Commentary For the year ended 31 December 2024

To deliver on our strategic objectives of people empowered to create impact, reach carbon neutrality by 2050 and becoming a catalyst for economic growth and environmental stewardship, we incorporate responsible and sustainable business practices in everything we do. Not only do we aim to mitigate and manage our negative impact on natural resources, but we also contribute to enhancing ecosystem resilience and the lives of our employees and communities.

Safety

Our safety goal is to achieve Zero Harm by proactively managing safety priorities through the consistent implementation of Exxaro’s five safety focus areas. These are incredible safety leadership, effective communication, training, zero tolerance and risk management.

At the end of the financial year, the group completed 28 consecutive months without work related fatalities. This is a significant milestone, not only highlighting the effectiveness of our strategy but also the dedication and commitment of all our employees to safety. Other notable fatality free years reached are:

• Leeuwpan has had zero fatalities since inception, 34 years ago
• FerroAlloys reached 27 years fatality free
• Mafube has had zero fatalities since inception, 20 years ago
• Grootegeluk recorded 12 years fatality free
• Cennergi has had zero fatalities since inception, 8 years ago
• Matla reached 8 years fatality free
• Belfast reached 2 years fatality free

We were honoured to be recognised at the 2024 Coal Safe Awards, which celebrate the efforts of the coal mining industry in upholding safety standards. Amongst other awards received, Exxaro won the 2024 best in class safety record award.

Our LTIFR for the group of 0.06 in FY24 was an improvement compared to 0.07 per two-hundred thousand man-hours worked in FY23. Our target remained at 0.05.

We continue to drive safety, remaining vigilant to prevent workplace incidents, and fostering a proactive safety culture that safeguards lives and enhances operational resilience. In line with this commitment, we will be rolling out our refreshed safety strategy and embedding it across the group during FY25.

People

Our people are at the heart of everything we do. Exxaro is championing diversity, equity and inclusion and has maintained its value proposition as an employer of choice.

As such, Exxaro has once again received recognition from the Top Employer Institute as a 2025 Top Employer, achieving exceptional performance in areas of business strategy, diversity, equity and inclusion, people strategy, and for our listening strategies.

We nurture talent through workforce planning, talent development, leadership capability, training, and succession planning, ensuring that we do not only address skills shortages but also build a robust and diverse talent pipeline.

In FY24, we invested over R400 million to develop our people through comprehensive training programs, leadership development initiatives and opportunities for continuous learning.

We have 82 graduates in our talent pipeline through our professionals in training programme, preparing graduates to meet current and future business needs while gaining practical on-the-job training. We are also supporting 56 university students through our bursary programme.

For the past six years, we have consistently achieved our Mining Charter III employment equity targets. In FY24, women made up 36%, while historically disadvantaged individuals made up 76% of our senior management. In middle management, 45% of our employees are women and 85% are historically disadvantaged individuals, while in junior management, 35% are women and 83% historically disadvantaged individuals.

In 2024 we also signed a new three-year coal wage agreement with all trade unions, demonstrating the existence of strong relations built on trust and mutual respect.

Climate change response strategy implementation

Climate change remains a priority for Exxaro, and we remain committed to lowering our carbon footprint, especially in a fast-changing legislative environment.

Our Decarbonisation Roadmap, which was approved by the board, comprises a comprehensive framework that summarises our key milestones and strategic initiatives necessary for Exxaro to achieve carbon neutrality by 2050. From a 2022 base, we are targeting 40% and 75% cumulative reduction in scope 1 and 2 emissions, in 2030 and 2040 respectively. We will achieve this through renewable energy initiatives as well as equipment and fleet optimisation technology.

We remain agile in our approach, and we will continue to regularly review and update our Roadmap in line with the evolving technological and innovation landscape.

The Just Transition, of which at Exxaro we prefer the term Impactful Transition, ensures fairness, equity, and inclusivity for all stakeholders, particularly the vulnerable and most impacted by climate change, while shifting to a low-carbon, sustainable economy.

