Exxaro Resource limited Report Selector 2018

Report Selector

Exxaro Resources Limited Supplementary Report

Our environment


Seven (7) environmental licences (renewal and amendments) were granted

No level 3 (significant) environmental incidents were recorded

21% of the land disturbed is rehabilitated

Maintained our CDP score of B+

Water and energy intensity targets are better than industry targets


Still recording level 2 incidents. Target is to have no level 2 and 3 incidents

Some mines not on target in implementing alien and invasive species programmes

Rehabilitation financial provisions for captive (Eskom) mines still a challenge


Natural resources like water, air, biodiversity and land are central to our business. We focus on responsible use by conserving natural resources and reducing the burden of pollutants on the environment through:

  • Ensuring all activities are properly authorised
  • Complying with all statutory environmental requirements as a minimum
  • Using energy and water as efficiently as possible
  • Operating responsibly from the twin perspectives of compliance and natural resource use
  • Actively participating in voluntary benchmarks, such as the global carbon and water disclosure projects
  • Developing innovative policies and programmes to address environmental impacts and use of natural resources.

Comprehensive group standards have enhanced the implementation of legal requirements and sustainable use of natural resources. These include management standards for air quality, water, energy, rehabilitation and mine closure, and environmental incident management and reporting.

All Exxaro's business units have ISO 14001 accreditation, reflecting the global industry standards in place to minimise environmental impacts.

All our South African operations have environmental management programmes (EMPs) as required under the Mineral and Petroleum Resources Development Act (MPRDA) and National Environmental Management Act (NEMA). These are key indicators in ensuring Exxaro remains a sustainable business. We also adopt the precautionary principle entrenched in NEMA in evaluating the environmental impacts of business opportunities.

All our operations have now been granted integrated water use licences (most Exxaro business units need more than one licence).

There were four new water use licences granted in 2018.


Exxaro’s green timeline

  • 2006
  • 2008
  • 2009
  • 2010
  • 2011
  • 2012
  • 2013
  • 2014
  • 2015
  • 2016
  • 2017
  • 2018


  • Exxaro adopts Energy Efficiency Accord


  • Energy efficiency task team established, with voluntary champions at each business unit
  • Sponsors Unisa chair in business and climate change for three years
  • Carbon emissions reported for the first time (19 million tonnes of CO2e)


  • Comprehensive response developed to energy, carbon and climate change management


  • Major water management programme introduced
  • Developing renewable energy projects


  • Launched biodiversity, waste and air programme
  • Formed standalone energy company, Cennergi, with international energy partner
  • R107 million spent on developing cleaner energy initiatives — cogeneration, carbon credit trading, renewable energy, biodiesel, coal-bed methane development and coal base-load projects


  • Carbon footprint significantly reduced
  • Cennergi preferred bidder on two wind energy projects totalling 234MW


  • Cennergi: construction begins on Amakhala Emoyeni and Tsitsikamma wind farms
  • Agreement with GDF SUEZ on independent power production for energy security
  • Agreement with Linc Energy on underground coal gasification focuses on cleaner energy


  • Cennergi: construction of two wind farms under way


  • Exxaro won a Global Green Award in 2014 for its environmental and world-class sustainable practices


  • All operations granted integrated water use licences


  • Submitted our first pollution-prevention plans
  • First submission into national atmospheric emission inventories systems
  • Submitted our greenhouse gas report 2017 and carbon budget report


Our clean energy subsidiary pays Exxaro dividends

Our procedures

Energy   Water   Waste
  • Energy management procedure
  • Energy efficiency plans
  • CO2 emissions reports
  • Responsive resource use
  • Targets
  • Climate change
  • Energy-efficiency reports
  • Water management procedure
  • Water management plans
  • Water-related risk assessment
  • Water efficiency plans
  • Water authorisation
  • Financial impact of water management/treatment. Water monitoring and reporting
  • Waste management procedure (including classification)
  • Waste authorisation
  • Waste handling, transportation and disposal procedure
  • Waste management and reporting
  • Waste efficiency reports
  Ecology   Closure and ongoing rehabilitation   Land management   Air
  • Biodiversity management procedure
  • Biodiversity impact management
  • Biodiversity management plans
  • Ecological effect impact procedure
  • ECR authorisation
  • Biodiversity monitoring and reporting
  • Ecology efficiency reporting
  • Mine closure and ongoing rehabilitation procedure
  • Integrated mine closure plan
  • Financial provision
  • Closure objectives – management plans
  • Mine closure impact assessment
  • Ongoing rehabilitation monitoring and reporting
  • Closure and ongoing efficiency reports
  • Land management procedure
  • Operational land management plan
  • Land disposal strategy
  • Land management efficiency reports
  • Air quality authorisations (AEL)
  • Air quality management procedure
  • Air quality impact assessment
  • Air quality management plans
  • Air quality monitoring and reporting
  • Stakeholder forum
  • Energy-efficiency reports

