursement for any
severance costs in connection with the termination of persons whose principal
duties involved providing services to New Fording, and to reimbursement of
other reasonable costs attributable to the termination, but otherwise no
termination fees are payable.

The Partnership

The Partnership is a general partnership formed under the laws of the Province
of Alberta. The Partners of the
Partnership are New Fording and Teck and Tecks affiliates, QCP and TBCI (Teck,
QCP and TBCI are referred to collectively as the Teck Partners).

The following table sets forth the names of the officers of the Partnership as
of February 28, 2003 and their present principal occupations.

Officers

|                         |  |                                                  
|------------------------ |  | -------------------------------------------------
|Name                     |  | Present Principal Occupation with the Partnership
|                         |  |                                                  
|J.G. Gardiner            |  | President and Chief Executive Officer            
|A.R. Hagerman, F.C.A.(1) |  | Chief Financial Officer                          



---

|Notes:
|------
|      
|(1)   

See Biographies of Trustees, Directors and Officers for a brief biography of
each of the officers of the Partnership which includes their municipality of
residence and a description of their principal occupation during the last five
years.

Summary of Partnership Agreement

The Partnership is operated pursuant to the terms of a partnership agreement
among the Partners dated February 28, 2003 (the Partnership Agreement). The
following is a summary of certain material terms of the Partnership Agreement.

38



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Management of the Partnership

Teck is the managing partner of the Partnership. As managing partner, Teck
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.

Teck can resign as managing partner on 60 days advance notice to the other
Partners. Further, Teck will be deemed to have resigned in certain
circumstances (insolvency, reduction in its interest below 20%, 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 Partnership are undertaken by officers and
other management personnel designated by the managing partner. The present
management is comprised substantially of the members of the Old FCL management
team as it existed immediately prior to the Arrangement.

Annual Budget Approval Process

The annual operation of the 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.

Teck, as 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
Partnership, any proposed merger, arrangement or reorganization of the
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. Following
completion of the Arrangement, the Distribution Entitlements of the Partners
were as follows:

|            |  |              |         |  
|----------- |  | ------------ | ------- | -
|            |  | Distribution
|Partner     |  | Entitlement 
|            |  |             
|New Fording |  |              | 65.000  | %
|Teck        |  |              | 34.833  | %
|QCP         |  |              | 0.164   | %
|TBCI        |  |              | 0.003   | %
|            |  |              |         |  
|Total       |  |              | 100.000 | %
|            |  |              |         |  

Tecks Distribution Entitlement can increase by a maximum of 5% (and New
Fordings Distribution Entitlement can proportionally decrease) to the extent
that the Partnership realizes certain synergies, without duplication, through
the

39



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combination of metallurgical coal assets contemplated by the Arrangement
referred to as Incremental Returns. The amount of Incremental Returns will be
determined at the end of each coal year during the four coal years of the
Partnership commencing in 2003 (i.e., April 1, 2003 to March 31, 2007). If
Incremental Returns are achieved in any such coal year, then Tecks
Distribution Entitlement will increase at the rate of 0.1% for every $1 million
of Incremental Return. Any increase in Tecks Distribution Entitlement will be
effective as at the end of the applicable coal year. Teck and New Fording are
presently working on a protocol to determine how Incremental Returns will be
measured during the applicable periods.

Reporting

The Partnership will report monthly to the Partners with respect to the
operational results and financial performance of the Partnership. In addition,
on a quarterly basis, Teck, in its capacity as managing partner, will report to
the board of directors of New Fording with respect to the operational results
and financial performance of the Partnership and such other matters as the
board may reasonably request.

The 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 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 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 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 one of the Teck Partners of its 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 Partnership

A significant component of the Arrangement was the consolidation in the
Partnership of the metallurgical coal assets of each of Old Fording, Teck and
the Luscar/CONSOL Joint Ventures. As a result, following completion of the
Arrangement, the assets of the Partnership are comprised primarily of the
Fording River mine, the Coal Mountain mine, the Greenhills mine, the Elkview
mine, the Line Creek mine, the Luscar mine, the undeveloped Cheviot project and
an approximately 46.4% interest in Neptune. The three mines comprising the
Mountain Operations (Fording River, Coal Mountain and Greenhills) are described
earlier in this document. This section will describe the additional assets
contributed to the Partnership as part of the Arrangement.

40



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(MAP)

Teck Contributed Assets

Teck provided to Fording the information set forth below concerning the Teck
Contributed Assets. Teck has represented the accuracy of this information to
Fording. Fording assumes no responsibility and expressly disclaims any
responsibility for the accuracy or completeness of such information, and for
any omission on the part of Teck or its affiliates to disclose publicly facts
or events that have occurred or may affect the accuracy of any such
information.

The Elkview Mine

The Elkview mine has a current annual design capacity of 6 million tonnes of
coal with an ability to expand to 7 million tonnes with additional capital
expenditures. In 2002, the Elkview mine produced approximately 5.5 million
tonnes of coal.

The property comprising the Elkview mine consists of eight coal licenses (which
have a 20-year life and are automatically renewable on a yearly basis) and fee
simple lands including coal rights and covers a surface area of approximately
23,000 hectares. The Elkview mine operates on a continuous basis, 24 hours a
day, 365 days a year, with approximately 690 personnel. The Elkview mine is
serviced by two-lane all weather roads. It has been operating on a nearly
continuous basis for over 30 years under a mining permit granted under the
Mines Act(British Columbia). Remediation and reclamation permits are in place
to permit all facets of the mining process. Additional permits will be required
in the future in respect of the location of additional dumps and tailings
impoundment areas that will have to be built as mining operations proceed.

41



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The mine proper and the associated fee simple lands at the Elkview mine cover a
portion of the Crowsnest coal field that runs from just north of the Elkview
property to 20 kilometres south of the Town of Fernie, British Columbia. The
mineral reserves associated with the Elkview mine lie in the Mist Mountain
formation of the Crowsnest coal field with the mine exploiting 16 coal seams in
the area of Baldy and Natal Ridge, just outside the Town of Sparwood, British
Columbia, bounded by Michel Creek to the south and the Elk River to the west.

Annual in-fill drilling programs are conducted to confirm and update the
geological model used to develop the yearly mine plans.

The coal produced at the Elkview mine is a high quality mid-volatile hard
coking coal. Lesser quantities of lower grade hard coking coal are also
produced and make up roughly 30% of the total production. The Elkview mine
uses conventional open pit truck/shovel mining methods and has developed a
40-year mine plan to develop its mineral reserves. The preparation plant,
which has capacity of 7 million tonnes of coal, is a conventional coal washing
plant using standard technology of cycloning and heavy media flotation.

Elkview Coal Reserves and Resources

Reserves and Resources as at December 31, 2002 have been estimated in
accordance with the National Instrument under the supervision of Mr. Carel van
Eendenburg, P. Eng., who is a qualified person for purposes of the National
Instrument. Mr. van Eendenburg was an employee of Teck at the time that the
following Reserve and Resource information was provided to Fording. The
estimates of coal Reserves and Resources set forth below incorporate
assumptions believed to be reasonable with respect to coal prices, mining
dilution, yields and operating costs, and are based upon parameters and
methodologies deemed appropriate by Mr. van Eendenburg. Reserves and resources
of coal at Elkview are expressed in tonnes of clean coal.

|                        |  |           |     |             |  |          |    |              |  |        |     |          |  |               |  |    |  |           |        |       |  |           |      |         |  |  |  | 
|----------------------- |  | --------- | --- | ----------- |  | -------- | -- | ------------ |  | ------ | --- | -------- |  | ------------- |  | -- |  | --------- | ------ | ----- |  | --------- | ---- | ------- |  |  |  | 
|COAL RESERVES          
|As At December 31, 2002
|(millions of tonnes)(1)
|                       
|                        |  |           |     |             |  |          |    |              |  |        |     |          |  |               |  |    |  |           |        |       |  | Calorific |      | Sulphur
|                        |  |           |     |             |  |          |    |              |  |        |     |          |  |               |  |    |  | Ownership |        | Value |  | Percent  
|Rank                    |  | Proven(3) |     | Probable(3) |  | Total(3) |    | Type of Coal |  | (%)(2) |     | kJ/kg(3) |  | (by wt.)(3)  
|                        |  |           |     |             |  |          |    |              |  |        |     |          |  |              
|Bituminous Coal         |  |           |     |             |  |          |    |              |  |        |     |          |  |               |  |    |  |           |        |       |  |           |      |         |  |  |  | 
|Elkview                 |  |           | 164 |             |  |          | 92 |              |  |        | 256 |          |  | Metallurgical |  | FS |  |           | 32,200 |       |  |           | 0.38 | %      



---

|Notes:
|------
|      
|(1)   
|      
|(2)   
|      
|(3)   

Had the Elkview 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.

