Exxaro Resources Limited
Integrated report 2022
Our business model depicts the capital inputs we need to conduct our activities and deliver our products.
Click on the icons below for further information on the capitals
NATURAL CAPITAL
HUMAN CAPITAL
SOCIAL AND RELATIONSHIP CAPITAL
MANUFACTURED CAPITAL
INTELLECTUAL CAPITAL
FINANCIAL CAPITALThe natural resources we rely on to run our business and create our products
These affect our ability to achieve our strategic objectives and value creation.
The people who manage our business and perform our operational activities
These affect our ability to achieve our strategic objectives and value creation.
The relationships that provide our social licence to operate
The physical mining, energy and property assets that enable us to deliver our products
These affect our ability to achieve our strategic objectives and value creation.
The unique combination of knowledge, experience, innovation and systems that differentiate Exxaro
These affect our ability to achieve our strategic objectives and value creation.
The financial assets that enable us to deliver on our strategy
These affect our ability to achieve our strategic objectives and value creation.
Our business activities align with our strategy of strengthening our resilience and ensuring we deliver sustainable value through a robust portfolio in a low-carbon economy.
Our purpose guides our activities, ensuring we continue providing critical resources that support South Africa's sustainable economic and social development in a way that will accelerate change and ultimately safeguard the value we create for our stakeholders over time. We are committed to making a deliberate positive impact through our physical outputs and the way we do business.
Our activities comprise:
Although we strive to create value through our business activities and our Sustainable Growth and Impact strategy, we have a negative impact on some capitals. We remain committed to negating these negative impacts while creating positive impacts beyond compliance by using our recognised ESG, brand and culture.
Our business model does not operate in isolation. It impacts and is impacted by our:
| Impact on value: |  |
Net increase in value | |
| Year-on-year change: |  |
Positive increase | |
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Negative increase |
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Net value preservation |
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Unchanged |
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Net value erosion |
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Positive decrease |
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Negative decreaseManufactured |
Creating, preserving or eroding value: To ensure sustainability, our positive impacts must reach far and wide. We must be a catalyst for meaningful change with our legacy measurable long after mining ceases.
This should be embodied in creating opportunities and economies that sustain communities and broader society for future generations.
Click on the icons below for further information on the capitals
NATURAL CAPITALHUMAN CAPITALSOCIAL AND RELATIONSHIP CAPITALMANUFACTURED CAPITALINTELLECTUAL CAPITALFINANCIAL CAPITAL |
Despite a focused approach to environmental stewardship, we have an overall negative impact on the environment and thus erode natural capital. This is because we extract natural resources as part of our business activities and depend on these natural resources. |
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Carbon intensity: 0.5% increase (2021: 13% increase) |
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Water intensity: 0.5% increase (2021: 9% increase |
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Environmental incidents: zero (2021: zero level 3) |
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Valid mining rights: 100% (2021: 100%) |
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Safety stoppage directives: seven (2021: two) |
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As part of ensuring we have the right people to drive us forward, we invest in, upskill and offer our employees an attractive value proposition, thereby increasing our overall human capital. This investment extends to potential future employees and the communities who provide labour to our operations. |
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We preserve the value of our human capital by being mindful of the safety and health of our employees and host communities, and striving to achieve zero harm through collective responsibility, commitment and risk awareness. |
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Employee and contractor fatalities: one (2021: zero) |
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Lost-time injury frequency rate (LTIFR): 0.05 (2021: 0.08) |
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Occupational health incident frequency rate (OHIFR): 0.16 (2021: 0.16) |
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Scarce skills retention: 4.4% (2021: 3.7% (on target)) |
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We deliver value to our host communities through our impact at scale initiatives, SLP commitments, stakeholder engagements, attracting participation from black-owned suppliers and our commitment to the UNGC principles. |
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We are aware of the impact mining operations have on host communities, now and at the end of a mine's lifecycle. We aim to mitigate this by ensuring a just transition of our operations and our communities' long-term sustainability. |
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Community incidents*: 13 (2021: 14) with one day shift lost at Matla |
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Top-quartile mining performer in ESG governance structure ESG analyst rating: 4.0 (2021: 3.7) |
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BEE level: 3 (2021: level 2) |
| * | Incidents are protests that did not lead to production stoppage. |
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Our investment in our portfolio of quality assets to meet changing market demands increases our manufactured capital. |
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However, these investments decrease our financial capital and natural capital. |
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Marginal timeline overruns in mega-projects |
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Implementation cost for mega-projects on target |
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We continue increasing our competencies across mining and renewable energy. Our focus on business resilience, investments in innovation, digitalisation and technology – for example, our renewable energy risk and opportunity domain analysis (RRODA) tool/platform – increase intellectual capital. |
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Our collective knowledge, skills and resources positively impact human, social and relationship, and manufactured capital. |
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Core system availability: 97.94% (2021: 99.55%) |
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Secure scorecard: 76.35% (2021: 63.45%) |
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To ensure we positively impact financial capital and create value over time, we have a strong balance sheet and cash-generative coal business, a strategy that builds off our core purpose and capabilities, and a leadership team fully aligned with the need to create a carbon-resilient business. We deliver financial value and empower people to create impact and self-sustaining economic activity. |
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We invest and distribute our financial resources to support our strategy, increase efficiency, expand operations and maximise value. |
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EBITDA margin: 41% (2021: 33%) |
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Return on capital employed (ROCE): 45% (2021: 36%) |
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Adjusted HEPS: 6 016 cents per share (2021: 4 683 cents per share) |
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Market capitalisation: R75.9 billion (2021: R53.4 billion) |
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