Building blocks to exceed compliance levels

After a strategic review of key environmental risks from Exxaro's operations, we have identified the building blocks required to ensure consistent compliance and, in time, to exceed regulatory minimums where possible.

South African mining companies are heavily regulated, with compliance centred on receiving, converting and retaining all mining rights. To ensure we continue to meet legal requirements as a minimum, compliance across Exxaro is monitored by two board-mandated entities: the sustainability, risk and compliance committee as well as the social and ethics committee.

Running all our operations with approved EMPs is fundamental to our sustainability and legal compliance. Some EMPs are being updated to align to the MPRDA and to include new developments. As applications for various projects are at different stages of regulatory assessment, we continuously engage with the relevant authorities, agencies and other stakeholders to expedite these licences.

Two new mining rights were granted and two new prospecting rights were granted.

Exxaro received no environmental stoppage directives in the review period. No fines were issued.

We completed the lengthy process of migrating our authorisations to the National Water Act (1998) two years ago. All Exxaro operations now have the required integrated water use licence.

Incident reporting

Using a standardised reporting system, all business units manage incidents effectively, resulting in a safer and more sustainable work environment. In 2018, seven level 2 incident occurred and was reported to the relevant authorities. Corrective actions to prevent recurrence were approved by authorities prior to implementation. There were no significant (level 3) incidents in 2018.

Environmental incidents – group

Level 1 Level 2 Level 3  
Business unit 2018   2017   2018   2017   2018   2017  
Arnot   14          
Char plant            
Grootegeluk 11   16   1        
Leeuwpan 8   20          
Matla 19   29     1      
North Block Complex 13   4   1        
ECC 28   1          
Tshikondeni 1   1          
Belfast 50     5        
Total 80   85   7   1   0   0  
Level 1: Minor impact and/or non-compliance.
Level 2: Intermediate impact and/or non-compliance.
Level 3: Major impact and/or non-compliance

Environmental incidents – level 2

Business unit   Description   Receiving environment   Response



Excavator with hydraulic pipe burst. Oil spillage on both soil as well as water – ponding water collected in the excavation due to rain



  • Root-causes analyses performed
  • Audits performed
  • Risk mitigation plans implemented

Encroachment on a wetland by the stockpiling of topsoil from berm clearing of road D1110




Blockage of the Klein-Komati River by temporary road towards the pit areas




Additional tipping of topsoil on stockpile encroaching on a wetland adjacent to the D1110




Two graves covered by Dam 5 stockpile





On the 21st of June 2018 an employee from SCM informed the sustainability department at 7:30 about a large diesel spillage at the diesel bay. The spillage was next to an abandoned Andru Diesel bowser which was suspected to have been abandoned after the spillage occurred. It is estimated +- 900 litres of diesel was spilt on bare soil





Significant fire incident at reductants – plant shut down


Air and soil

Air quality

As a mining group, air quality remains a risk to Exxaro on several levels, particularly dust and other pollutants such as particulate matter (PM) including PM10 and PM2.5 from open-cast operations. Accordingly, we focus on:

  • Minimising impact on the receiving environment
  • Full legislative compliance
  • Air quality management planning
  • Risk management
  • Monitoring, measurement and reporting.

Air quality management initiatives

Objectives   Critical success factors   What   When   Progress

Compliant, sustainable air quality management system, operated and controlled by trained specialists at business units


Integrated air quality management planning in core operational processes


Baseline assessments

Impact assessments

Optimise monitoring programme


Third quarter 2019


Baseline assessments, impact assessments and ambient monitoring review completed in business units as part of group-wide air quality management initiative

Long and short-term goals for air quality management

Goals   Target   Progress

Initiating PM10 and PM2.5 at our business units (operational and greenfield projects for baseline data)


Third quarter 2019


Monitoring initiated as a priority in some business units and greenfield projects such as Belfast and Thabametsi