42



---



##### 



|                        |  |             |    |              |  |          |   |              |  |        |    |          |  |               |  |    |  |           |        |       |  |           |      |         |  |  |  | 
|----------------------- |  | ----------- | -- | ------------ |  | -------- | - | ------------ |  | ------ | -- | -------- |  | ------------- |  | -- |  | --------- | ------ | ----- |  | --------- | ---- | ------- |  |  |  | 
|COAL RESOURCES         
|As At December 31, 2002
|(millions of tonnes)(1)
|                       
|                        |  |             |    |              |  |          |   |              |  |        |    |          |  |               |  |    |  |           |        |       |  | Calorific |      | Sulphur
|                        |  |             |    |              |  |          |   |              |  |        |    |          |  |               |  |    |  | Ownership |        | Value |  | Percent  
|Rank                    |  | Measured(3) |    | Indicated(3) |  | Total(3) |   | Type of Coal |  | (%)(2) |    | kJ/kg(3) |  | (by wt.)(3)  
|                        |  |             |    |              |  |          |   |              |  |        |    |          |  |              
|Bituminous Coal         |  |             |    |              |  |          |   |              |  |        |    |          |  |               |  |    |  |           |        |       |  |           |      |         |  |  |  | 
|Elkview                 |  |             | 30 |              |  |          |  |              |  |        | 30 |          |  | Metallurgical |  | FS |  |           | 32,200 |       |  |           | 0.38 | %      



---

|Notes:
|------
|      
|(1)   
|      
|(2)   
|      
|(3)   

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.

|                                                |         |                       |  |       | 
|----------------------------------------------- | ------- | --------------------- |  | ----- | 
|INFERRED COAL RESOURCES                        
|As At December 31, 2002 (millions of tonnes)(1)
|                                               
|Rank                                            |         | Inferred Resources(2)
|                                                |         |                      
|Bituminous Coal  Metallurgical                 |         |                       |  |      
|                                                | Elkview |                       |  | 1,305 | 



---

|Notes:
|------
|      
|(1)   
|      
|(2)   

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 minable. 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, Fording has referred to Inferred Resources
as non-reserves.

The coal Reserves, Resources and Inferred Resources for the Elkview Mine are based upon
historical data provided to the Trust by Teck. The Trust has not independently verified this data.

Luscar Contributed Assets

Sherritt and OTPP have caused Luscar to provide to Fording the information set
forth below concerning the Luscar Contributed Assets. Sherritt and OTPP have
represented the accuracy of this information to Fording. Fording assumes no
responsibility and expressly disclaims any responsibility for the accuracy or
completeness of such information, and for any omission on the part of Sherritt,
OTPP or Luscar or their respective affiliates to disclose publicly facts or
events that have occurred or may affect the accuracy of any such information.

Line Creek

The Line Creek mine is located approximately 22 kilometres north of Sparwood,
British Columbia, and is adjacent to the Greenhills mine and in close proximity
to the Fording River mine. The Line Creek mine is designed to operate 24 hours
per day, seven days a week and is serviced by two-lane all weather roads. The
Line Creek mine supplies bituminous metallurgical and thermal coal to a variety
of international and domestic steel producers and

43



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##### 



Pacific Rim electric utilities. Operations at Line Creek commenced in 1981. In
2002, the Line Creek mine produced 2.4 million tonnes of metallurgical coal and
0.5 million tonnes of thermal coal. The mines current annual production
capacity is 3.8 million tonnes.

The bituminous metallurgical and thermal coal at the Line Creek mine are mined
from several seams lying in a syncline. The seams average one to 12 metres in
thickness, with the thickest seam reaching 15 metres in several places.

On March 10, 2003 Fording and Teck announced that the Partnership will
implement changes to the mining plan for the Line Creek mine to reduce annual
production to approximately 2 million tonnes from its previously planned level of
3.5 million tonnes, and that as a consequence the workforce of 544 employees
will be reduced by about 50 percent.

Luscar

The Luscar mine is located approximately 42 kilometres south of Hinton,
Alberta. The Luscar mine is designed to operate 24 hours per day, seven days a
week and is serviced by two-lane all weather roads. It supplies metallurgical
coal to a variety of international steel producers. The Luscar mine commenced
operations in 1970. In 2002, the Luscar mine produced 2.1 million tonnes of
metallurgical coal.

The bituminous metallurgical coal at the Luscar mine is mined from a seam which
has an average thickness of 10 to 12 metres, although in some areas folding and
faulting has produced sections of coal up to 40 metres thick.

On April 12, 2003 Fording and Teck announced that the Partnership will proceed
with the shut down of the Luscar mine due to the depletion of coal reserves at
the mine. The Luscar mine is scheduled to close in early 2004. Employee
severance costs as well as reclamation obligations for mining activities prior
to March 1, 2003 are the responsibility of the Luscar/CONSOL Joint Ventures.

Cheviot Mine Project

The Cheviot mine project is located in northwest Alberta near the Luscar mine.

In December 2000, the Government of Alberta approved and issued the mine permit
for the Cheviot project at a design capacity of 3.2 million tonnes per year.
This approval contemplated the construction of a processing plant, maintenance
and administration facilities, a public access road, railway access and other
infrastructure requirements. In April 2001, the Government of Canada announced
its acceptance of the recommendation by the joint federal and provincial review
panel in favour of the development of Cheviot, which allows the federal
government to issue the regulatory authorizations required for the project to
proceed. The Government of Alberta recently approved the permit application
for the Cheviot haul road.

On April 2, 2003 Fording and Teck announced that the Partnership would not
begin development of the Cheviot mine project until additional supply of
metallurgical coal is warranted by world coal markets.

Neptune Terminals

The Partnership holds a 46.4% interest in Neptune, the corporation
that owns Neptune Terminals. Neptunes shareholder agreement requires that its
shareholders guarantee the outstanding bank indebtedness of Neptune. As of February 28, 2003, the Partnerships proportionate interest in this guarantee was approximately
$20 million and the Trusts proportionate interest in this guarantee was
approximately $13 million.

Neptune Terminals is a multi-product bulk handling port facility located
at Vancouver, British Columbia, which is owned by its users. Neptune Terminals
has a long-term lease which expires in 2014 with the Vancouver Port Authority
and is currently finalizing an extension to this lease. Shippers can access
the Neptune Terminals facilities from the Canadian National rail system and,
through interconnection, with the Canadian Pacific rail system, both of which
are the exclusive rail shippers for coal producers in Alberta and the Elk
Valley, respectively.

44



---



##### 



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.

Line Creek, Luscar and Cheviot Reserves and Resources

The coal reserves for the Line Creek mine, the Luscar mine and the Cheviot mine
project listed below, are classified as bituminous coal with a heat value that
ranges from 26,000  33,000 kJ/kg (10,500 to 14,000 BTU/lb). The moisture
content of bituminous coal is generally less than 15% by weight.

Coal that is less than 1% sulphur by weight is referred to as low-sulphur coal.
On average, all of the coal reserves for the Line Creek mine, the Luscar mine and
the Cheviot mine project meets this criterion.

