Exxaro Resources Limited
Environmental, social and governance report 2022

Stakeholder management

Our business has maintained satisfactory success during a difficult period, which can be, in part, attributed to our strengthening stakeholder relationships. As evidenced by a recent stakeholder survey, relationship strength varies among our stakeholders but is generally higher and comes with commensurate high expectations.

We see our stakeholder relationships as critical enablers of sustainable development and business success. It is through collaborative and mutually beneficial partnerships with our stakeholders that we are able to leverage opportunities, mitigate risks, and respond to issues facing our business in a just, responsible and effective manner.

Our approach to stakeholder engagement

The operating environment is increasingly "noisy" – characterised by loud demands for service delivery and the creation of employment opportunities so as to push out an inch of social progress; an incoherent political context that is creating policy uncertainty; geopolitics and economic and market volatility that has societies screaming for help as livelihoods are threatened by inflation. More and more, business is called upon to intervene and apply its resources to the advantage and benefit of community and society. We have found it possible to respond through intentional engagement. Intentional engagement is the alignment of our thoughts, decisions, actions (and excepted outcomes) when interacting with our stakeholders. This has been our approach since 2017 to guide mutual value creation with stakeholders.

Structure for intentional engagement

Our stakeholder engagement procedures clarify the reasons for, methods and monitoring of relationships and are supported by our stakeholder engagement policy, plans, principles and key account management (KAM) approach. The KAM approach is strategy-led and outcomes-driven, ensuring we address stakeholder issues, manage risks, leverage opportunities and deliver on our strategic objectives.

For more detail on the KAM approach, refer to Key strategic trade-offs of Exxaro's 2019 integrated report

Our stakeholder engagement plans are aligned with our strategy and include levels of accountability, material issues and risks, and enable us to track feedback, and monitor and report on our performance. We regularly update these plans to ensure they are fit for purpose.

We ensure the effectiveness of engagement by conducting assurance and audits on our procedures. Exxaro's board and executive committee are responsible for stakeholder management and engagement.

We conducted our first reputation tracking survey in 2022 following a baseline study in 2018 with the objective of understanding our evolving landscape of stakeholders, their needs and expectations and our actions towards these expectations. The survey results provided an understanding of prevalent reputation and stakeholder sentiment. Against the 2018 baseline, results showed that Exxaro improved its position as reputational leader in the mining sector and overall sentiment among all stakeholders remained positive, despite a decline among community stakeholders. However, we identified that, as we transition into a low-carbon business, we must engage more and strengthen our relationships further with our stakeholders. The survey results identified issues, needs and interests for us to engage on with each stakeholder group. We have since developed targeted response plans.

Case study (integrated report)

Stakeholder universe

We use our ERM process, regular BU planning, and project workshops to identify and analyse our stakeholders, assessing the impact of our activities on them, and their impact on our ability to deliver on our strategy, contribute to our ESG performance and address risks. We categorise our stakeholders into four main clusters of government, communities, business and value chain participants and identify relevant engagement objectives and strategies as required.


  • Governmental departments
  • Local governments
  • Political parties
  • Provincial government
  • District municipalities
  • Regulators


  • Local media
  • Faith-based organisations
  • Taxi associations
  • Farmers and landowners
  • Other mining companies
  • Local small, medium and micro-enterprises (SMMEs)
  • Communities
  • Local leadership
  • Local schools


  • Non-governmental organisations (NGOs)
  • Media
  • Professional industry bodies
  • Other mining organisations
  • Universities
  • Financial community
  • Non-profit organisations

Value chain participation

  • Unions
  • Investors
  • Strategic suppliers
  • Partner in delivery
  • Sponsors
  • Customers
  • Employees
  • Service providers

Quality of relationship

The management and quality of our relationships with stakeholders impact Exxaro's ability to deliver on our strategy. We measure the quality of relationships through different assessments (such as reputation, baseline and culture surveys or self-assessments) and our engagement strategies, which include stakeholder feedback and response strategies.

