Exxaro Resource limited Report Selector 2018

Report Selector

Exxaro Resources Limited Integrated report 2018

Our year in review

Value creation

Exxaro uses the six-capitals model (natural, human, social, manufactured, intellectual and financial capital) as a balanced approach to increase our potential to invest and develop for sustainable growth.

We strive to add value to the capitals during the lifecycle of every mining operation - with the aim of leaving each area richer after mine closure. At each stage of the value chain, which we refer to as the resource-to-market business model, the cumulative net effect is to leave a positive impact. Each sustainability capital that we affect will be responsibly managed to maximise the benefit to all stakeholders, internally and externally. This is detailed in the business model.

How we use and replenish our capitals ultimately translates into our financial capital - the primary purpose of any business. Adding value to each capital or managing the trade-offs supports our licence to operate (business model). The cash value-added statement shows the wealth the group has created through mining operations and investing activities:

Our employees enjoy the largest share of value created through earnings as well as self-development, which will continue to benefit the business

R3.5 billion


Shareholders receive a return on their investment through dividends and capital growth in the share price

dividend 2 340cps

Suppliers and contractors are supported by procuring consumables, services and capital goods

R4.6 billion

total spend, 34% from black suppliers*


Governments of countries where we operate and invest receive various taxes and royalty payments

R1.7 billion

Providers of finance receive a return on their

ROCE 23%


Communities benefit from our investment in projects, including education programmes and infrastructure development

R77 million

We are reinvesting in the growth of our coal business. A R15 billion expansion programme is under way in the Waterberg and Mpumalanga regions
R2.9 billion spent in FY18

*Black-owned, black woman-owned, black emerging enterprises and black qualifying small enterprises.

Despite another challenging environment in 2018, we created significant value for our stakeholders and contributed meaningfully to the South African economy.

Value distribution (Rm)  
Value distribution (Rm)  

Performance against our sustainability capitals

Trend   Target   2018   2017   2016  
Reportable cases of environmental incidents   0   7 x level 2   1 x level 2   5 x level 2  
Carbon intensity (ktCO2e/TTM)   5.3   5.4   6.0  
Water intensity (kl/run of mine)   0.20   0.11   0.18   0.22  
Rehabilitation funding adequacy of commercial mines, ex guarantees (%)   80   25   24   -  
Fatalities   0   0   1   0  
LTIFR   0.11   0.12   0.12   0.09  
OHIFR   0.31   0.33   0.33   0.35  
Skills provision (human resource development) (%) (2014 mining charter)   5.1   5.1   5.1   4.5  
BBBEE contribution level   1   4   5   6  
SLP project delivery (time variance) (%)   0   12   (15)   (13)  
SLP project delivery (cost variance) (%)   0   (8)   (15)   (13)  
Capital project delivery measure (on-time variance) (%)   0   0.1
Capital project delivery measure (on-cost variance) (%)   0   0
(on target)
Core EBITDA1 operating margin (%)   20   29   32   na  
Return on capital employed (ROCE) (%)2   20   23   23   23  
Core HEPS (cents)   2 159   2 011   1 457  
Net debt to EBITDA (times)   1.5   0.5   N/A   N/A  
Black ownership (%)       30   30   52  

1EBITDA is calculated by adjusting earnings before interest and tax for depreciation, amortisation, impairment charges and net loss or gain on disposal of investments and assets.
22017 is re-presented (refer to group annual financial statements).

Worse Improvement Unchanged