Environmental performance

In FY24, we achieved carbon intensity of 4.12tCO₂e/kt TTM against our target of 4.2tCO₂e/kt TTM. This is an improvement of 6.4% from the FY23 carbon intensity of 4.4tCO₂e/kt TTM. Our water intensity of 142 l/t RoM was also within our 180 l/t RoM target, despite an increase from 105 l/t RoM recorded in FY23.

Our mine plans consider land management, mine closure and concurrent rehabilitation supported with financial provisions to ensure we honour our commitments. At the end of the financial year, our efforts on rehabilitation continued as we rehabilitated 477 hectares of disturbed land, increasing our rehabilitated land to 26% from 19% in FY23.

Encouragingly, we recorded zero level 2 and 3 environmental incidents during 2024. As catalysts for economic growth and environmental stewardship, we continue to explore strategic partnerships, adopting green technologies, and employing robust environmental management tools to drive continuous improvement and enhance sustainability.

Exxaro is committed to safeguarding biodiversity through targeted initiatives, including species relocation, wetland rehabilitation, invasive plant management, and implementing conservation programmes that protect the native flora and fauna across our operations. Our impacts on biodiversity are further enhanced by strategic partnerships with conservation organisations and communities.

We are incorporating nature-based solutions that support carbon offset projects that promote climate resilience and biodiversity restoration. As part of a pilot project, a total of 16 000 Spekboom trees were planted at the Grootegeluk and Leeuwpan mines, to control and eradicate invasive alien species, while preventing soil erosion due to the Spekboom’s soil binding properties.

Exxaro’s Manketti game reserve near the Grootegeluk mine partnered with the Cheetah Outreach Trust and Endangered Wildlife Trust to conduct a ground-breaking three-year census of the country’s remaining free-roaming cheetah populations. This initiative aims to deepen our understanding of cheetah behaviour, habitat use and co-existence strategies that support the long-term conservation of these apex predators.

Social investment and development

Delivering meaningful socio-economic value is integral to Exxaro’s purpose of powering better lives in Africa and beyond. Our efforts focus on addressing unemployment, enhancing education, and enabling infrastructure development to empower host communities and drive inclusive economic growth.

As at 31 December 2024, social investments amounted to R2.1 billion, of which R28 million was social investment spend by Cennergi, benefiting socio-economic development initiatives including education, welfare, agriculture development, and health.

The group’s local procurement from black SMME supported 562 SMMEs through enterprise and supplier development initiatives in FY24.

We are making a meaningful impact in our host communities by investing in education. Our early childhood development programmes benefited more than 2 700 children, more than 40 registered early childhood development centers, and more than 180 teachers through professional training. We also successfully connected 27 schools in Mpumalanga and Limpopo with wi-fi networks and provided information and communications technology labs to 20 schools.

In January 2025, Exxaro handed over the newly built Martina Kekana school hall, a block of four classrooms and associated external upgrades to Nelsonskop Primary school in Lephalale, benefiting more than 1 580 children and teachers. At an investment of R20.3 million, the project boosted the local economy, through local company participation and job creation.

Nearly half of the world’s population went to the voting polls in 2024, leading to major shifts in global and country specific politics. We also saw that evolving geopolitical and economic tensions are leading to increased fragmentation in the global economy. Inflation and monetary policy saw significant developments as global disinflation continued which prompted a pivot in monetary policy with central banks easing interest rates to boost economic activity.

In South Africa, the peaceful completion of the 29 May 2024 general election and the formation of the Government of National Unity, led to improved local consumer and global investor sentiment, fostering cautious optimism for improved economic growth.

Coal markets and commodity price

The coal market in 2024 started on a bearish note in 1Q24 following trends from late 2023. This was primarily due to sufficient coal supply in key markets such as India, Japan, South Korea and Taiwan, with lower gas prices making it a more competitive alternative in Europe. However, geopolitical factors played a significant role in lifting prices higher, alongside the TFR derailment in 1Q24 and early 2Q24.