No existing relationship or the relationship has
No existing relationship or the relationship has challenges
No existing relationship or the relationship has
Established relationship but can be improved Good relationship with opportunity for improvement
No existing relationship or the relationship has
Very strong relationship based on mutual trust and respect

GovernmentGovernment Social

Stakeholders in this category include the Department of Public Enterprises, Department of Health (DoH), dtic, Department of Cooperative Governance and Traditional Affairs (CoGTA), Presidency, Parliament's Portfolio Committee on Agriculture, Land Reform and Rural Development, Mpumalanga and Limpopo offices of the Premier, Emakhazeni local municipality, local ANC structures, Transnet Freight Rail (TFR), Industrial Development Corporation of South Africa (IDC), South African Local Government Association, Municipal Infrastructure Support Agent and Mpumalanga Economic Growth Agency.

Engagement purpose

  • Collaborate to find solutions for socio-economic challenges
  • Partner in mutually beneficial projects
  • Participate in shaping policies
  • Invest in South Africa's socio-economic development
  • Support our efforts in driving business resilience and managing country risk
  • Demonstrate our ESG performance and how Exxaro responds to ever-increasing demands, responsible environmental management and community commitments through improved communication

Engagement methods

  • One-on-one in-person and virtual engagements
  • Dialogue platforms
  • Events and sponsorships
  • Quarterly reports

Stakeholder expectations and issues

  • The role of big business in solving broader societal issues
  • Responsible water management, minimising environmental impact and overcoming climate change issues
  • Community-related actions around post-mine business, job development and broader community upliftment*
  • Innovation and industry thought leadership
  • TFR performance
  • Support with COVID-19 response strategies and vaccination drives
  • B-BBEE level – NPAT impact
  • Socio-economic development*
  • Municipal service delivery*
  • Local procurement*
* This is a multi-stakeholder issue. Refer to the communities table for information.

Our response

We have several partnerships and initiatives that enable us to address government's expectations. These include:

  • SLP development consultation and regular project collaboration
  • Engaging the Presidential Climate Change Commission regarding our just transition response strategy
  • Improving disclosure in our annual reporting suite
  • Refining and consolidating our Sustainable Growth and Impact strategy and developed our Social Impact strategy
  • Supporting the health departments in Limpopo and Mpumalanga on COVID-19 response strategies, including the vaccine and booster vaccine roll-out programme
  • Engagement with the dtic regarding changes in NPAT and double treatment of dividend income
  • Continued engagements with CoGTA and the South African Local Government Association to find innovative responses to address service delivery challenges at local government level
  • Regular engagement with the provincial leadership of Limpopo and Mpumalanga to discuss development priorities and provide feedback on Exxaro's socio-economic development initiatives

Outcomes and value delivered Outcomes and value delivered

  • Contributed R13.38 million through SLP projects, particularly infrastructure, skills, local procurement and SMME development
  • Corporate social investment (CSI) (including disaster relief): R167.93 million
  • Committed R3.5 million over two years to government's anti-gender-based violence (GBV) fund
  • Paid R8.9 billion in tax: PAYE of R1.6 billion and company tax contributions of R7.3 billion

RegulatorsRegulators Environment

Exxaro aims to go beyond compliance when conducting our business activities. Stakeholders include Department of Mineral Resources and Energy (DMRE), Department of Water and Sanitation (DWS), the Department of Forestry, Fisheries and the Environment (DFFE), Department of Employment and Labour (DEL) and the JSE.