Reserves and Resources for the Line Creek mine, Luscar mine and the Cheviot
project as at December 31, 2002 have been estimated in accordance with the
National Instrument under the supervision of Mr. Gary Johnston, Professional
Geologist, who is a qualified person for purposes of the National Instrument.
Mr. Johnston was an employee of Luscar at the time that the following Reserve
and Resource information was provided to Fording. The estimates of coal
Reserves and Resources set forth below incorporate assumptions believed to be
reasonable with respect to coal prices, mining dilution, yields and operating
costs, and are based upon parameters and methodologies deemed appropriate by
the above-noted person.

|                        |            |           |    |             |  |          |    |              |  |        |     |          |  |             |               |  |      |   |           |       |       |  |         |        |  |        |           |      |         |      |   |  | 
|----------------------- | ---------- | --------- | -- | ----------- |  | -------- | -- | ------------ |  | ------ | --- | -------- |  | ----------- | ------------- |  | ---- | - | --------- | ----- | ----- |  | ------- | ------ |  | ------ | --------- | ---- | ------- | ---- | - |  | 
|COAL RESERVES          
|As At December 31, 2002
|(millions of tonnes)(1)
|                       
|                        |            |           |    |             |  |          |    |              |  |        |     |          |  |             |               |  |      |   |           |       |       |  |         |        |  |        | Calorific |      | Sulphur
|                        |            |           |    |             |  |          |    |              |  |        |     |          |  |             |               |  |      |   | Ownership |       | Value |  | Percent
|Rank                    |            | Proven(3) |    | Probable(3) |  | Total(3) |    | Type of Coal |  | (%)(2) |     | kJ/kg(3) |  | (by wt.)(3)
|                        |            |           |    |             |  |          |    |              |  |        |     |          |  |            
|Bituminous Coal         |            |           |    |             |  |          |    |              |  |        |     |          |  |             |               |  |      |   |           |       |       |  |         |        |  |        |           |      |         |      |   | 
|                        | Line Creek |           |    | 37          |  |          |    |             |  |        |     | 37       |  |             | Metallurgical |  |      | L |           |       |       |  |         |        |  | 32,200 |           |      |         | 0.46 | %
|                        | Luscar     |           |    | 1           |  |          |    |             |  |        |     | 1        |  |             | Metallurgical |  | FS/L |   |           | 4/96  |       |  |         | 32,700 |  |        |           | 0.30 | %      
|                        | Cheviot    |           |    | 36          |  |          |    | 26           |  |        |     | 62       |  |             | Metallurgical |  | FS/L |   |           | 12/88 |       |  |         | 32,700 |  |        |           | 0.38 | %      
|                        |            |           |    |             |  |          |    |              |  |        |     |          |  |             |               |  |      |   |           |       |       |  |         |        |  |        |           |      |         |      |   | 
|Total                   |            |           | 74 |             |  |          | 26 |              |  |        | 100 |          |  |             |               |  |      |   |           |       |       |  |         |        |  |        |           |      |         |      |   | 
|                        |            |           |    |             |  |          |    |              |  |        |     |          |  |             |               |  |      |   |           |       |       |  |         |        |  |        |           |      |         |      |   | 
|Bituminous Coal         |            |           |    |             |  |          |    |              |  |        |     |          |  |             |               |  |      |   |           |       |       |  |         |        |  |        |           |      |         |      |   | 
|                        | Line Creek |           |    | 3           |  |          |    |             |  |        |     | 3        |  |             | Thermal       |  |      | L |           |       |       |  |         |        |  | 26,500 |           |      |         | 0.35 | %
|                        |            |           |    |             |  |          |    |              |  |        |     |          |  |             |               |  |      |   |           |       |       |  |         |        |  |        |           |      |         |      |   | 
|Total                   |            |           | 3  |             |  |          |   |              |  |        | 3   |          |  |             |               |  |      |   |           |       |       |  |         |        |  |        |           |      |         |      |   | 
|                        |            |           |    |             |  |          |    |              |  |        |     |          |  |             |               |  |      |   |           |       |       |  |         |        |  |        |           |      |         |      |   | 



---

|Notes:
|------
|      
|(1)   
|      
|(2)   
|      
|(3)   

Had the above 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.

45



---



##### 



|                        |            |             |    |              |  |          |     |              |  |              |     |          |  |             |               |  |      |  |  |       |  |   |  |        |  |        |           |      |         |      |   |  | 
|----------------------- | ---------- | ----------- | -- | ------------ |  | -------- | --- | ------------ |  | ------------ | --- | -------- |  | ----------- | ------------- |  | ---- |  |  | ----- |  | - |  | ------ |  | ------ | --------- | ---- | ------- | ---- | - |  | 
|COAL RESOURCES         
|As At December 31, 2002
|(millions of tonnes)(1)
|                       
|                        |            |             |    |              |  |          |     |              |  |              |     |          |  |             |               |  |      |  |  |       |  |   |  |        |  |        | Calorific |      | Sulphur
|                        |            |             |    |              |  |          |     |              |  |              |     |          |  |             |               |  |      |  |  |       |  |   |  |        |  |        | Value     |      | Percent
|Rank                    |            | Measured(3) |    | Indicated(3) |  | Total(3) |     | Type of Coal |  | Ownership(2) |     | kJ/kg(3) |  | (by wt.)(3)
|                        |            |             |    |              |  |          |     |              |  |              |     |          |  |            
|Bituminous Coal         |            |             |    |              |  |          |     |              |  |              |     |          |  |             |               |  |      |  |  |       |  |   |  |        |  |        |           |      |         |      |   | 
|                        | Line Creek |             |    | 21           |  |          |     | 154          |  |              |     | 175      |  |             | Metallurgical |  |      |  |  |       |  | L |  |        |  | 32,200 |           |      |         | 0.46 | %
|                        | Cheviot    |             |    |             |  |          |     | 4            |  |              |     | 4        |  |             | Metallurgical |  | FS/L |  |  | 12/88 |  |   |  | 32,700 |  |        |           | 0.38 | %      
|                        | Luscar     |             |    | 2            |  |          |     | 3            |  |              |     | 5        |  |             | Metallurgical |  | FS/L |  |  | 4/96  |  |   |  | 32,700 |  |        |           | 0.30 | %      
|                        |            |             |    |              |  |          |     |              |  |              |     |          |  |             |               |  |      |  |  |       |  |   |  |        |  |        |           |      |         |      |   | 
|Total                   |            |             | 23 |              |  |          | 161 |              |  |              | 184 |          |  |             |               |  |      |  |  |       |  |   |  |        |  |        |           |      |         |      |   | 
|                        |            |             |    |              |  |          |     |              |  |              |     |          |  |             |               |  |      |  |  |       |  |   |  |        |  |        |           |      |         |      |   | 
|Bituminous Coal         |            |             |    |              |  |          |     |              |  |              |     |          |  |             |               |  |      |  |  |       |  |   |  |        |  |        |           |      |         |      |   | 
|                        | Line Creek |             |    | 3            |  |          |     | 24           |  |              |     | 27       |  |             | Thermal       |  |      |  |  |       |  | L |  |        |  | 26,500 |           |      |         | 0.35 | %
|                        |            |             |    |              |  |          |     |              |  |              |     |          |  |             |               |  |      |  |  |       |  |   |  |        |  |        |           |      |         |      |   | 
|Total                   |            |             | 3  |              |  |          | 24  |              |  |              | 27  |          |  |             |               |  |      |  |  |       |  |   |  |        |  |        |           |      |         |      |   | 
|                        |            |             |    |              |  |          |     |              |  |              |     |          |  |             |               |  |      |  |  |       |  |   |  |        |  |        |           |      |         |      |   | 



---

|Notes:
|------
|      
|(1)   
|      
|(2)   
|      
|(3)   

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.

|                                                |            |                       |  |     | 
|----------------------------------------------- | ---------- | --------------------- |  | --- | 
|INFERRED COAL RESOURCES                        
|As At December 31, 2002 (millions of tonnes)(1)
|                                               
|Rank                                            |            | Inferred Resources(2)
|                                                |            |                      
|Bituminous Coal -Metallurgical                  |            |                       |  |    
|                                                | Line Creek |                       |  | 110 | 
|Bituminous Coal  Thermal                       |            |                       |  |    
|                                                | Line Creek |                       |  | 10  | 



---

|Notes:
|------
|      
|(1)   
|      
|(2)   

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, Fording has referred to Inferred
Resources as non-reserves.

The Coal Reserves, Resources and Inferred Resources for the Line Creek, Luscar
and Cheviot mines are based upon historical data provided to the Trust by
Luscar. The Trust has not independently verified this data.

46



---



##### 



Human Resources

New Fording

Impact of the Arrangement

Pursuant to the Arrangement, all of the employees (i.e., both executives and
the unionized and non-unionized workforce, but excluding Prairie Operations
employees) previously employed by Old FCL and Old Fording became employees of
New Fording. Pursuant to the terms of a human resources agreement dated
February 28, 2003 among New Fording, Teck, the Partnership, the
Partnerships wholly-owned subsidiary, and Elk Valley
Coal Corporation (the Human Resources Agreement), all of the New Fording
employees, other than 12 employees (the Excluded Employees) have been
seconded to the Partnership. The secondment of the New Fording employees began
on February 28, 2003 and is expected to continue until the end of 2003.
Although not seconded to the Partnership, the Excluded Employees provide
services to the Partnership.