The resurgence in Indian demand was primarily maintained due to its strong economic growth, despite a brief decline between July and September 2024 due to high stockpiles of South African coal, the monsoon season, low domestic coal prices and low steel prices. European demand faced headwinds from strong renewable energy generation, revision of coal phase-out targets and cheaper gas prices.

Japanese and South Korean demand remained steady, with Japan continuing to benefit from a diverse energy mix (gas, renewables, nuclear, and coal), but the restart of several nuclear plants posed a risk to coal demand.

The benchmark API4 RBCT export price averaged US$105 per tonne in FY24, compared to US$121 per tonne in FY23, a decline of 13%.

The South African domestic market demand remained resilient in 2H24 despite macro-economic impacts affecting domestic end users. In the Waterberg region, Eskom’s coal offtake improved slightly, but operational challenges at the power stations continued to impact its ability to consistently take coal from Grootegeluk mine.

Coal logistics and infrastructure

Rail operations continued to face ongoing disruptions, including cable theft, vandalism, unavailability of locomotives and wagons and infrastructure degradation. Additionally, three derailments affected TFR volume throughput in 1H24. Despite these challenges and rail execution volatility, TFR’s performance to the Richards Bay Coal Terminal improved, increasing to 51.9Mtpa (FY23: 47.9Mtpa), with a better performance recorded in 2H24.

Comparability of results

To enhance the comparability of results between the two reporting years, we have adjusted our earnings for non-recurring items (referred to as non-core adjustments) to report on adjusted financial results. The non-core adjustments in both FY24 and FY23 are consistent with the headline earnings adjustments (refer to note 4).

Group revenue and EBITDA

Group revenue increased by 5% to R40 725 million (FY23: R38 698 million), primarily due to a 6% increase in Coal revenue and a 5% increase in Energy revenue.

Group EBITDA declined by 22% to R10 423 million (FY23: R13 399 million), mainly attributable to a 16% decrease in Coal EBITDA and a negative contribution from the Other operating segment, which is discussed further under each business segment.

Adjusted equity-accounted income

Group earnings

Headline earnings decreased by 36% to R7 298 million (FY23: R11 327 million), mainly driven by the 22% decrease in group EBITDA and a 47% decrease in adjusted equity‑accounted income. SIOC’s adjusted equity-accounted income declined by 45%, mainly due to lower iron ore prices and lower sales volumes. Mafube’s adjusted equity-accounted income declined by 52%, owing largely to lower coal export prices.

The weighted average number of shares remained unchanged at 242 million, translating into a headline earnings per share of 3 016 cents per share (FY23: 4 681 cents per share).

Cash flow and capex

Cash generated by our operations amounted to R10 432 million (FY23: R13 307 million), and dividends received from our equity-accounted investments totalled R3 871 million (FY23: R4 911 million). These cash inflows were sufficient to cover our capital expenditure, taxation, and ordinary dividends paid.

Total capex decreased by 8% to R2 475 million (FY23: R2 699 million). The capex for FY24 comprised R2 146 million mainly for coal sustaining capital, R302 million expansion capital for our Energy projects and R27 million intangible assets.

Debt exposure

Our good cash generation increased our net cash position to R16 309 million (excluding Energy’s net debt) as at 31 December 2024, compared to a net cash position of R14 834 million at 31 December 2023.

Unreviewed coal production and sales volumes

Thermal Coal

Commercial Waterberg

Production at Grootegeluk decreased by 2.5Mt (10%) to match Eskom’s lower demand and manage full stockpiles.

The decrease in sales of 1.6Mt (6%) was due to the lower offtake from Eskom (1.3Mt) resulting from maintenance outages affecting production at both the Matimba and Medupi power stations, as well as full stockpiles. However, offtake improved in the latter half of the year.