Engagement purpose

  • Manage compliance with regulatory requirements for business sustainability
  • Maintain strong relationships with stakeholders at national and provincial level
  • Collaborate in shaping policies
  • Ensure the success of our current and future businesses
  • Communicate and demonstrate how we respond to issues important to government, industry and society while delivering on our purpose

Engagement methods

  • One-on-one in-person and virtual engagements
  • Dialogue platforms
  • Quarterly reports where required

Stakeholder expectations and issues

  • Improve communication on plans and strategies
  • Delay in Matla IWUL renewal
  • Belfast discard dump lining
  • Rehabilitation of dumps 4 and 5 at Grootegeluk

Our response

  • Quarterly reporting as required
  • Improved compliance and risk mitigation through internal auditing processes, strategies and management controls
  • Appealed the DWS's decision not to renew Matla's IWUL at the Water Tribunal. The appeal suspended the decision and Matla IWUL remains valid and operational until the appeal is concluded
  • Continued investigating alternative solutions to dump lining at Belfast
  • Continued engagement with the DMRE regarding Grootegeluk dumps 4 and 5 rehabilitation. The matter is not yet finalised
  • Monitoring developments in the implementation of voluntary global standards for ESG reporting
  • Monitoring the process towards the finalisation of the Companies Amendment Bill

Outcomes and value delivered Outcomes and value delivered

  • Good compliance performance
  • No regulatory stoppages
  • Since the introduction of the internal section 54 standard, there has been a decline in the number of safety stoppages: seven in 2019, three in 2020, two in 2021 and none in 2022
Grootegeluk protest

EmployeesEmployees Employee engagement

Understanding our employees' needs and expectations is linked to our success. Employees see us as an agent of change.

Engagement purpose

  • Identify opportunities to collaborate on and co-create solutions with employees
  • Demonstrate our progress against goals through regular communication
  • Align employees' focus, profile and development efforts with our strategy and culture
  • Empower employees to manage change through information sharing and capabilities training
  • Identify opportunities for skills development as we transform and transition our business
  • Strengthen our culture
  • Distinguish competitive advantage
  • Promote resilient business performance

Engagement methods

  • Daily, weekly, monthly and quarterly meetings
  • Newsletters
  • Digital engagement through short videos, information screens, emails, bulk SMS and BU-specific communication campaigns
  • LetsConnect mobile platform
  • CEO roadshows
  • Ad hoc and annual communication campaigns
  • Training initiatives
  • Performance management and KPI setting

Stakeholder expectations and issues

  • Improved employee relations and relationship management
  • Better communication, reciprocal dialogue and including employees in decisions that affect them
  • Focus on improving diversity, equity and inclusion
    • Clear B-BBEE implementation and commitment
    • Support women in business and women in the workplace
  • Talent management
    • Fairness in promotion processes and effective reward systems
    • Skills development, including mentorship and longer-term support
    • Youth development programmes and job opportunities
  • ITangibly demonstrate how we are addressing environmental, community, employee and diversity issues (broader social issues)
  • Maintain high health and safety standards

Our response

  • Developed our Social Impact and diversity, equity and inclusion strategies
  • Human rights policy approved
  • Ongoing communication of Exxaro's decarbonisation plans
  • Our 2022 internal communication plan addressed our evolving group strategy, ESG priorities, the CEO transition, group STI scheme, community and enterprise and supplier development (ESD) initiatives, mental health and wellbeing, and diversity, equality, inclusion and social justice
  • Zero tolerance approach to any form of harassment in the workplace
  • Launched a GBV campaign to encourage employees to report harassment
  • Reported cases of sexual harassment are investigated and strict remedial action taken, including dismissal
  • We aim to intensify our engagement efforts by executing our employee engagement strategy and demonstrating how we are delivering on our purpose. We are also incorporating the results of the reputation survey into the employee value proposition to ensure response plans address employee needs and expectations

Outcomes and value delivered Outcomes and value delivered

  • Paid R4.4 billion in employee salaries, wages and benefits, including GreenShare employee scheme
  • Our LTIFR was below our target of 0.06
  • 90.05% of employees and contractors were vaccinated against COVID-19

Labour unionsLabour unions Employee engagement

Our collaborative relationship with labour unions is critical to ensure successful employee relations. Exxaro has a pluralist approach to union recognition but only formally engages with unions where recognition agreements have been concluded and these unions maintain their collective bargaining rights. These stakeholders include elected officials of recognised labour organisations at BU level and provincial or regional level (National Union of Mineworkers (NUM), National Union of Metalworkers South Africa (NUMSA), Association of Mineworkers and Construction Union (AMCU), Food and Allied Workers Union (FAWU)).