Initiating PM10 and PM2.5 monitoring for all business units (operational and greenfield projects for baseline data)


Fourth quarter 2019


Dust fallout networks redesigned in all business units and greenfield sites

Meteorological monitoring to ensure availability of surface data for temperature, wind direction, wind speed, and more. This data will be used for dispersion modelling, baseline characterisation, ambient monitoring, including dust fallout monitoring and reporting, etc


Fourth quarter 2019


Meteorological stations installed in business units such as Leeuwpan, Thabametsi and Belfast, with a commitment to purchase and install more in the remaining business units

Ensuring compliance to air quality standards and guidelines in the country




Most business units currently monitor dust fallout and PM10. Results are assessed for compliance to national dust control regulations and ambient air quality standards for PM10

Emissions from mining operations

Open-cast mining generates dust (blasting, drilling, crushing and screening, vehicle convoys, materials handling and wind erosion of exposed operational areas). Daily mitigation measures include applying chemical dust suppressants on haul roads, watering secondary unpaved operational roads, vegetating topsoil stockpiles and overburden material.

All our mining operations monitor dust fallout rates and results are assessed against residential and non-residential limits in national dust control regulations. Although our operations are classified under the non-residential limit, some are close to residential areas or sensitive receptor areas. As such, we track our compliance against the more stringent residential limit (600mg/m2/day) instead of the non-residential limit (1 200mg/m2/day) to minimise the impact on residents.

We continue to concentrate on improving our mitigation measures for operational activities that contribute significantly to dust. This will reduce dust impacts on sensitive receptors and ensure compliance.

Comparing Exxaro's dust fallout rate in 2018 against the regulated residential and non-residential limit, all operations were within allowable annual limits.

Dust fallout – 2018

Target 2018   2017 2016 2015 2014 2013 2012  
Coal: 300mg/m2/day 184   172 169 173 335 351 480  
Number of exceedances of the residential limit
(January to December 2018) (Number of exceedances)
  Number of exceedances of the non-residential limit
(January to December 2018) (Number of exceedances)

Climate change and carbon footprint


Definitions and context

Scope 1: Direct greenhouse gas (GHG) emissions, measured in tonnes of carbon dioxide equivalent (tCO2e) from sources owned or controlled by Exxaro, eg emissions from diesel, petrol, gas and anthracite combusted in day-to-day mining operations.

Scope 2: GHG emissions from electricity generation by Eskom, purchased by Exxaro.

Scope 3: Emissions outside our control but emanating from our products or activities, eg customer burning coal sold by Exxaro.

The scope 1, 2 and 3 emission protocol provides a common measurement platform to compare firms, aggregate data to national level and compare countries. South Africa has set arguably the most aggressive carbon abatement targets of any developing country: to reduce emissions by 34% below business as usual by 2020, and 42% by 2025.

Carbon footprint

Operational activities are guided by our climate-change response strategy. A steering committee oversees related improvement projects and activities, and ensures these are aligned with Exxaro's stance on climate change.

This supports a clear understanding of the risks and opportunities presented by energy and emissions in the broader sense, and enables operations to focus on managing energy, emissions and other climate change-related issues.

Our energy and carbon measurement, data management, accounting and reporting is maturing. Exxaro reports carbon emissions through CDP South Africa (the local arm of the international benchmark carbon and water disclosure projects), where we continuously report on scope 1, 2 and 3 emissions.

We base our accounting and reporting for GHG emissions on the Greenhouse Gas Protocol (www.exxaro.com) and have elected to use the operating control accounting approach for emissions.

GHG emissions

Arrows indicate movement from 2017

ktCO2e  2018     2017  2016  2015  2014  2013 
Scope 1  315     324.9  323  235.2  229.8  236 
Scope 2*  552     539  501  521.9  557.6  525 
Total scope 1 and 2  867     864  824  757.1  787.4  761 
Year-on-year change (%) 0.4     4.9  8.8  (3.8) 3.5  (48)
Scope 3**  72 928     76 462  71 697  73 847  74 768  69 737 
Year-on-year change (%) 4.6     2.7  (2.9) (1.2) 7.2  (1.3)
*Scope 2: Electricity-based emissions are derived from the grid emission factor for South Africa (0.97tCO2e/MWh).
**Scope 3: Reported emissions based on use of product sold by Exxaro. Reported emissions represent over 95% of Exxaro's scope 3 emissions.