Commercial Mpumalanga

Thermal coal production decreased by 59kt (1%) compared to FY23 due to:

• A decrease in production at Leeuwpan of 794kt (24%) following a change in mining sequence that favoured the production of RB3 product

The decrease was partly offset by:

• An increase in production at Belfast of 609kt (21%) after fully transitioning to the new mining contractor and achieving a higher yield
• Higher buy-ins from Mafube JV of 126kt (8%), mainly due to increased equipment availability and better blasting fragmentation

The commercial Mpumalanga mines’ thermal coal sales decreased by 1.3Mt (34%), mainly due to:

• Belfast selling 981kt (73%) less coal domestically as more coal was channelled to the export market
• Lower sales at Leeuwpan of 435kt (20%), as lower demand was experienced for sized products as well as lower sales to Arcelor Mittal South Africa Limited (AMSA), partly offset by increased sales to Eskom

The decrease was partly offset by:

• An increase in sales of middlings at Mafube of 118kt (39%), which were sold domestically due to logistical constraints

Exports

Export sales increased by 1.9Mt (37%), as we were able to use alternative distribution channels and the improved TFR performance in the latter part of the year.

Exxaro’s export evacuation through RBCT increased to 5.2Mtpa (FY23: 4.6Mtpa), despite continued disruptions. Additionally, export evacuation using alternate channels increased to 1.8Mtpa (FY23: 479kt) through the use of alternative routes and ports to fulfil market demand.

Tied

Coal production and sales at Matla decreased by 152kt (3%) and 161kt (3%), respectively. The lower production was due to the stopping of the short wall in April 2024.

Metallurgical Coal

Grootegeluk’s metallurgical coal production increased by 8kt to match offtake. Sales increased by 11kt (2%) due to increased demand for semi-soft coking coal.

Coal revenue and EBITDA

Coal revenue increased 6% to R39 115 million (FY23: R36 945 million). The higher revenue from commercial mines was mainly due to higher export volumes, albeit at a lower realised average export price of US$100 per tonne (FY23: US$117 per tonne). Despite the decline, Exxaro achieved a strong 95% price realisation in FY24 compared to 97% in FY23 owing to our effective market‑to‑resource optimisation initiatives.

Higher domestic sales prices were not sufficient to offset the lower domestic volumes.

Coal EBITDA decreased by 16% mainly due to:

• Higher selling and distribution costs (-R1.4 billion), as we used alternative distribution channels
• Higher operational costs (-R1.2 billion), mainly due to higher contractor costs driven by higher volumes of overburden, higher consumables and higher maintenance costs
• Lower selling prices (-R815 million)
• Cost inflationary pressures (-R605 million), driven mainly by employee cost increases above the PPI inflation rate
• Negative environmental rehabilitation provision movements (-R293 million)

The decrease was partly offset by:

• Higher sales volumes (+R2.2 billion)
• Lower buy-in costs from Mafube JV due to the lower prices (+R100 million)

Coal equity-accounted investments

Adjusted equity-accounted income from Mafube JV decreased by 52% to R243 million (FY23: R510 million), mainly due to lower export prices.

Coal capex and projects

The coal business’s capex decreased by 15%, driven by lower sustaining capital spend at Grootegeluk for the Backfill phase 3 and the timing of the haul track replacement strategy.

Cennergi’s operating wind assets generated 725GWh of electricity (FY23: 727GWh), with revenue increasing by 5% to R1 411 million (FY23: R1 345 million). Wind generation was in line with the December 2024 guidance of 729GWh.

EBITDA margin on the operating wind assets remained consistent at 80% (FY23: 80%), underpinned by the long-term offtake agreements with Eskom.

Construction of the 68MW Lephalale solar project (LSP) at Grootegeluk is ongoing, with commercial operations anticipated in mid-2025.

Cennergi’s operating wind assets project financing of R4 073 million (FY23: R4 348 million) will be fully settled by 2031, while the LSP project financing of R1 150 million (FY23: R477 million) will be fully settled by 2042. The project financing has no recourse to the Exxaro balance sheet and is hedged through interest rate swaps.

