Exxaro Resources Limited
Environmental, social and governance report 2022

Investment committee report

Dear shareholders,

I am pleased to present the investment committee report, working to responsibly further the strategic objective of transitioning at speed and scale in support of Exxaro's purpose and vision, for the year ended 31 December 2022.

Key highlights of 2022

The committee:

  • Set internal guidelines to guide management in considering each investment case brought to the committee
  • Monitored progress in the implementation of the Lephalale solar project
  • Monitored the Leeuwpan divestment as part of Exxaro's ongoing portfolio optimisation strategy. Unfortunately progress in the divestment stalled and the process stopped in the third quarter of 2022 to ensure stability at the mine. Exxaro will continue to review its coal assets and projects in line with its strategic objectives

Role and purpose

The committee has an independent role in terms of which it operates and makes recommendations to the board, monitors on behalf of the board and reports to the board on material acquisition, merger/investment or disposal opportunities, and ongoing material transactions and related matters in the scope of the approved energy and minerals sustainable growth strategy, including ongoing portfolio management of these businesses, existing and post-investment reviews and management.

Isaac Mophatlane
Investment committee

Isaac Mophatlane

The committee's role is to review the strategic fit and risk appetite, and financial, technical and legal due diligences for major investments. It shall further ensure adherence to all Exxaro's governance processes at all times and that the approved hurdle rates, set from time to time, are met before any funds are committed. An investment opportunity will therefore first serve at the investment committee where a detailed review shall be conducted in line with the investment criteria approved by the board. After the review, the investment opportunity may be recommended by the committee to the board for final approval.

The committee's role expanded in 2022 to include consideration of Exxaro's capital allocation strategy.


Committee members are appointed by the board, on recommendation of the nomination committee, and ensure there is a balanced blend of skills and experience so that the committee is able to discharge its function.

For the year under review, the committee had five independent non-executive directors and two non-executive directors. The board is satisfied that the committee members have the necessary experience. The committee welcomed the appointment of Billy Mawasha as a member of the committee with effect from 7 February 2022.

The CEO, FD and managing director: minerals attend investment committee meetings as standing invitees. Other members of the executive team and senior managers representing areas relevant to investment committee discussions attend meetings as and when required.

 Refer to board of directors for members' qualifications and experience.

Gender and racial diversity

Gender and racial diversity


The committee held three scheduled meetings during 2022 and five special meetings. The committee's satisfactory attendance illustrates high levels of engagement by committee members.

The following table provides an overview of designations and members' attendance at meetings during the period under review:

Members Designation Attendance at four quarterly meetings Attendance at one special meeting
Isaac Mophatlane Independent non-executive director and chairperson 3/3 5/5
Billy Mawasha Independent non-executive director 3/3 2/4*
Isaac Malevu Non-executive director 2/3** 2/5**
Mandlesilo Msimang Non-executive director 3/3 5/5
Chanda Nxumalo Independent non-executive director 3/3 5/5
Vuyisa Nkonyeni Independent non-executive director 3/3 3/5
Peet Snyders Independent non-executive director 3/3 5/5

*Billy Mawasha appointed member with effect from 7 February 2022 and was recused from one special meeting.
** Isaac Malevu was recused from three special meetings.

Terms of reference

The committee's terms of reference were reviewed and are aligned with legislation, regulations and King IV. The committee is satisfied that it has conducted its affairs and discharged its responsibilities in accordance with its terms of reference.

2022 in review

The committee oversaw the following during the year under review:

  • Divestments: The committee received updates on ongoing and proposed divestments in line with Exxaro's strategy
  • Acquisitions: The committee considered potential acquisitions by the energy and minerals business in line with Exxaro's strategic objectives
  • Governance: The committee reviewed its terms of reference
  • Investment framework: To ensure it fulfils its role, the committee considered a framework that would serve as a guideline for presentations of investment and acquisition opportunities

Key focus areas for 2023

The committee identified the following key focus areas for 2023:
Continue to monitor and oversee divestments and acquisitions
Review and recommend for approval investment guidelines for energy and minerals businesses
Monitor the energy and minerals strategic KPIs and dashboard
Review the discount policy and the weighted average cost of capital

Performance evaluation

During the period under review, an independent evaluation of the performance and effectiveness of the board, its committees and specific individuals was conducted. The purpose was also to identify and record possible areas in need of strengthening and/or refinement while considering internal and external dynamics, and factors that may positively or negatively impact the board's ability to enhance its performance and effectiveness. From the evaluation report, an action plan was developed and its implementation will be monitored by the nomination committee.


The committee, in carrying out its duties, has due regard of its terms of reference and the principles and recommended practices of King IV. The committee is satisfied that it has considered and discharged its responsibilities.

The committee would like to thank management for all the hard work during the year under review.

On behalf of the investment committee

Isaac Mophatlane
Investment committee chairperson
14 April 2023

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Appendix A: Criteria