Carbon emissions by source

Arrows indicate movement from 2017

ktCO2e  2018     2017  2016  2015  2014  2013 
Electricity  552     539  501  521.9  557.6  525.3 
Year-on-year change (%) 2.4     7.5  (4) (6.8) 6.1  1.2 
Source proportion (%) 64     62  66.5  68.9  70.7  68.8 
Diesel  217.5     211.3  168.2  174.8  155.9  157.8 
Year-on-year change (%) 2.9     25  (3) 10.8  (1.2) (4.2)
Source proportion (%) 25     24  22.1  23.1  20  20.8 
Fugitive emissions  93     94.6  84.9  56.6  67.6  77.9 
Year-on-year change (%) 1.7     11  50  (19.4) (5.8) (7.8)
Source proportion (%) 11     11  11  7.5  8.6  9.4 
Other sources  0.3     18.6  3.7  3.7  6.2  2.4 
Year-on-year change (%) 74     80  (40) 6.9  147.3 
Source proportion (%) 0.6     0.5  0.5  0.8  0.8 

Carbon disclosure

The CDP is a UK-based global climate change reporting system. This data provides valuable insights into corporate strategies and helps channel investment to companies adhering to sustainable carbon and emissions management.

Exxaro participates in two programmes: CDP Climate Change (since 2008) and CDP Water (since 2010). To facilitate our reporting under the climate change programme, we manage a central data repository that records energy consumption, energy intensity performance, carbon emissions measurement and cost performance in each business unit and the group. This database is externally audited and assured each year.

We remain focused on reducing Exxaro's carbon footprint in line with our commitment to reduce energy consumption and improve energy efficiency. Given the fast-changing legislative environment and promulgation of carbon tax from 1 June 2019, reducing GHGs is a business imperative as it could affect our financial performance.

2018 total GHG emissions by scope (tCO2e)

Arrows indicate movement from 2017

Business unit Scope 1 Scope 2 Scope 3 Total
Arnot 2 952.5 21 379.9 0 24 332.4
Durnacol* 100.6 104 0 204.6
Grootegeluk 164 589.4 370 036 50 349 047.3 50 883 673
Hlobane* 119 15.6 0 134.5
Leeuwpan 70 968 25 438.3 5 316 926 5 413 332
Mafube 16 082.5 15 446.2 1 923.4 1 954 954.9
Matla 35 929.5 102 585 11 995 701.8 12 134 216
North Block Complex 24 370.8 5 820.1 3 261 523.4 3 291 714
Reductants 151.7 0 81 322.8 81 474.4
Tshikondeni* 43.9 1 503.6 0 1 547.5
AlloyStream** 0 0 0 0
Corporate centre 1.4 992 0 993.4
FerroAlloys 103.12 8 736.3 0 8 839.4
R&D** 0 0 0
*Operations in closure.
**Closed operations.

Energy management

Diesel and electricity are the primary sources of energy for all our business units, at 59% and 41% respectively.

Total energy consumed rose 8% in 2018 to 4 977 270 gigajoules (GJ). The increase in diesel consumption is due to concurrent rehabilitation at operating mines and higher production at Grootegeluk and Leeuwpan. For Grootegeluk and Leeuwpan, the increase in production or change in mining has a direct impact on diesel and electricity consumption.

As part of Exxaro's energy and carbon management programme, our coal operations have focused on reducing energy consumption, including projects to specifically increase the efficiency of diesel and electricity consumption. The head office technology and engineering departments initiated projects to reduce diesel consumption at all our operations, including the use of fuel additives and payload management. Future projects include developing a consolidated dashboard for fuel and electricity in various business units.

We believe all these initiatives will support the transition of our operations to greater energy efficiency, characterised by low carbon footprints and optimised energy consumption.

To facilitate energy-saving initiatives, energy-intensity targets are set annually based on the prior two-year performance for each operation and monitored monthly. These targets were reviewed at the end of 2017 and long-term (five years) targets proposed. These will be implemented in the second half of 2019.

Although electricity and diesel consumption increased in 2018, electricity and diesel intensities declined, proving we are working more efficiently. Based on production tonnes in 2018, electricity intensity of 12.9MWh/kt declined 6% from 2017, while diesel intensity of 1 592l/kt was down 4%.