The Ferrous business comprises our FerroAlloys operation. Due to lower offtake from customers, production was curbed to manage full stockpiles, resulting in an EBITDA loss of R45 million, compared to an EBITDA profit of R83 million in FY23. Exxaro has made significant progress in disposing of our entire shareholding in Exxaro FerroAlloys Proprietary Limited, with the signing of a sale and purchase agreement expected to be concluded in FY25.

Equity-accounted investment

The 45% decrease in adjusted equity-accounted income from SIOC to R3 383 million (FY23: R6 157 million) was driven by lower iron ore prices and sales volumes.

In August 2024, we received an interim dividend of R1 634 million from our investment in SIOC. In February 2025, SIOC declared a final dividend to its shareholders. Exxaro’s share of the dividend amounts to R1 732 million, which is R98 million higher than the interim dividend received. The dividend will be accounted for in 1H25.

The Other segment mainly comprises costs related to the corporate office and smaller operations. The Other operating segment reflected an EBITDA loss of R799 million (FY23: R80 million EBITDA profit). The key reasons for the variance are:

• Higher insurance costs mainly due to the prior year including a once-off benefit of R375 million resulting from the accounting treatment of the new insurance product entered into, not recurring in FY24
• Costs incurred to advance our growth and diversification strategy (R192 million)
• Expenses related to our social impact strategy (R119 million)

Equity-accounted investment

The R267 million decrease in adjusted equity-accounted income from Black Mountain to R65 million (FY23: R332 million) was mainly due to production challenges resulting in lower production and sales volumes.

Two licences are currently being processed for the Matla mine:

• The mining right licence which expires in March 2025, was submitted to the Department of Mineral Resources and Energy in September 2024
• The Water Use license submitted in 4Q24 to the DWS

As previously reported, Mafube submitted detailed designs for the discard dump’s lining with the high-density polyethylene liner required by the DWS for the water use license. The DWS granted the water use license on 16 October 2024.

In 4Q24, Exxaro applied for an amendment to the Belfast water use license. The granting of this amendment will ensure alignment between the license and operational activities.

Our total attributable Coal Resource decreased by ~1%, primarily due to mining depletion. The successful completion of annual exploration campaigns at Mafube and Matla, including a 3D geophysical seismic survey at our Moranbah South coal project (a joint operation with Anglo Coal (Grosvenor) Proprietary Limited), increased confidence levels, leading to positive movements within the Coal Resource categories.

Our total attributable Coal Reserve decreased by ~3%, primarily due to mining depletion and revised market assumptions. Material decreases in Coal Reserves were recorded at Leeuwpan mine (11%) and Belfast mine (15%), primarily due to mining depletion, whereas a decrease at Matla mine (17%) was due to mining depletion and a decision to adjust the Coal Reserve quality cut-off, removing lower coal-quality mining blocks within the life of mine plan.

Both Coal Resource and Coal Reserve lead Competent Persons are in the full-time employment of Exxaro: Henk Lingenfelder (Bachelor of Science: geology (Honours), Certified Professional Natural Scientist, Pr Sci Nat: 400038/11) as the group manager: mineral asset management (MAM) and Chris Ballot (Bachelor of Engineering (mining), Engineering Council of South Africa (ECSA), 20060040) as the group manager: mine technical services. Both persons have approved the information, in writing in advance of this publication.

Subsequent to 31 December 2024, the following events occurred:

Energy business – Karreebosch project

On 17 February 2025 Cennergi Holdings (Cennergi Holdings), a wholly owned subsidiary of Exxaro, in partnership with G7 Renewable Energies Proprietary Limited, reached financial close on the 140MW Karreebosch Wind Farm (RF) Proprietary Limited (Karreebosch) project. Karreebosch has a 20-year Power Purchase Agreement with Northam Platinum Limited. Cennergi Holdings acquired 80% of the share capital in Karreebosch as well as 50% of the share capital in Karreebosch Asset Management Proprietary Limited. The total project cost is expected to be R4.7 billion which will in the majority be funded with project financing by Nedbank, Absa Bank, and Standard Bank with the financial structure set up to ensure long-term sustainability, as well as with limited recourse to the Exxaro balance sheet.