Engagement purpose

Through engagements, relationship building and collaboration with labour unions, we aim to better understand their objectives to ensure fair labour practices, minimise the risk of labour unrest and maintain workplace harmony. This enables us to proactively resolve issues or concerns and keep engagements functional.

Engagement methods

  • Quarterly face-to-face meetings at employer level (EC and ECM) and monthly at BUs

Stakeholder expectations and issues

Our labour unions recognise our commitment to our employees, our high health and safety standards and our efforts to realise our purpose of powering better lives in Africa and beyond. We could, however, increase communication on our current performance, future plans and approach to addressing employee-related issues such as diversity, learning and development, reskilling the workforce and post-mine business development, among others.

Our response

Exxaro has a pluralist approach to union recognition but only formally engages with unions where recognition agreements have been concluded and these unions maintain their collective bargaining rights.

Our Social Impact and diversity, equity and inclusion strategies respond to labour union expectations. We regularly engage with unions at the BUs about our approach to improve the lives of our communities.

The wage agreements signed in 2021 are effective for three years, securing labour stability. This includes a full-time shop steward agreement with NUM ECM and a review of the ECM recognition agreement.

We also continued our efforts to address innovation issues and challenges at BU innovation forums.

In 2022:

  • We addressed an issue with NUM on the secondment agreement of full-time shop stewards to the region. We await NUM's response
  • Continued addressing innovation issues at BU innovation forums
  • Developed our Social Impact and diversity, equity and inclusion strategies
  • Continued engagement about our approach to improving the lives of our communities at BU union engagements
  • Signed full-time shop steward agreement with NUM ECM
  • Concluded the review of the ECM recognition agreement

We aim to improve communication on our environmental stewardship and diversity activities as well as by sharing what we are doing with regards to innovation, SLP delivery and procurement.

Outcomes and value delivered Outcomes and value delivered

  • Well-established engagement and communication structures
  • Union input on business growth strategies
  • Training and development
  • Regulatory compliance ensures unions are able to negotiate fairly and equitably with Exxaro on behalf of their members

CommunitiesCommunities Communities

We operate in four local municipalities in Limpopo and Mpumalanga, with closed mines in three other municipalities, including two in KwaZulu-Natal. Our operations therefore affect communities within these areas, making them one of our key stakeholders.

Engagement purpose

  • Demonstrate and communicate how Exxaro is sharing economic gains fairly with our host communities through local employment, local procurement, community development initiatives, skills development, ESD (shared value narrative)
  • Build relationships and understanding of community needs to enable collaboration and success of community projects
  • Proactively resolve issues raised by stakeholders before protests emerge (risk management)

Engagement methods

  • Quarterly stakeholder engagement forums
  • Participation in district and provincial level engagement platforms
  • Socio-economic impact assessments every five years
  • Quarterly external BU newsletters
  • Community protests at mine

Stakeholder expectations and issues

  • Local procurement and sustainable job creation
  • Learning and development, including youth empowerment, scholarships and learnerships
  • Socio-economic, local and supplier development, including support for and empowerment of women-owned businesses and other local SMMEs
  • Road and recreational facility infrastructure
  • Municipal service delivery including water systems improvement
  • Transformation and gender equality

Our response

  • Continued engagements with communities and local municipalities through existing platforms such as stakeholder engagement forums to address local recruitment and procurement expectations. In the first quarter of 2022, additional engagements were held with the Emalahleni mayor and municipality to address protests and seek common ground to resolve issues
  • Held our second annual community stakeholder engagement days in Mpumalanga and Limpopo
  • Initiated engagements with key representatives of CoGTA with the objective of strategic alignment on supporting socio-economic development in traditional authority areas. An invitation was received for Exxaro to present at a sitting of the house of traditional leaders
  • A Grootegeluk procurement process to appoint a new social facilitator experienced intense political interference while the supplier appointed to temporarily fill the gap for local verification services was also the target of threats. We continue to adhere to strict processes and standards to manage such risks
  • Developed our Social Impact strategy
  • Ongoing identification and development of impact projects
  • Continued efforts to reflect the diversity of South Africa in SLP projects, including education, as beneficiaries or development partners

We aim to improve communication on our business activities, and demonstrate what we are doing to address social issues through our Social Impact strategy as well as environmental stewardships, post-mine closure and other stakeholder issues.