Electricity consumption in coal operations – 2018

Electricity (MWh) Production (kt) Electricity intensity (MWh/kt)
  2018     2017  2016  2015     2018     2017  2016  2015     2018     2017  2016  2015 
Coal  543 178     527 688  518 376  566 521     41 952     39 312  37 030  40 969     12.95     13.83  12.86  13.83 
Change (%)    1.8  (6) (3.2)       (10)    7.5  (13)
Arnot  22 041     26 967  29 394  49 742     –     –  –  1 401     –     –  –  35.5 
Reductants  –     –  –  –     –     86  54  48     –     –  –  – 
Durnacol  107     99  114  139     –     –  –  –     –     –  –  – 
Grootegeluk  381 480     358 101  335 041  341 932     29 698     25 538  22 601  25 554     12.85     14.02  14.8  13.4 
Hlobane  16     21  20  19     –     –  –  –     –     –  –  – 
Leeuwpan  26 225     25 242  25 951  27 037     4 220     3 355  3 774  2 202     6.21     7.52  6.9  12.3 
Matla  105 757     107 467  109 710  108 185     6 609     7 400  7 900  7 858     16     14.52  13.9  13.8 
North Block Complex  6 000     7 757  6 791  7 860     1 425     2 665  2 701  2 871     4.21     2.9  2.4  2.7 
Tshikondeni  1 550     2 034  2 747  4 538     –     –  –  –     –     –  –  – 

Diesel consumption in coal operations for 2018

Diesel (kl) Production (kt) Diesel consumption intensity (l/kt)
  2018     2017  2016  2015     2018     2017  2016  2015     2018     2017  2016  2015 
Coal  73 926     72 101  65 052  64 520     41 952     39 312  37 030  40 969     1 762     1 655  1 756  1 574 
Change (%)    10.8  10.9        (10) –        (5.8) 11.6  1.7 
Arnot  989     1 311  1 243  1 043     –     –  –  1 401     –     –  –  744 
Reductants  118     79  55  142     –     56  54  48     –     1 411  1 019  2 897 
Durnacol  27     25  38  43     –     –  –  –     –     –  –  – 
Grootegeluk  41 940     40 846  30 231  35 521     29 697     25 538  22 601  25 554     1 412     1 599  1 338  1 390 
Hlobane  33     40  39  36     –     –  –  –     –     –  –  – 
Leeuwpan  16 625     16 768  16 371  17 043     4 220     3 355  3 774  2 202     4 618     4 998  4 337  7 736 
Matla  2 503     2 550  3 071  2 677     6 609     7 400  7 900  7 859     379     345  389  341 
North Block Complex  8 609     10 462  9 867  8 121     1 425     2 962  2 701  2 871     6 041     3 956  3 653  2 828 
Tshikondeni     22  35  134     –     –  –  –     –     –  –  – 

Water management

Water is a strategic natural resource for South Africa and key to our business. The Exxaro water management policy defines our commitment to its sustainable use, with a strong focus on efficiency through reuse and recycling. This policy is aligned to the legislative environmental framework governed mainly by the National Water Act 36 1998. In support of the act, the Department of Water and Sanitation (DWS) has issued an integrated water resource management hierarchy that prioritises mine and waste management decisions and actions.

This hierarchy informs both our policy and strategy on mine and waste water management as:

  • Pollution prevention
  • Minimise environmental impacts
  • Maximise water reuse and reclamation
  • Responsible water discharge and disposal
  • Water treatment.

Translating policy into action, our management standard on water for mining and industrial use articulates our commitment to develop and implement an effective integrated water and waste management plan across the lifecycle of a mine. This includes planning, construction, operation, decommissioning, closure and rehabilitation phases. The standard reflects management's vision to:

  • Ensure a cost-effective integrated approach to water management
  • Be environmentally responsible
  • Be ecologically sustainable.

These management standards adhere to DWS best-practice guidelines on:

  • The integrated water and waste management plan
  • Stormwater management planning
  • Water and salt balances
  • Water-monitoring systems
  • Water reuse and reclamation
  • Pollution control dams
  • Water efficiency performance indicators.


Water management is integral to our licence to operate. The group water strategy was approved in 2017, aiming for excellence in the following focus areas:

  • Compliance
  • Operational water efficiency
  • Policies, standards and processes
  • Water technologies
  • Stakeholder partnerships.

A comprehensive programme is entrenching responsible and sustainable water management across Exxaro. It concentrates on relevant water-use and related risks – from security of supply to water efficiency and water-cost management – and manages these within current and anticipated regulatory compliance requirements. This is supported by continually enhancing our competence in water-management issues through company-wide research and skills development. We also reinforce awareness of water issues through ongoing communication and training.