Following completion of the Arrangement, substantially all of the Line Creek
mine and Luscar mine employees became employees of New Fording. Pursuant to
the Human Resources Agreement, these former Line Creek/Luscar employees have
also been seconded to the Partnership on the same terms as described above.
The Line Creek mine and the Luscar mine are unionized operations and
collectively employ approximately 800 employees. The Line Creek collective
agreement expires on May 31, 2005 and the Luscar collective agreement expires
on June 30, 2007. On April 2, 2003, Fording and Teck announced that the
Partnership will close the Luscar mine by April 2004. The 290 employees at the
Luscar operation will be phased out as mining is completed. Initial reductions
affecting 190 employees began in May 2003.

New Fording is reimbursed by the Partnership for all of the employment costs of
the employees that have been seconded to the Partnership pursuant to the terms
of the Human Resources Agreement. The Partnership is also responsible for
reimbursing New Fording for the employment costs of the Excluded Employees plus
5% of the base salary of the Excluded Employees.

Substantially all of the New Fording employees will become employees of the
Partnership or a subsidiary of the Partnership at the end of their
current period of secondment.

Current New Fording Employment Practices

As set forth above, upon completion of the Arrangement, New Fording became the
employer of all of the former employees of Old Fording and Old FCL (other than
the Prairie Operations work force), as well as the substantial majority of the
Line Creek and Luscar employees. New Fording is bound, as successor employer,
by the terms of the collective agreements that cover the unionized employees
of Old Fording and Luscar. New Fording provides non-union employees with
comprehensive wage and benefit coverages which are competitive relative to
their industry and geographic locations.

Substantially all of New Fordings employees participate in either a defined
benefit pension plan or a defined contribution pension plan. In addition, New
Fording sponsors a Group RRSP in connection with the employees transferred from
the Luscar/CONSOL Joint Ventures.

New
Fording executives receive a base salary and will be entitled to participate in
both a short term and medium term incentive plan once those plans are
finalized. A compensation scheme to replace the

47



---



##### 



value previously provided by Old Fordings Key Employee Stock Option Plan is
also being considered as well as a program to compensate senior management for
the early termination of the Old Fording deferred share unit plan that occurred
as part of the Arrangement.

Senior management also participate in a registered defined benefit pension plan
and an unregistered employer-paid supplemental pension plan that pays pensions
in excess of the maximum amounts that the Income Tax Act(Canada) permits
registered pension plans to pay.

The compensation policies applicable to New Fordings employees may be changed
from New Fordings current and planned compensation arrangements either during
the period of secondment or once those employees become employees of the
Partnership. See Subsequent Events  The Arrangement  Human Resources  Impact of the Arrangement. Any changes
to the form and content of executive compensation will be determined by the
managing partner of the Partnership subject to the general consent of New
Fording as part of the approval of the annual operating budget and subject to
the terms of the Combination Agreement. In that regard, the Combination
Agreement provides that former Fording employees, while employed by New Fording
or the Partnership, will be provided with compensation arrangements until the
third anniversary of the Effective Date which are, in the opinion of the
directors of New Fording who were directors of Old Fording, no less favourable,
in the aggregate, than the compensation arrangements that were in place prior
to the Arrangement.

Change in Control Agreements

In connection with becoming a public company, Old Fording entered into change
in control agreements with certain members of senior management, including the
president and vice-presidents. As part of the Arrangement, New Fording assumed
all of the obligations under the change in control agreements. The change in
control agreements provide for the payment of certain severance benefits if (a)
a change in control of New Fording occurs, and (b) within a three-year period
following the change in control, the individuals employment is terminated by
New Fording other than for cause, retirement or death, or by the individual for
certain reasons defined as good reason, such as a change in responsibilities
or a reduction in salary or benefits. In such event, the individual will
receive a lump sum change in control payment equal to the compensation that
would have been earned through the end of either a 24 or 36 month severance
period, depending on the individual. In addition to the lump sum severance
payment, the change in control agreements provide that the individual is
entitled to certain benefits, including
payment under New Fordings compensation plans and continuation of certain
insurance plan benefits, for the duration of the severance period. Under these
agreements, a change in control is defined to include: (i) the acquisition by
a person, or by persons acting jointly, of 20% of the outstanding voting shares
of New Fording; (ii) New Fording disposing of all or substantially all of its
assets; or (iii) the board of directors of New Fording determining that a
change in control has occurred.

The Arrangement constituted a change in control for the purposes of the
agreements summarized above. In addition, the contribution of the Fording
Contributed Assets to the Partnership in connection with the Arrangement
constitutes good reason for the purposes of these agreements. Accordingly,
an individual party to one of the change in control agreements would be
entitled to the severance benefits discussed in the preceding paragraph if they
chose to exercise such rights.

Pursuant to the terms of the Human Resources Agreement, the Partnership is
required to reimburse New Fording for any change in control costs it may incur.
In addition, the Partnership is required to reimburse New Fording for all of
the costs of administering the change in control agreements and obtaining
letters of credit to secure the obligations under the change in control
agreements. The Partnership or a corporation wholly-owned by the Partnership
is required to assume the change in control agreements in respect of all New
Fording employees with change in control agreements who are employed by the
Partnership at the end of their current period of secondment.

The Partnership

In connection with the Arrangement, the Partnership acquired from Teck all of
the issued and outstanding shares of Elkview Coal Corporation (ECC), which
employs the Elkview mine employees. The Elkview mine is unionized and employs
approximately 700 employees. The collective agreement expires on October 31,
2005. The majority of the ECC workforce is unionized and are, therefore,
provided with wages and benefits in accordance with the applicable collective
agreement. Non-union ECC employees are provided with comprehensive wage and
benefit

48



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##### 



coverages which are competitive relative to their industry and geographic
location. Substantially all of ECC unionized employees participate in a defined
contribution pension plan. The non-unionized employees participate in a defined
contribution pension plan.

Prairie Operations

The employees of the Prairie Operations became part of the Luscar
organization on the sale of the Prairies Operations by Old Fording and the Fording Group has no further obligations
with respect to such employees.

The Trust

The Trust does not employ any employees directly other than its officers.
Pursuant to the terms of the Administrative Services Agreement, the Partnership
has agreed to supply officers of the Partnership to serve as officers of the
Trust for which the Partnership is compensated on a cost recovery basis,
including a reasonable allocation of employment costs of personnel relating to
the provision of administrative services to the Trust and a reasonable
allocation of overhead. See Subsequent Events  The Arrangement  The Trust
 Administrative Services Agreements.

49



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##### 



SELECTED CONSOLIDATED FINANCIAL INFORMATION

Summary Selected Historical Financial Information

The following table contains selected consolidated financial information for
Fording for the periods indicated.

