• Cable theft and derailments
• Transnet's locomotive availability
• Inadequate fleet maintenance due to lack of spares at TFR
• Financial viability of Transnet
• TFR skills shortage to maintain operations

• Operational stoppages
• Financial loss
• Unable to meet contractual agreements and 2022/23 budget
• Unable to grow and execute the value extraction strategy
• Shareholder dissatisfaction on lower returns
• Impairment of RBCT investments

• Marketing and logistics team exploring options to evacuate export-bound coal
• Continuous engagement with TFR to understand issues and provide assistance
• Engage Transnet Port Terminals for a possible contracting to export via Richards Bay Transnet Port Terminals
• Implement a logistics solution (alternative options)

• Inadequate environmental financial provision at tied operations
• Environmental rehabilitation fund shortfall at Matla
• Realisation of approved funding for capital requirements (Matla capital project programme)
• Further delays in Eskom's Medupi power station operating at full capacity
• Eskom not honouring commercial rights and obligations as per coal supply agreements (Eskom liquidity)
• Eskom liquidity risk
• Commercial risk attached to long-term contracts

• Cost of coal production becomes uncompetitive at Matla (lack of capital)
• Loss of revenue
• Reputational damage
• Operational constraints
• National grid failure
• Eskom declares force majeure

• Enforce coal supply agreements and award arbitration in terms of environmental funding
• Stakeholder engagement
• Ongoing discussions on coal supply agreements

• Large number of devices connected (especially in operations) to the corporate network that requires to be managed (security updates)
• Vulnerability due to lack of awareness. People exposing Exxaro to cyberattacks
• Most employees working remotely

• Production loss and ransom resulting in financial loss
• Loss of information
• Business interruption
• Legal and regulatory impacts (Protection of Personal Information, 2013 (Act 4 of 2013) (POPIA) implications)

• Ensure we have monitored security governance in place
• Data loss prevention strategy
• Stricter security practices
• Ensure regular and ongoing security awareness
• Monitor compliance with POPIA
• Business continuity management plan and disaster recovery testing

The prevalence of cybersecurity attacks, specifically ransomware the most prevalent, is expected to increase. We will continue to improve the robustness of the cybersecurity posture.

• Lack of fatal risk ownership and leadership support
• Under-classification of critical controls to manage fatal risk
• Inadequate resource allocation to implement and manage critical control management programme

• Fatal health and safety incidents
• Operational stoppages
• High insurance premiums
• Loss of licence to operate
• Decrease in quality of life
• Section 54 by the Department of Mineral Resources and Energy (DMRE)
• Loss of productivity (deaths, medical incapacity or sick leave)

• Implementation of critical control management programme with strong emphases placed on the effectiveness of preventive controls
• Evaluate the effectiveness of the critical controls through compulsory quarterly verifications
• Identification of the critical control performance trigger for shutdown, critical control review or investigation

• Volatile economic and market conditions
• Perceived increased business risk
• Regulatory uncertainty in South Africa
• Speed at which we are able to process deals
• Competition for assets
• Access to possible deals
• No risk appetite associated with making deals
• Unavailability of skills

• Reputational damage
• Unable to transition from coal to other minerals

• Regular communication on strategy, capital allocation and returns against targets
• Disclosure of target and performance against strategy and capital allocation
• Build critical skills and capacity to achieve strategy
• Clarity of transition strategy to low-carbon future and expected returns

• Not achieving productivity indices (benchmark standards)
• Cost containment discipline not uniform
• Deteriorating mining conditions (decreasing yield and increasing stripping ratio)
• Not meeting production volumes
• Exchange rate volatility
• Commodity price decline
• Inaccurate financial modelling
• Higher fixed costs (corporate office costs charged to business units (BUs))
• South African geographical constraints

• Financial loss
• Margin squeeze
• Premature mine closure and allocation of costs to other operations
• Reduced earnings will impact approval of capital projects

• Embrace technology and innovation initiatives to improve productivity performance
• Optimise operating model and avoid duplicated activities
• Create strategic partnership to leverage economies of scale
• Ensure balance between capital optimisation and prioritisation
• Investigate and divest non-core and non-robust assets
• Review and monitor performance of suppliers and service providers
• Increased awareness of cost management
• Focus on sustainable cost reduction programmes and business improvement initiatives
• Planned reviews by coal operating company
• Rebalancing product chains for better use of infrastructure

Inflationary pressure is expected to continue given challenges in the global economy exacerbated by the Russia-Ukraine conflict.