We are managing water-related risks, minimising impacts, and operating efficiently through reduction, reuse and recycling. Most of our operations have water-conservation plans that support the national strategy to ensure equitable distribution of water resources that allows for business growth and protection (sustainable use).

We are also committed to protecting and improving the overall water quality by discharging treated water back into the system. Central to this are the two reverse-osmosis water-treatment plants in our Mpumalanga region as part of our long-term water management strategy. These plants have total capacity to treat 11.5 megalitres per day. The plant at Matla has been operational for three years while the plant at North Block Complex has been operational for two years.

We continue to collaborate with other mining houses and universities through the Coaltech research initiative. These research projects provide much-needed guidelines on sustainable mine-water management and mine closure. This will ultimately enhance the sustainable use of our water resources and final land-use planning.

The formation of the Mine Water Coordinating Body (MWCB) last year further strengthens our public-private collaboration by providing a platform to align our mine-water management plans with the national water resource strategy (NWRS2) and to investigate regional solutions in the Olifants River catchment of Mpumalanga.

Water-use monitoring and measurement

We maintain a centralised database on water consumption. Our water accounting methodology includes measuring water volumes and quality against efficiency and intensity targets, water-use permit conditions and internal benchmarks and trends. Our data also correlates to the reporting format of the annual submission to the CDP-Water.

The focus in 2018 was on setting site-specific targets for water intensity over a five-year period (to 2022), where water intensity is defined as total water withdrawals (excluding supply to third parties) from a resource (not recycled/reclaimed water) divided by run-of-mine (ROM), and is expressed as:

Water intensity = water withdrawals (m3)
ROM (tons)

Water intensity performance

Through water-conservation measures and raised awareness, all operations have reached the five-year target, except for North Block Complex's Glisa and Eerstelingsfontein mines. Exxaro reduced water withdrawals from Mokolo dam at Grootegeluk by increasing use of stored pit water in its processes as a temporary measure to reduce pit water levels.

Water-withdrawal performance

Business unit   Water sources   Target(ℓ/t)  
intensity (ℓ/t)   2018
  Water   withdrawals(kℓ)   2018  
Coal   200     109     8 683 275  
ECC Forzando North and South   Rain, external supplier   151     135     434 315  
ECC Dorstfontein East   Rain, external supplier   360     249     444 056  
ECC Dorstfontein West   Rain, municipal supply   134     98     99 172  
Grootegeluk   Rain, Mokolo dam   115     91     5 187 375  
Leeuwpan   Rain, boreholes   92     55     363 694  
Matla   Eskom supply   215     181     1 197 247  
North Block Complex: Glisa and Eerstelingsfontein   Rain   219     413     709 367*
*Due to the sale, data included up to September 2018

Hazardous waste management

Waste management is a key compliance indicator in Exxaro's social licence to operate. Our group standard enforces use of the waste management hierarchy, which in turn promotes waste prevention or minimisation, reuse, recycling, recovering energy and ensuring safe disposal of waste in line with the National Environmental Management: Waste Act 59 2008 and supporting legislation.

The total weight of hazardous waste generated at our managed coal operations in 2018 dropped 14% to 2 616 tonnes (2017: 3 058 tonnes).

2017 versus 2018 Q4 hazardous waste movement

Exxaro has submitted the Grootegeluk abatement plans for waste-tyre stockpiles as per requirements issued by the Department of Environmental Affairs (effective date: September 2017).


Biodiversity means species diversity and species richness in an ecological environment. In Exxaro, our goal is to conserve biodiversity for future generations by sustainably using the resources of our mining operations and South Africa's natural resources.

To reach this goal, we have developed biodiversity action plans for our business units. The guiding principles include the best-practice standard on wetland offsets (Wetland Offsets: A Best Practical Guideline for South Africa 2014), as well as the mining and biodiversity guideline (Mainstreaming biodiversity into the mining sector. DEA, DMR, Minerals Council, SA Mining and Biodiversity Forum and SANBI, 2013).

An investment was made in 2018 on wetland rehabilitation and on biodiversity management, including wetland offsets, delineation and wetland studies, as well as biomonitoring.

In addition to complying with legislation and best practice, we aim to develop a competitive advantage through conservation and re-establishing resilient ecosystems that underscore our commitment to duty-of-care principles.