|                         |                                   |      |   |       |   |      |   |        |   |  |   |        |  
|------------------------ | --------------------------------- | ---- | - | ----- | - | ---- | - | ------ | - |  | - | ------ | -
|As at December 31        |                                   | 2002 |   | 2001  |   | 2000
|                         |                                   |      |   |       |   |     
|Statement of Income Data |                                   |      |   |       |   |      |   |        |   |  |   |       
|                         | Revenues:                         |      |   |       |   |      |   |        |   |  |   |        |  
|                         | Mountain Operations               |      | $ | 767.8 |   |      | $ | 872.6  |   |  | $ | 755.9  |  
|                         | Prairie Operations                |      |   | 66.9  |   |      |   | 80.2   |   |  |   | 84.7   |  
|                         | Industrial Minerals Operations    |      |   | 47.5  |   |      |   | 47.6   |   |  |   | 55.5   |  
|                         |                                   |      |   |       |   |      |   |        |   |  |   |       
|                         | Total revenue                     |      | $ | 882.2 |   |      | $ | 1000.4 |   |  | $ | 896.1  |  
|                         |                                   |      |   |       |   |      |   |        |   |  |   |       
|                         | Income from operations            |      | $ | 146.0 |   |      | $ | 176.4  |   |  | $ | 85.5   |  
|                         | Net income (loss)(1)              |      | $ | (70.9 | ) |      | $ | 94.6   |   |  | $ | 34.6   |  
|                         | Basic (loss) earnings per share   |      | $ | (1.38 | ) |      | $ | 1.80   |   |  | $ | .066   |  
|                         |                                   |      |   |       |   |      |   |        |   |  |   |       
|                         | Diluted (loss) earnings per share |      | $ | (1.38 | ) |      | $ | 1.80   |   |  | $ | 0.66   |  
|                        
|Cash Flow Statement Data |                                   |      |   |       |   |      |   |        |   |  |   |       
|                         | Net cash provided by (used in):   |      |   |       |   |      |   |        |   |  |   |        |  
|                         | Operating activities              |      | $ | 140.3 |   |      | $ | 158.5  |   |  | $ | 137.5  |  
|                         | Investing activities              |      | $ | (50.7 | ) |      | $ | (58.5  | ) |  | $ | (37.3  | )
|                         | Financing activities              |      | $ | (54.8 | ) |      | $ | (68.6  | ) |  | $ | (110.0 | )
|                         |                                   |      |   |       |   |      |   |        |   |  |   |       
|Balance Sheet Data       |                                   |      |   |       |   |      |   |        |   |  |   |       
|                         | Current assets                    |      | $ | 254.5 |   |      | $ | 221.7  |   |  | $ | 183.0  |  
|                         | Current liabilities               |      |   | 92.8  |   |      |   | 81.1   |   |  |   | 83.3   |  
|                         |                                   |      |   |       |   |      |   |        |   |  |   |       
|                         | Working capital                   |      | $ | 161.7 |   |      | $ | 140.6  |   |  | $ | 99.7   |  
|                         |                                   |      |   |       |   |      |   |        |   |  |   |       
|                         | Total assets                      |      | $ | 909.4 |   |      | $ | 1040.3 |   |  | $ | 994.7  |  
|                         |                                   |      |   |       |   |      |   |        |   |  |   |       
|                         | Capitalization                    |      |   |       |   |      |   |        |   |  |   |        |  
|                         | Total debt                        |      | $ | 143.1 |   |      | $ | 131.9  |   |  | $ | 154.4  |  
|                         | Shareholders equity              |      |   | 448.7 |   |      |   | 588.2  |   |  |   | 525.5  |  
|                         |                                   |      |   |       |   |      |   |        |   |  |   |       
|                         | Total capitalization              |      | $ | 591.8 |   |      | $ | 720.1  |   |  | $ | 679.9  |  
|                         |                                   |      |   |       |   |      |   |        |   |  |   |       



---

|(1) |  | Following completion of the most recent fiscal year, Old Fording updated
its assessment of the recoverability of its investment in assets related to the
Pilares operation. 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.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

DISTRIBUTION POLICIES

The Trust

It is the policy of the Trust to distribute the Trust 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 available cash to make the full amount of any distribution,
the payment of such distribution may be made in Units.

Unitholders will receive special distributions totalling $70 million, payable
in two instalments, in addition to the regular distributions of the Trust.
Unitholders of record at the end of the first quarter of 2003 received the first installment of the
special distribution in the amount of $0.74 per Unit on April 15, 2003. The second
instalment of the special distribution will be paid to Unitholders of record at
the end of the second quarter of 2003 and will be approximately $0.74 per Unit.

50



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New Fording

New Fording distributes its available cash to the Trust, subject to compliance
with legal and contractual obligations, by way of interest on the subordinated
notes, redemptions of New Fording Preferred Shares, dividends or other
distributions on its shares and principal repayments on the subordinated notes.
Available cash is determined after provision for cash reserves which includes
the proportionate share of cash reserves at the Partnership level.

The Partnership

The Partnership makes monthly distributions of Partnership Distributable Cash
to the Partners in proportion to their respective Distribution Entitlements.
The Partnerships distribution policy cannot be changed unless approved by
Special Resolution of Partners.

Distribution/Dividend History

On March 18, 2003 the Trust declared its first quarterly distribution of $1.00
per Unit, inclusive of the first instalment of the special distribution in the
amount $0.74 per Unit announced as part of the Arrangement, which was paid on
April 15, 2003.

The following dividends were paid by Old Fording on a per Common Share basis in
2001 and 2002:

|                   |  |   |       | 
|------------------ |  | - | ----- | 
|December 17, 2001  |  | $ | 0.125 | 
|March 15, 2002     |  | $ | 0.125 | 
|June 17, 2002      |  | $ | 0.125 | 
|September 16, 2002 |  | $ | 0.150 | 
|December 16, 2002  |  | $ | 0.150 | 

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Managements Discussion and Analysis of Financial Condition and Results of
Operations for the year ended December 31, 2002 is included in Fordings 2002
Annual Report and is incorporated by reference into this annual information
form.

MARKETS FOR SECURITIES

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

BIOGRAPHIES OF TRUSTEES, DIRECTORS AND OFFICERS

The following is a brief biography of each of the trustees, directors and
officers of the Trust, New Fording and the Partnership, including their
municipality of residence and a description of their principal occupation
during the last five years. As a group, the individuals listed below
(excluding R. Millos) owned directly or indirectly, or exercised control or
direction over 31,243 Units as at February 28, 2003 representing less than 1%
of the outstanding Units.

L.I. Barber, C.C.(Trustee)
(Regina Beach, Saskatchewan)

Dr. Lloyd Barber is currently 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 is a Director of Teck Cominco Limited, the
Bank of Nova Scotia, CanWest Global Communications Corp., Molson Inc. and
Greystone Capital Management. Dr. Barber is a Companion of the Order of Canada.

51



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G.E. Eberth(Officer)
(Calgary, Alberta)

Gordon Eberth is currently Vice President of Marketing of New Fording, the same
position he held with Old Fording since October 2001. Prior to assuming this
position, he was Director of Marketing of a predecessor of Old Fording from
1996 to 2001 and Manager of Marketing of the European/Mediterranean area from
1991 to 1996. Mr. Eberth spent the previous ten years with Canadian Pacific
Railway Limited in various marketing positions across Canada. He graduated
with a Bachelor of Arts cum laudefrom Concordia University. Mr. Eberth has
more than 12 years of service with the Fording Group and its predecessors.

W.J. Foster(Officer)
(Elkford, British Columbia)

William Foster is currently Vice President of British Columbia Operations of
New Fording, the same position that he held with Old Fording since 2001. Prior
to assuming the position of Vice President, he was General Manager of Fording
River Operations of a predecessor of Old Fording from 1991 to 2001. Mr. Foster
holds a Bachelor of Science from Memorial University and a Bachelor of
Engineering from the Technical University of Nova Scotia. He is the past
Chairman of the Mining Association of British Columbia and a member of the
Association of Professional Engineers, Geologists and Geophysicists of Alberta
and the Association of Professional Engineers and Geoscientists of the Province
of British Columbia. He is also a member of the Canadian Institute of Mining,
Metallurgy and Petroleum. Mr. Foster has more than 15 years of service with
the Fording Group and its predecessors.

J.G. Gardiner(Officer)
(Calgary, Alberta)

Jim Gardiner is currently the President of both the Trust and New Fording, and
is also the President and Chief Executive Officer of the Partnership. From
1993 to 2003, he was President and Chief Executive Officer of Old Fording and
its predecessor. He is the past Chairman of the Coal Industry Advisory Board
of the International Energy Agency, a past member the Sectoral Advisory Group
on International Trade (SAGIT), Energy, Chemical and Plastics Division, the
past Chairman of the Coal Association of Canada and past Deputy Chairman of the
World Coal Institute. Mr. Gardiner holds a Bachelor of Science in Civil
Engineering from the University of Saskatchewan. He is a member of the
Association of Professional Engineers, Geologists and Geophysicists of Alberta,
the Canadian Institute of Mining, Metallurgy and Petroleum and the Canadian
Council of Chief Executives. Mr. Gardiner has over 31 years of service with
the Fording Group and its predecessors, and served as a Director of Old Fording
and its predecessor from 1990 to 2003.

M.A. Grandin(Trustee, director and
officer) (Calgary, Alberta)

Michael Grandin is currently the Chairman and Chief Executive Officer of the
Trust and New Fording. From October 2001 to April 2002, Mr. Grandin was
President of PanCanadian Energy Corporation. From 1998 to 2001, Mr. Grandin
was Executive Vice President and Chief Financial Officer of Canadian Pacific
Limited. He was Vice Chairman and a Director of Midland Walwyn Capital Inc.
from 1996 to 1998. He is a Director of Encana Corporation which was formed
through the merger of PanCanadian Energy Corporation and Alberta Energy Company
Ltd. in 2002. He is also a Director of IPSCO Inc., Enerflex Systems Ltd.,
Pengrowth Corporation and BNS Split Corp. Mr. Grandin was a Director of Old
Fording from October 2001 through to the effective date of the Arrangement.