• Lack of investment and low employment creation
• Uncertainty about land ownership and security of tenure
• Limited local government capacity to deliver services
• Potential for nationalisation sentiment
• Continued poor economic performance will influence policy and political outcomes
• Slow implementation of required reforms
• Corrupt practices (private and public sector)
• Rating agencies downgrade South Africa to junk status
• South Africa's real GDP growth forecast to be 0.6% for 2023
• Limited fiscal capacity
• National party leadership elections every five years
• Nature of influence of opposition parties
• Political instability
• Policy uncertainty

• Possibility of community unrest for political support
• Stakeholder dissatisfaction
• Potential regulatory penalties/oversight
• Increased compliance burden
• Potential increase in royalties/taxes
• Reduced investment opportunities (increase in cost of capital)
• Increased cost of doing business (due to increased compliance burden)
• Fewer opportunities for co-investment with government in community development
• Breakdown in government relationships with Exxaro
• Higher expectation from society and government for more social investment
• Potential for junk status rating and/or downgrade of Exxaro's credit status due to link to Eskom
• Pressure on revenue

• Align our purpose with governance and ethics
• Continuously monitor independent country risk assessment report
• Engage with shareholders on minerals business and capital allocation for new strategy
• Establish and participate in collaborative regional development platforms for community impact
• Develop renewables strategy that could result in new investment and electricity security
• Long-term investment perspective for growth, development and impact
• Municipal capacity building
• Ongoing engagement with Minerals Council and provincial and local governments
• Strive for full compliance with relevant legislation for business continuity
• Continued support of relevant business lobby groups to engage business and government
• Increased and improved analysis of dynamic political landscape and impacts on stakeholders
• Increased focus on provincial and local players and intensified engagement across local stakeholder networks to mitigate shocks "from above"

• Delays in approval of licences and authorisations
• Increased state interventions in the mining sector: expectations to invest and transform
• Unable to achieve SLP targets as approved (annual and five-year projects)
• Unable to meet legislative targets, eg Mining Charter and B-BBEE
• Lack of understanding of collaboration principles by other stakeholders
• Increased social activism

• Directives issued by DMRE to remedy
• Reputational damage
• Penalties and fines
• Financial loss
• Community unrest
• Production stoppages

• Adherence to commitments in the SLP as a minimum
• Implementation of human resource development programme
• Pursue identified initiatives to progressively improve Exxaro's B-BBEE rating
• Compliance performance management
• Conduct SLP audits

• Inability to influence legislative changes
• Lack of awareness/knowledge around regulatory requirement
• Culture of non-compliance in South Africa
• New laws and regulation enacted with high frequency in South Africa and globally
• Uncertainty around energy legislation

• Operational stoppage
• Reputational damage
• Stoppage directives
• Penalties and fines
• Potential civil and criminal liability
• Delays in licence approvals

• Conduct compliance awareness training on licence to operate requirements
• Early alerts on prospective changes in legislation
• Compliance programme
• Legal industry engagement through the Minerals Council about prospective changes
• Perform consequence management on deviations
• Internal and external compliance audits

Changes to regulatory framework in mining and energy are constantly monitored.

Ongoing awareness and training on legal and regulatory requirements

• Drought exacerbated by climate change
• Limited water resources in South Africa
• Delays in the building of water infrastructure by government
• Competing demands of agriculture, mining and general population
• Traditional areas of operation have little water especially in the Waterberg
• Mismatch of what is approved and what is required on the water use licence (WUL)

• Operational stoppage
• Escalation of cost of water
• Legal and health impacts
• Opportunity loss of starting a new venture
• Net present value

• Implement a water security and management strategy
• Board approved MCWAP2
• Recycling of water
• Water treatment plant ensuring water efficiency and treatment
• Liaison with government via the Chamber of Mines
• Engaging in industry forums for catchment management planning
• Establishment of public-private partnerships