The principles of these guidelines are already incorporated into our planning and execution phases. As example, the principles of best-practice standard were used in several projects to avoid constructing infrastructure in a sensitive wetland area.

Our detailed management standard guides business units in developing infrastructure, aiming to:

  • Ensure a cost-effective integrated approach to biodiversity management
  • Be environmentally responsible in protecting and managing biodiversity
  • Be ecologically sustainable by ensuring biodiversity-rich areas are contained within mining right areas, to manage and monitor protected and threatened Red Data species, and control declared category 1, 2 and 3 invasive plants.

Exxaro has evaluated and identified all protected vegetation units with important conservation targets and listed as protected by the national spatial biodiversity assessment report.

Exxaro also references the mining and biodiversity guideline (M&BG, 2013), the Mpumalanga biodiversity sector plan (2014), and the national freshwater ecosystem priority areas (NFEPA 2011) guidelines during proposed expansion and new projects. Information from these guidelines is considered during desktop ecological and wetland studies and includes detailed site-specific assessments to confirm the accuracy of the guidelines.

Any negative impact on biodiversity reduces the ability of communities to gather biological resources, produce biomass, decompose and recycle essential nutrients. There is increasing evidence that biodiversity increases the stability of ecosystem functions through time.

Climate change is also a major threat to global biodiversity: rising atmospheric carbon dioxide and therefore temperatures will affect species ranges, seasonal growth cycles and weather. Major extinctions are predicted as climate change drastically alters the biology of many species.

Environmental liabilities and rehabilitation

Internal annual updates

All business units annually review their financial provisions. They also consider amendments to rehabilitation plans and closure objectives based on regular EMP performance assessments.

The cost estimates of activities in the concurrent and final-closure rehabilitation programme are reviewed and adjusted where necessary. The provisions are audited biannually by Exxaro's external auditors through physical site visits and document reviews.

The financial provisioning regulations (GNR 1147) were published in December 2015. In September 2018, the department published an amendment that extended the transitional period to February 2020. Exxaro appointed external consultants at all operations to complete reports and calculations as required by GNR 1147. These reports will be finalised in 2019 for submission in 2020.

Annual process

Concurrent rehabilitation plans

All business units have a five-year concurrent rehabilitation schedule and associated budget:

  • The schedules set measurable targets for each mine
  • Schedules prevent backlogs building up, increasing liabilities
  • Budgets enable managers to implement plans without cash flow constraints
  • Concurrent rehabilitation forms part of operational tracking.
Land disturbed versus land rehabilitated (ha)   Land disturbed versus rehabilitated (ha)


At 31 December 2018, total land disturbed was 9 559ha and total rehabilitated 2 469ha. The Exxaro Environmental Rehabilitation Fund (EERF) and ECC trust fund provide for a portion of these liabilities, while additional bank guarantees are taken out to provide for new developments and cover any shortfalls in financial provisions. The EERF's assets are managed in an asset-and-liability modelling process that aligns the risk/return profile of the assets to the liability profile of the mines. This is done at site level, leading to each site having a specific allocation to the different asset profiles. The objective is to maximise the contribution of investment growth to the overall cost of funding for the liability provisions. An external specialist supports EERF trustees with the technical skills required for profiling and in identifying suitable structures for assessment by the trustees. Current implementation includes:

  • Two income building blocks benchmarked to cash rates and investing in government treasury bills, bank and corporate paper
  • Three growth building blocks targeting inflation-linked returns and investing in insurance and bank guaranteed products
  • Equity-driven portfolios without explicit investment guarantees but where the portfolio manager controls capital risk by managing portfolio volatility.

Quarterly contributions to the trust are based on closure cost estimates at life of mine without considering any guarantees in place.

The trust funds earned R146 million in 2018, including cash contributions, interest earned on investments and fair-value adjustments. The fund has recorded 9% growth from an opening balance of R1 636 million in January 2018 to R1 782 million in December 2018. In addition, the group had bank guarantees of R2 971 million in place at year end. Updating these provisions biannually highlights potential rehabilitation alternatives that could decrease the long-term closure liabilities of mines.