A.R. Hagerman, F.C.A.(Officer)
(Calgary, Alberta)

Allen Hagerman is currently the Chief Financial Officer of the Trust, New
Fording and the Partnership. From 2001 through to the effective date of the
Arrangement, he served as Vice President and Chief Financial Officer of Old
Fording. Mr. Hagerman was Vice President, Finance and Accounting of a
predecessor of Old Fording from 1996 to 2001. Mr. Hagerman holds a Masters of
Business Administration from Harvard University, a Bachelor of Commerce from
the University of Alberta, and is a member of both the Alberta Institute of
Chartered Accountants

52



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and the Canadian Institute of Chartered Accountants. He is a member of the
Investment Committee of the University of Calgary and a member of the Pension
Committee and the Audit and Finance Committee of the Calgary Exhibition and
Stampede. He is past Chairman of the Alberta Childrens Hospital Foundation
and a Director of TransCanada Power, L.P. Mr. Hagerman has been with the
Fording Group and its predecessors for more than seven years. Mr. Hagerman has
announced that he will be resigning as Chief Financial Officer of each of the
Trust, New Fording and the Partnership effective May 31, 2003.

J.F. Jones(Officer)
(Calgary, Alberta)

Jim Jones is currently the Secretary of the Trust and the Corporate Secretary
of New Fording. From 2001 through to the effective date of the Arrangement,
Mr. Jones served as Corporate Secretary of Old Fording. Prior to assuming the
position of Corporate Secretary, he was Manager, Employee Relations and
Regulatory Affairs of a predecessor of Old Fording from 1993 to 2001. He is a
graduate of the University of Saskatchewan and has a law degree from the
University of Victoria. He is a member of the Law Society of British Columbia
and the Canadian Bar Association. He is also a Director of the Calgary Society
of Christian Education. Mr.
Jones has more than 16 years of service with the Fording Group and its
predecessors.

N.B. Keevil(Director)
(West Vancouver, British Columbia)

Dr. Norman Keevil is currently Chairman of the Board of Teck, a position he has
held since 2001. From 1981 to 2001, he was President and Chief Executive
Officer of Teck Corporation, also serving as its 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 received the Selwyn G. Blaylock Medal for
1991 from the Canadian Institute of Mining and Metallurgy.

R. T. Mahler(Director)
(Vancouver, British Columbia)

Richard Mahler is currently the Executive Vice President and Chief Financial
Officer of Finning International Inc. (Finning), a position he has held since
1990. Finning is the worlds largest Caterpillar dealer which sells, rents,
finances and provides customer support services for Caterpillar and
complementary equipment in Western Canada, the United Kingdom, Chile,
Argentina, Uruguay, and Bolivia. From 1981 to 1990, Mr. Mahler served as Vice
President Finance of Amdahl Canada, a provider of enterprise-scale computing,
networking, and storage systems and services. From 1968 to 1980, he held
various senior financial management positions with Ford Motor Company of
Canada. Mr. Mahler is a Director of Selkirk Financial Technologies, and is
Vice-Chair of the Vancouver Board of Trade. He is also a Director of VGH/UBC
Hospital Foundation and a Director of the National Ballet School. Mr. Mahler
holds a Master of Business Administration from McMaster University and a
Bachelor of Science in Mathematics and Computer Science from the University of
Waterloo. He has been 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.

R.A. Millos(Officer)
(Vancouver, British Columbia)

Ronald Millos will assume the position of Chief Financial Officer of each of
the Trust, New Fording and the Partnership on May 31, 2003. He is currently
Vice President, Corporate Finance of Teck, a position he has held since
September 2001. From February to August 2001, he was Vice President and Chief
Financial Officer of Cominco Ltd., and from June 1998 to January 2001 was the
Comptroller of Cominco Ltd. Prior to joining Cominco Ltd., Mr. Millos was the
Assistant Controller of Teck Corporation. Mr. Millos holds a Bachelor of
Commerce from the University of British Columbia and is a member of both the
Institute of Chartered Accountants of British Columbia and the Canadian
Institute of Chartered Accountants.

53



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K.E. Myers(Officer)
(Calgary, Alberta)

Ken Myers is currently the Treasurer of both the Trust and New Fording. Mr.
Myers previously served as Treasurer of Old Fording and its predecessor, a
position he held since 1994. He is Chairman of the Economic and Taxation
Committee of the Coal Association of Canada and a past Director of the
Financial Executives Institute, Calgary Chapter. Mr. Myers is also a member of
both the Alberta Institute of Chartered Accountants and the Canadian Institute
of Chartered Accountants. Mr. Myers obtained a Bachelor of Commerce (with
Distinction) from the Sir George Williams University and also completed the
Western Executive Program at the University of Western Ontario. He has more
than nine years of service with the Fording Group and its predecessors.

R.H. Noonan(Officer)
(Calgary, Alberta)

Richard Noonan is currently the Vice President of Employee Relations of New
Fording, the same position he held with Old Fording since January 2003. From
1993 to 2002, Mr. Noonan served as General Manager, Employee Relations of Old
Fording and its predecessors. Mr. Noonan holds the designation of Certified
Human Resources Professional and is a member of the Human Resources Institute
of Alberta and the Conference Board of Canada Human Resources West Committee.
He also serves on the Institutional Advisory Committee for Southern Alberta
Institute of Technology. Mr. Noonan has more than 22 years of service with the
Fording Group and its predecessors.

M. S. Parrett(Trustee and
director)
(Aurora, Ontario)

Michael Parrett is an independent consultant with 20 years experience in the
mining industry. From 1991 to 2000, Mr. Parrett was Vice President and Chief
Financial Officer of Rio Algom Limited. From 1999 to 2000, Mr. Parrett was also
Vice President, Strategic Development & Joint Ventures of Rio Algom Limited.
From 2000 to 2001, Mr. Parrett was President of Rio Algom Limited. Prior to
1990, Mr. Parrett held various positions with Falconbridge Limited, serving as
Vice President, Controller and Chief Financial Officer in 1989. Mr. Parrett is
a chartered accountant and a graduate of York University.

R. Phillips, O.C.(Director)
(Regina, Saskatchewan)

Roger Phillips was the President and Chief Executive Officer of IPSCO Inc., a
steel manufacturing company, from 1982 until his retirement at the end of 2001.
He is a Director of Canadian Pacific Railway Limited, Imperial Oil Limited,
Cleveland-Cliffs Inc., the Toronto-Dominion Bank, the C.D. Howe Institute and
Inco Limited. Mr. Phillips is a Senior Member of the Conference Board, Inc., a
Fellow of the Institute of Physics and a Member of the Canadian Association of
Physicists. He is also President of La Saucière Investments Inc., a private
company. Mr. Phillips was appointed an Officer of the Order of Canada in 1999.
Mr Phillips was a director of Old Fording from 2001 through to the effective
date of the Arrangement.

T.E. Pierce(Officer)
(Calgary, Alberta)

Tom Pierce is currently the Controller of both the Trust and New Fording.
Prior to that, Mr. Pierce served as Controller of Old Fording, a position he
held since 2002. From 1998 to 2001, Mr. Pierce served as Manager, Accounting
of Old Fording and its predecessor. From 1996 to 1998, he served as Controller
of Minera NYCO S.A. de C.V. and from 1993 to 1996, as Chief Accountant,
Greenhills Operations. Mr. Pierce graduated from Simon Fraser University with
a Bachelor of Business Administration and is a member of both the Alberta
Institute of Chartered Accountants and the Canadian Institute of Chartered
Accountants. He has more than 11 years of service with the Fording Group and
its predecessors.

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J.L. Popowich(Officer)
(Calgary, Alberta)

Jim Popowich is currently Executive Vice President of both the Trust and New
Fording. Mr. Popowich held the same position with Old Fording since 2001.
From 1997 to 2001, he served as Vice President, Operations of Old Fording and
its predecessor, and from 1990 to 1997 as Vice President, Development and
Alberta Operations. He 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. He is also a
Director of Climate Change Central in Alberta. Mr. Popowich holds both a
Masters and Bachelor of Science in Mining Engineering from the University of
Saskatchewan. Mr. Popowich has over 35 years of service with the Fording Group
and its predecessors and served as a Director of Old Fording from October 2001
through to the effective date of the Arrangement.