Outcomes and value delivered Outcomes and value delivered

  • Contributed R178 million (including donations) to communities, especially our host communities in Limpopo, Mpumalanga and the Eastern Cape
  • Our NPC, Matla Setshabeng, donated R127 million
  • Invested R13.3 million in SLP infrastructure projects which benefited 83 people through temporary construction jobs and 87 444 people through providing water, sanitation, sports facilities, etc
  • Education projects and support programmes to the value of R61 million benefiting more than 25 000 learners
  • Employed 685 local people from skilled, semi-skilled and labour categories over and above the core skilled employees from core (main) contracting companies during the execution of our R5.2 billion coal capital expansion programme at Matla (MLOMP)
  • Our ESD programme approved R291.2 million in the form of grants and loans to 30 entities
  • Total procurement spend on local SMMEs increased from 11.3% in 2021 to 11.5%, exceeding our target of 10%. Through this focus on local businesses, Exxaro empowered 401 local suppliers and 246 local black-owned SMMEs

InvestorsInvestors Chairperson's report Measuring our performance Our strategy Remuneration report

Stakeholders include shareholders and analysts. Our shareholding split is 77% South African and 23% offshore. We engage with ESG ratings agencies such as FTSE Russell, MSCI and Sustainalytics.

Engagement purpose

  • Our engagements aim to keep shareholders informed about our strategy, performance, capital allocation, and dividend, remuneration and other governance policies to maintain reputation and promote our ESG performance
  • We aim to demonstrate how we protect returns, prudently allocate capital and ensure transparency, all of which strengthens our ability to access capital
  • We engage with underweight investors to better understand their position in Exxaro and investment criteria
  • Engagement with ESG ratings agencies enables our understanding of how we need to improve our strategy and overall ESG ratings that inform perceptions of our performance

Engagement methods

  • Interim and annual results presentations and roadshows
  • Finance director's pre-close message and calls
  • Annual non-deal and governance roadshows
  • Capital Markets Day every second year
  • Underweight and non-investor engagements
  • Conferences
  • Solicited meetings
  • AGM
  • Annual investor perception survey

Stakeholder expectations and issues

  • Diversifying and decarbonising our portfolio remain top of mind for investors
  • The impact of climate change activism amid calls for withdrawal from the thermal coal business
  • Capital allocation and expenditure
  • Delivering on our ESG commitments and targets
  • Changes to our remuneration policy
  • Providing robust disclosure on how we are addressing ESG issues such as social issues and commitment to climate issues, minimising environmental impacts and protecting biodiversity

Our response

  • We presented our refreshed capital allocation model and clarified the changes made to the remuneration policy during a governance roadshow in September ( governance roadshow)
  • We have considered investors' feedback in our reporting suite and implemented some of these suggestions that would add to the credibility, transparency and robustness of our reports

We will continue to proactively inform and engage regularly with investors with the objective of eliminating ambiguity on our strategic direction, demonstrate how it will make Exxaro more resilient, communicate the successes of our early value coal strategy, and better articulate how Exxaro is proactively addressing societal issues, social injustice and economic inequality through our social impact and diversity, equity and inclusion strategies.

Outcomes and value delivered Outcomes and value delivered

  • Delivered a dividend pay-out of R6.686 billion (the total dividend distribution for the year is R27.68/share)
  • Received several acknowledgements of our ESG performance, including the Sunday Times Top 100 company (fifth) and leading mining company in the FTSE Russell index

CustomersCustomers Operational performance

We have domestic and offshore customers in Europe, Asia and other markets. Eskom remains our largest customer with 75% of our sales (2021: 71%). ArcelorMittal South Africa remains critical to our metallurgical coal sales.