Estimated closure costs per mine

The quantum for environmental contributions is calculated, based on relevant legislation, by both internal and external specialists:

  • The Exxaro team comprises members of our sustainability department with expertise and experience in various fields of environmental management, as well as members of our finance department
  • We often use independent external technical and financial specialists. In 2018, the quantum of all our operations was calculated by these specialists.
Mines as per AFS at
31 December 2018
DMR office  Estimated  immediate  closure cost 
Estimated  residual  liability 
Trust fund  balance 
Immediate  shortfall to be  covered over  remaining life  of mine 
   Remaining  life (years)   
Grootegeluk mine (including reductants area) Limpopo  3 168  211  486  1 226  1 667     45    
Thabametsi  Limpopo  885  (885)    45    
Paardeplaats  Mpumalanga  88  (88)    –    
Belfast  Mpumalanga  37  133  (94)    18    
Leeuwpan MR 157 and 171  Mpumalanga  548  11  87  277  195     17    
Dorstfontein East  Mpumalanga  675  83  117  641       
Dorstfontein West  Mpumalanga  85  165  87  55  107     14    
Forzando North  Mpumalanga  54  88  75  67       
Forzando South  Mpumalanga  154  16  59  59  52     24    
Tumelo  Mpumalanga  12  (6)    –    
Operational mines  4 729  577  924  2 726  1 656    
Arnot  Mpumalanga  1 123  745  268  28  1 573     –    
Matla  Mpumalanga  334  47  81  130  171     21    
Eskom tied mines  1 457  792  348  158  1 743    
Durnacol  KZN  100  106     –    
Hlobane  KZN  44  51  95     –    
Tshikondeni  Limpopo  48  28  174  49  (147)    –    
Inyanda  Mpumalanga     –    
Glisa  Mpumalanga  216  (216)    –    
Strathrae  Mpumalanga  27  68  90     –    
Eerstelingsfontein  Mpumalanga  (3)    –    
Newcastle  KZN     –    
Gravelotte  Limpopo  35  (33)    –    
HQ – inactive sites  36  10  30  15     –    
Closed operations  262  165  510  87  (170)   
Total Exxaro  6 338  1 533  1 782  2 971  3 229        

Mine closure

Exxaro had six operations in active closure in 2018 – Arnot, Tshikondeni, Durnacol, Hlobane, Strathrae and Gravelotte. Understanding that operational closure, concurrent rehabilitation and land management activities directly link employees, community, environment, government and infrastructure, we are committed to:

  • Ensure the operational closure process is conducted inclusively and within the legal framework
  • Leave behind a positive legacy of alternative sustainable land use for our employees and local communities
  • Proactively manage environmental impacts to minimise residual liabilities
  • Allocate required financial resources to ensure this process is concluded
  • Manage Exxaro land against to an agreed strategy.

Our closure-planning process is illustrated below:

Integrating stages of mining and mine-closure planning

Operational closure, concurrent rehabilitation and managing the land where our operations are currently located is part of our operating philosophy and moral responsibility. We actively plan our operations with closure in mind and ensure we have adequate financial resources to meet our rehabilitation commitments.

We strive to integrate land, rehabilitation and liability management in day-to-day mine planning, aiming to minimise final closure costs for each operation and optimise final land use after closure.

Social closure principles

While most closure planning relates to technical or engineering issues and the associated financial planning, social aspects are the most important part of mine closure. This includes aspects such as:

  • Equipping employees with portable skills to pursue alternative employment and participate in meaningful economic activity
  • Develop and implement a communication plan for employees
  • Effective training for staff on their roles and responsibilities in implementing and managing the mine closure plan
  • Communities will be affected by mine closure - while they may not be directly affected by environmental management strategies, health and safety issues and possible employment opportunities related to proposed strategies should be considered
  • Socio-economic activities around the mine need to continue in its absence
  • Conducting socio-economic impact assessments to identify the needs and expectations of all relevant stakeholders as well as economic impacts
  • Assisting members of host communities affected by closure to acquire skills to participate in economic activities and provide the opportunity to use infrastructure not needed by the mining operation for their benefit
  • Ensure communities have the opportunity to maintain, but preferably improve, their quality of life
  • Align the closure process with community expectations. The closure plan must be in line with the requirements of that mine's social and labour plan, developed in terms of section 25 of the MPRDA
  • Develop and implement an engagement plan for all relevant stakeholders (community, government, NGOs and others)
  • Assist mine owners/operators achieve liability-free closure within a reasonable timeframe
  • Effective implementation of the closure plan requires company and management commitment.

Mineral resources and reserves

Please refer to our comprehensive mineral resources and reserves report on our website.