H.G. Schaefer, F.C.A.(Trustee
and director)
(Calgary, Alberta)

Harry Schaefer is the President of Schaefer & Associates Ltd., a business
advisory firm, and he is also a corporate director. He is the Vice Chairman of
TransCanada PipeLines Limited, a North American energy company focussed on
natural gas transmission and power services, and the Chairman of the Mount
Royal College Foundation. He has held these positions since 1998 and 1993,
respectively. He served as the Chairman of Crestar Energy Inc. from 1996 to
2000 and as the Chairman of TransAlta Corporation from 1991 to 1996. He is
also a Director of Agrium Inc. Mr. Schaefer is a member of the Workers
Compensation Board of Alberta, Investment Advisory Group. Mr. Schaefer is a
former Director of Gulf Canada Resources Limited. Mr. Schaefer was a Director
of Old Fording from October 2001 through to the effective date of the
Arrangement.

D.J. Shyluk(Officer)
(Calgary, Alberta)

Donald Shyluk is currently Vice President of Projects and Development of New
Fording. Mr. Shyluk held the same position with Old Fording since 2001. From
1997 to 2001, Mr. Shyluk served as Vice President of Projects of a predecessor
of Old Fording and from 1985 to 1997 as General Manager of Projects. Mr.
Shyluk graduated with a Bachelor of Science in Civil Engineering from the
University of Saskatchewan. He is a member of the Association of Professional
Engineers, Geologists and Geophysicists of Alberta, the Canadian Institute of
Mining, Metallurgy and Petroleum and the Western Electric Power Institute. Mr.
Shyluk has more than 36 years of service with the Fording Group and its
predecessors.

J.M. Somers(Officer)
(Calgary, Alberta)

John Somers is currently Vice President of the NYCO Sales division of New
Fording. Mr. Somers held the same position with Old Fording and its
predecessor since 1999. From 1976 to 1997, he held various positions with
Kilborn Engineering & Construction, with his most recent position being
President of Kilborn Western Inc. From 1997 to 1998, Mr. Somers was the
President of SNC-Lavalin Mining Development Corporation. He also serves as a
Director of NorSask Forest Products Inc. Mr. Somers has a Bachelor of Science
in Mechanical Engineering from the University of Saskatchewan. He has been with
the Fording Group and its predecessors for four years.

W.W. Stinson(Trustee and director)
(Toronto, Ontario)

William Stinson is currently the Chairman of Westshore Terminals Income Fund,
the Lead Director of Sun Life Financial and a director of Grant Forest Products
Ltd. From 1981 to 1985, Mr. Stinson was President of Canadian Pacific Limited
(CPL), from 1985 to 1991, he was the President and Chief Executive Officer of
CPL, and from 1991 to 1996, he was Chairman and Chief Executive Officer of CPL.
From 1997 to 2001, Mr. Stinson was the Chairman of the Executive Committee of
United Dominion Industries Inc.

55



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D.A. Thompson(Director)
(West Vancouver, British Columbia)

David Thompson is Chief Executive Officer and Deputy Chairman of Teck, 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).

P. Valentine, F.C.A.(Trustee)
(Calgary, Alberta)

Peter Valentine currently holds a joint appointment as Senior Advisor to the
President and Chief Executive Officer of the Calgary Health Region and to the
Dean of Medicine, University of Calgary, as well as serving as Interim Vice
President (Finance and Services) at the 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 Canadian securities practice. 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. Mr. Valentine holds a Bachelor of Commerce (with
Distinction) from the University of British Columbia.

R.J. Wright, C.M., Q.C.(Trustee)
(Willowdale, Ontario)

Robert Wright is currently the Deputy Chairman of Teck, 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 a Director of the Mutual Fund Dealers Association and the AARC Foundation.
He is a Member of the Order of Canada.

J.B. Zaozirny, Q.C.(Trustee)
(Calgary, Alberta)

John Zaozirny is counsel to McCarthy Tétrault LLP, Barristers and Solicitors.
He has been with McCarthy Tétrault LLP since 1987. He has served as Vice
Chairman of Canaccord Capital Corporation since 1996 and is also a Director of
Acetex Corporation, Alberta Newsprint Company, Canadian Oil Sands Investments
Inc., Computer Modelling Group, IPSCO Inc., Matrikon Inc., Middlefield Bancorp
Limited, Pengrowth Corporation, Provident Energy Ltd., Ravenwood Resources
Inc., Silent Witness Enterprises Ltd. and UMA Group Ltd. He is a Governor of
the Business Council of British Columbia. He is a member of the Law Societies
of Alberta and British Columbia. He was Minister of Energy and Natural
Resources for the Province of Alberta from 1982 to 1986. Mr. Zaozirny was a
Director of Old Fording from 2001 through to the effective date of the
Arrangement and also served as a Director of the predecessor to Old Fording
commencing in 1986.

ADDITIONAL INFORMATION

Additional information in respect of Old Fording, including remuneration of and
indebtedness of its 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 Old Fordings Management Information
Circular and Proxy Statement dated February 12, 2002, which was prepared for
the last annual meeting of shareholders of Old Fording at which directors were
elected. Additional financial information in respect of Old Fording is
provided in its audited financial statements for the year ended December 31,
2002, which are contained in Fordings 2002 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:
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

56



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| | (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 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 recent annual meeting of Unitholders (if
any); 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) and (c) above, provided the Trust may require the payment of a reasonable
charge if the request is made by a person who is not a securityholder of the
Trust.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Requests for additional information should be directed to:

Secretary
Fording Canadian Coal Trust
Suite 1000, 205  9th Avenue SE
Calgary, Alberta
T2G 0R4

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APPENDIX A
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
of the Trust 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 its 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. The Trusts estimation of Proven Coal
Reserves is 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. The Trusts estimation of Probable Coal Reserves is equivalent to
the GSC Standards term for Indicated Reserves.

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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 and Potash

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

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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.

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.

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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.

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APPENDIX B

GENERAL DESCRIPTION OF
DECLARATION OF TRUST

This section describes, in general terms, certain important provisions of the
Declaration of Trust. This section is not intended to be a detailed summary of
all of the terms of the Declaration of Trust and reference is made to the full
text of its provisions. A copy of the Declaration of Trust is available to
Unitholders upon request.

Activities of the Trust

The activities of the Trust are restricted to:



| | (a) |  | investing in such securities as may be approved from time to time by
the Trustees, lending funds to New Fording and its affiliates and
borrowing funds for any such purpose;                                                                                                                                                                                                                                                     
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | issuing guarantees of the obligations and indebtedness of any of its
directly or indirectly wholly-owned subsidiaries and charging, pledging,
hypothecating or granting any security interest mortgage or encumbrance
over or with respect to any or all of the Trusts assets in connection
with any such guarantee;                                                                                                            
|
| | (c) |  | issuing Units;                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (d) |  | issuing debt securities or borrowing funds (including by means of
letters of credit, bank guarantees and bankers acceptances);                                                                                                                                                                                                                                                                                                  
|
| | (e) |  | purchasing securities pursuant to any issuer bid made by the Trust;                                                                                                                                                                                                                                                                                                                                                              
|
| | (f) |  | issuing rights and Units pursuant to any Unitholder rights plan
adopted by the Trust; (g) satisfying obligations of the Trust; (h)
disposing of any part of the assets of the Trust;                                                                                                                                                                                                                                             
|
| | (i) |  | temporarily holding cash, short-term investments and other investments
for the purpose of paying the expenses and liabilities of the Trust,
paying amounts payable by the Trust in connection with the redemption of
any Units or other securities of the Trust and making distributions to
Unitholders; and                                                                                                                     
|
| | (j) |  | undertaking such other activities as shall be approved by the Trustees
from time to time or which are contemplated by the Declaration of Trust
provided that such activity does not result in the Trust not being
considered either a unit trust or a mutual fund trust for purposes of
the Income Tax Act(Canada) or the Units being considered as foreign
property for purposes of Part XI of the Income Tax Act(Canada).

To the maximum extent possible, the Trust will make cash distributions to
Unitholders out of the interest income or principal repayments received in
respect of the New Fording Subordinated Notes, dividends and distributions
received on, and amounts, if any, received on redemption or repayment of
capital in respect of New Fording Common Shares and New Fording Preferred
Shares, after payment of, or reserves for, expenses and satisfaction of any
cash redemptions of Units.