Engagement purpose

  • Understand customers and strategic partners' requirements through ongoing discussions on environment, trends and market sentiment analysis
  • Foster mutually beneficial relationships through continuous engagement and information sharing
  • Improve operational and financial performance
  • We aim to understand our customers and strategic partners and foster mutually beneficial relationships through continuous engagement and information sharing. Engagements focus on the environment, trends and market sentiment, exploring future relationships, and improving operational and financial performance

Engagement methods

  • Outbound marketing
  • Email correspondence
  • Meetings at different levels in respective customer organisations
  • Marketing conferences

Stakeholder expectations and issues

  • Quality, consistent and reliable supply of product and responsive service
  • Improved communication and demonstrations of our approach to solving societal issues, improving the lives of our communities, minimising our environmental impact, becoming climate resilient and addressing climate change issues

Our response

During 2022 we engaged regularly with customers on strategic and operational issues and responded to market concern around logistical constraints.

We aim to improve how we communicate Exxaro's business performance to customers and demonstrate what we are doing to address societal issues, mitigate environmental impact and address climate change.

Outcomes and value delivered Outcomes and value delivered

  • Safe production
  • Reliable and continuous supply of coal to all customers in terms of quantity/volumes, quality and affordability
Coal transportation at Exxaro

SuppliersSuppliers Supply chain sustainability

Suppliers are crucial participants in our value chain. We have over 2 500 vendors in the provinces where we operate. We categorise our suppliers as strategic, SMMEs and local.

Engagement purpose

We manage our relationships with suppliers, as part of our risk management approach. Engagements are aimed at achieving mutually beneficial operational, strategic and impact goals through joint initiatives aimed at cost savings, sustainability, supply security and business risk exposure mitigation.

Engagement methods

  • Direct, proactive engagement with strategic suppliers
  • Ad hoc contract reviews to assess performance and negotiate price
  • Quarterly contractor forum platform to share information on developments in Exxaro and safety, health and environmental issues

Stakeholder expectations and issues

  • Eskom liquidity
  • Coal price
  • Timeous communication of business opportunities
  • Collaboration for shared value
  • Evidence of Exxaro's good corporate citizenship, thought leadership, and strong management

Our response

Our supplier relationship management programme supports Exxaro's strategies by leveraging value chain partner capabilities through regular engagements on cost savings, supplier diversity and transformation (black ownership and participation), supply security and business risk exposure mitigation.

We aim to increase the frequency of engagements to communicate about our systems and processes, contract renewals, our procurement strategy and strategic sourcing successes; communicate our business successes; how we are addressing broader societal needs through our strategy and how suppliers can collaborate on our journey of powering better lives; and keep SMMEs informed about how to work with Exxaro through regular training.

Outcomes and value delivered Outcomes and value delivered

  • All black-owned SMMEs have immediate payment terms
  • R1 097 million procurement or over 11% of our procurement spend is with local SMMEs
  • We are constantly looking at ways to improve our systems and processes to improve the ease of doing business with Exxaro
  • We are investing money in creating infrastructure and policies to make it easier for emerging suppliers to work with Exxaro

Restoring social livelihoods at Belfast

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Driving transition through leadership
About this report
Our strategic evolution
About Exxaro
Our ESG perspective
Transitioning into a low-carbon business
Measuring our performance
Strategic key performance indicators
Stakeholder management

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Air quality
Climate change resilience
Energy management
Water security management
Waste management
Environmental liabilities and rehabilitation

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Material themes in focus
Ethical culture
Performance and value creation
Adequate and effective control
Trust, good reputation and legitimacy
Board of directors
Our executive team
Audit committee report
Investment committee report
Remuneration committee report
Nomination committee report
Risk and business resilience committee report
Social, ethics and responsibility committee report
King IV application register
Remuneration report

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Human rights

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Assurance report
Appendix A: Criteria