Economic context

As we move into 2025, the global economic landscape remains uncertain, with geopolitical tensions and policy shifts continuing to evolve. While these international developments will undoubtedly have an impact on our business, our focus remains firmly on the factors within our control.

The formation of the Government of National Unity has improved sentiment, fostering a sense of cautious optimism for economic growth. We are seeing positive developments, such as increased private investment in renewables, Eskom’s progress on maintenance and transmission upgrades, and accelerated reforms in ports and rails.

Furthermore, the new two-pot retirement system is expected to ease household debt and boost consumer spend from late 2024 into 2025. In 2024, South Africa’s real GDP grew 0.6%, driven by a strong fourth quarter after downward pressures faced in earlier quarters. We are hopeful that the momentum will continue into 2025.

Commodity markets and price

The seaborne thermal coal demand is expected to be influenced by geopolitical factors and energy security needs. Domestically, any improvement in the local economic environment is likely to boost coal demand from local end users, particularly as Eskom works to address its operational challenges. Infrastructure challenges remain, as evidenced by the recent railway breakdown on the Richards Bay Coal Terminal Waterberg line due to heavy rainfall. We will continue to actively explore all available routes to market to meet customer demand and unlock value.

This continuous rise in iron ore supply and exports remains the key limiting factor for seaborne iron ore prices, affecting the performance of Exxaro’s SIOC investment. While major miners’ supply is increasing, overall Chinese demand remains relatively flat. However, towards the end of 2024, there was a rise in steel and iron ore demand from non-property sectors. Early signs indicate that the Chinese government’s interventions are beginning to yield results, evidenced by the manufacturing and services sectors moving into expansionary territory, assisted by improved steel mill margins.

Operational performance

Our business is still impacted by commodity prices, domestic structural challenges and developments, coal offtake and both the global and domestic geopolitical environment. We provide the following guidance for the 2025 financial year:

• Coal production and sales to be within the range of 39.5Mt to 43.7Mt
• Exports sales to be between 6.65Mt and 7.35Mt
• We have kept our coal sustaining capex guidance unchanged between
• R2.5 billion and R3 billion
• Due to anticipated commissioning of our Lephalale Solar Plant, our energy generation guidance increases, and we expect it to be within the range of 780GWh to 810GWh, which consists of full year wind generation and half year solar generation guidance.

The group has consistently maintained that when determining the level of dividend pay-out and, therefore, the dividend cover, cognisance needs to be taken of the current state of the industry, Exxaro’s capital expenditure requirements, and other relevant commitments. This is particularly relevant in the challenging economic environment, including the impact of the logistical challenges.

The board of directors has declared a final cash dividend comprising:

• 2.5 times Adjusted Group Earnings
• Pass through of the SIOC dividend of R1.7 billion

Notice is hereby given that a gross final cash dividend, number 44 of 866 cents per share, for the year ended 31 December 2024, was declared from income reserves and is payable to shareholders of ordinary shares on 12 May 2025.

For details of the final dividend, please refer to note 5 of the reviewed condensed group financial statements for the year ended 31 December 2024. The details will also be published on our website.

Salient dates for payment of the final dividend are:

No share certificates may be dematerialised or re-materialised between Wednesday, 7 May 2025 and Friday, 9 May 2025, both days inclusive. Dividends for certificated shareholders will be transferred electronically to their bank accounts on the payment date. Shareholders who hold dematerialised shares will have their accounts credited at their central securities depository participant or broker on Monday, 12 May 2025.

Given the net cash position at 31 December 2024 of R16 309 million (excluding Energy net debt), in addition to the final dividend declared, the board of directors has approved a R1.2 billion share repurchase programme, subject to prevailing market conditions, and JSE Listings Requirements.

Additional information on financial and operational results for the year ended 31 December 2024 and the accompanying presentation can be accessed on our website.

On behalf of the board of directors

13 March 2025