Exercise of Voting Rights Attached to New Fording Common Shares

The Declaration of Trust provides that the Trustees shall vote the New Fording
Common Shares in favour of the nominees to the New Fording board of directors
approved by, or in favour of removal of any director when such removal is
approved by, more than 50% of the votes cast at a meeting of Unitholders called
for such purpose provided that: (i) none of the nominees is an employee of the
Partnership; (ii) a majority of the nominees are Independent Directors; and
(iii) a majority of the nominees are not Trustees. In the event that the
Unitholders

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approve nominees such that the election of such nominees would not comply with
the foregoing, the Declaration of Trust allows the Trustees to appoint such
other persons as Directors as is necessary to result in compliance.

The Declaration of Trust also states that the Trustees shall not authorize:



| | (a) |  | any combination, merger, amalgamation or arrangement of the Trust or
New Fording, except in conjunction with a reorganization of New Fording or
its assets provided that after such reorganization the Trust continues,
directly or indirectly, to hold 100% of the economic and voting interests
and 100% of the assets and liabilities of New Fording or any successor
thereto and for greater certainty, includes a continuance of New Fording
into another jurisdiction in Canada where the foregoing conditions apply
(an Internal Reorganization);
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any disposition of all or substantially all of the assets of the Trust
or New Fording, except in conjunction with an Internal Reorganization;                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | (c) |  | the disposition of any securities of New Fording held by the Trust,
except in conjunction with (i) an Internal Reorganization; or (ii)
pursuant to the redemption rights of Unitholders;                                                                                                                                                                                                                                                                                                                                                                  
|
| | (d) |  | the issuance of any shares in the capital of New Fording, other than
to the Trust or another wholly-owned subsidiary of the Trust or except in
connection with the satisfaction of the redemption rights in respect of
the Units;                                                                                                                                                                                                                                                                                                                         
|
| | (e) |  | the amendment of the articles of New Fording, except in conjunction
with an Internal Reorganization or except if the Independent Trustees
determine that there is no prejudice to Unitholders from such amendment;                                                                                                                                                                                                                                                                                                                                        
|
| | (f) |  | the liquidation or dissolution of Fording, except in conjunction with
an Internal Reorganization; or                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | (g) |  | the voluntary termination, dissolution or
winding up of the Trust;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

without the authorization of at least 662/3% of the
votes cast at a meeting of the Unitholders called for such purpose.

In addition, the Declaration of Trust provides that for a period of five years
from the Effective Date and provided that Luscar holds, directly or indirectly
from the Effective Date, any Units, the Trustees may not authorize the
disposition by the Trust of more than 90% of the New Fording Common Shares
except: (i) in conjunction with an Internal Reorganization such that the Trust
remains the sole direct or indirect holder of the New Fording Common Shares; or
(ii) pursuant to the redemption rights of Unitholders; without the
authorization of at least 75% of the votes cast at a meeting of the Unitholders
called for such purpose.

Related Party Transaction Approvals

In addition to any other legal requirement, the Declaration of Trust provides
that the approval of a majority of the Trustees other than the nominee of the
Principal Unitholder in question shall be required with respect to any
decision: (i) to enter into any agreement or transaction in which that
Principal Unitholder has a material interest or make a material change to any
such agreement or transaction; or (ii) relating to a claim by or against or
enforcement or waiver of material rights in respect of that Principal
Unitholder. In addition, the approval of the Independent Trustees shall be
required with respect to any decision to appoint a person who is a director,
officer or employee of Teck or its affiliates or the Partnership as an officer
of the Trust.

Units

The beneficial interests in the Trust are divided into interests designated as
Units. An unlimited number of Units may be created and issued pursuant to the
Declaration of Trust. 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
non-assessable and entitles the

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holder thereof to one vote at all meetings of Unitholders for each Unit held.
Units are currently represented by certificates but the Trustees have the
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 New Fording 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 Actand will not be insured under the provisions of that act or any
other legislation. Furthermore, the Trust is not a trust company and,
accordingly, is not registered under any trust and loan company legislation as
it will not carry on or intend to carry on the business of a trust company.

Unitholder Liability Protection Measures

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 will provide 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.
Personal liability may also arise in respect of claims against the Trust (to
the extent that claims are not satisfied by the Trust) that do not arise under
contracts, including claims in tort, claims for taxes and possibly certain
other statutory liabilities.

Notwithstanding the terms of the Declaration of Trust, Unitholders, unlike
shareholders of a corporation, do not currently have the benefit of statutory
limited liability and may not be protected from liabilities of the Trust to the
same extent as a shareholder is protected from the liabilities of a
corporation.

Issuance of Units

The Declaration of Trust provides that Units or rights to acquire Units may be
issued at the times, to the persons, for the consideration and on the terms and
conditions that the Trustees determine. At the option of the Trustees, Units
may be issued in satisfaction of any distribution of the Trust to Unitholders
on a pro ratabasis to the extent the Trust does not have available cash to
fund such distributions. The Declaration of Trust also provides that, unless
the Trustees determine otherwise, immediately after any pro ratadistribution
of Units to all Unitholders in satisfaction of any non-cash distribution, the
number of outstanding Units will be consolidated such that each Unitholder will
hold after the consolidation the same number of Units as the Unitholder held
before the non-cash distribution, except where tax was required to be withheld.
In this case, each certificate, if any, representing a number of Units prior to
the non-cash distribution will be deemed to represent the same number of Units
after the non-cash distribution and the consolidation.

Purchase of Units

The Trust may from time to time purchase Units in accordance with applicable
securities legislation and the rules prescribed under applicable stock exchange
or regulatory policies. Any such purchases may constitute an issuer bid under
Canadian provincial securities legislation and if so must be conducted in
accordance with the applicable requirements thereof.

Limitations on Non-Resident Unitholders

Certain provisions of the Income Tax Act(Canada) 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 NonResident 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, as a result of

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requiring such declarations as to beneficial ownership, that the beneficial
owners of more than 49% of the Units then outstanding are, or may be,
Non-Resident Beneficiaries or for the benefit of Non-Resident Beneficiaries, 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 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 less 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 such Units.

Information and Reports

The Trust will furnish to Unitholders such financial statements (including
quarterly and annual financial statements) and other reports as are from time
to time required by applicable law, including prescribed forms needed for the
completion of Unitholders tax returns under the Income Tax Act(Canada) and
equivalent provincial legislation.

Prior to each meeting of Unitholders, the Trustees will provide the Unitholders
(along with notice of such meeting) a proxy form and an information circular
containing information similar to that required to be provided to shareholders
of a Canadian public corporation.

Take-over Bids

The Declaration of Trust contains provisions to the effect that, if a take-over
bid is made for the Units and not less than 90% of the Units (other than Units
held at the date of the take-over bid by or on behalf of the offeror or
associates or affiliates of the offeror) are taken up and paid for by the
offeror, the offeror will be entitled to acquire all of the remaining Units
held by Unitholders who did not accept the take-over bid.

Unitholder Dissent Rights

The Declaration of Trust provides Unitholders with dissent rights in connection
with:



| | (a) |  | a compulsory acquisition of Units;                                                                                                                                                                                                                                                                       
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any combination, merger, amalgamation or arrangement of the Trust, or
sale of all or substantially all of the assets of the Trust; and                                                                                                                                                                   
|
| | (c) |  | transactions by New Fording in respect of which Unitholders have a
right to vote, if such matter is a matter for which such Unitholder would
have been granted the right to dissent under section 190 of the CBCA, if
such Unitholder was a shareholder of New Fording and not a Unitholder of
the Trust.

However, Unitholders shall not have dissent rights if the event which otherwise
gave rise to such dissent rights is a transaction in which the Trust directly
or indirectly transfers the securities held by the Trust to Unitholders on a
proportionate basis.

Redemption Right

Units will be 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:

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| | (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 days
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
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | 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 specieof securities of New Fording 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 which may be
distributed in specieto Unitholders in connection with a redemption will not
be listed on any stock exchange and no market is expected to develop in such
other 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.

B-5



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##### 



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:



| | (a)                                                                                                                                                                                                                                                                                                                                                               |  | for the purpose of ensuring continuing compliance with applicable laws
(including the Income Tax Act(Canada)), 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 nor 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 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 Income Tax Act(Canada) or cause the Units
to constitute foreign property under the Income Tax Act(Canada).

B-6