Exxaro Resources Limited
Integrated report 2022

Our strategy: positioning Exxaro for sustainable growth and impact

We aim to create and preserve value by delivering sustainable growth and impact. Sustainable growth means we are transforming our business at prudent scale, evolving into a diversified company that will thrive and contribute to a low-carbon future. Sustainable impact means we aim to do this responsibly by addressing our broader impact and material ESG and compliance matters. The Sustainable Growth and Impact strategy is an integrated, multi-stakeholder approach to positioning the business for a resilient and sustainable future.

We are determined to play an active role in creating a future that enables our vision: resources powering a clean world, as we transform the business. During 2022, we further refined and consolidated our strategy in response to the rapidly changing macro-economic environment. As part of this, we revised our capital allocation model to guide decision making in line with our enterprise ambition, Our north star is to harness, harvest and harmonise resources powering a cleaner world.

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Our strategic objectives

  1. Transition at speed and scale: Transition our business with measured urgency given the growing need for the low-carbon transition. We will do this while creating positive social impact. We will leverage our innovation, organisational intelligence and learning culture to navigate this transition
  2. Make our minerals and energy businesses thrive: Enhance focus on our core delivery areas, minerals and renewable energy, by increasing our footprint in these areas, divesting of non-robust assets and ensuring continued operational and digital excellence
  3. Empower people to create impact: Ensure our people and partners have the capabilities, mindset, environment and passion to achieve our purpose
  4. Be carbon neutral by 2050: Reduce our carbon footprint and become carbon neutral by 2050. We will achieve this through our focused portfolio decarbonisation and social impact initiatives
  5. Become a catalyst for economic growth and environmental stewardship: Positively impact our ecosystem during and after our operations in minerals and renewable energy, building community projects and businesses into investable impact programmes, which can lead to sustainable, scalable economic upliftment and prosperity, independent of our continued operations in these environments.

The details of our strategy

We intend to deliver our long-term strategic objectives by aligning our resources to the following areas:

  • Delivering value in existing coal assets
  • Growing our renewable energy solutions business
  • Providing minerals that support a low-carbon world

We are leveraging the following strengths and capabilities:

  • Mining and bulk commodity
  • Balance sheet strength
  • Technical and commercial due diligence
  • Business integration
  • Newly acquired expertise in renewable energy

Over the next five years, we will use the following to enable the execution of our strategy:

  • Clear targets
  • A robust capital allocation model
  • Monitoring performance through KPIs
  • Accountability
  • Skills and executing culture

Capital allocation

Our ambition to be a diversified carbon-neutral minerals company with a significant renewable energy business can be realised through effective capital allocation. Our revised capital allocation model will enable us to continue delivering shareholder value and create a sustainable, resilient and robust enterprise that can withstand dynamic markets shifts. We revised our approach to capital allocation to grow our minerals and energy businesses while fully understanding their associated risks and rewards. The model ensures strategic decision making between competing business investment interests and ensures alignment with our strategic intent.

We introduced additional criteria to ensure we embed disciplined and data-driven capital allocation aligned with our enterprise ambition.

Our capital allocation criteria include:
  1. Strategic fit: metrics that evaluate financial and market performance, capability alignment, ESG performance and diversification of product, geography and customers
  2. Pacing: prioritising timing of investment decisions and considering factors such as time to earnings, organisational readiness and stakeholder considerations to ensure timeous value realisation

Our capital excellence programme demonstrates our vigilance to optimising how we use our financial resources to create sustainable value. Robust capital allocation is informed by our enterprise KPIs:

  • Growth in minerals earnings
  • Decarbonisation of portfolio
  • ROCE
  • Growth in renewable energy generation
  • ESG and licence to operate


Our strategy will be delivered in phases with clear outcomes for each focus area.

Ambition targets


Our strategy is implemented in three tiers of accountability:

  • Tier 1 board: establish vision, mission and set direction of the business
  • Tier 2 executive management: apply approved strategy into business plans
  • Tier 3 executive BUs: translate business plans into detailed execution plans

Our renewable energy business

To be a leading international renewable energy solutions provider by 2030

Renewable energy

  • A significant contributor of renewable energy solutions (renewable assets and services)
  • Servicing the public and private sectors in South African and other markets
  • Focus on three renewable energy areas:
    • Distributed generation: Our growth in renewables will be internally led by providing our existing operations with self-generation. We have two large windfarms and micro-grids in operation, and the Lephalale solar project under development. We will then look to providing generation for customers in mining and select markets
    • Utility generation: We intend to provide utility generation in select markets. We will determine markets for focus through selection criteria
    • Services: We will build our energy services business by growing our existing renewable energy business and augmenting our generation business. We will also offer asset management, energy management, digital services and virtual power


  • Transition Exxaro to a carbon-neutral future as a start
  • Provide diversification and long-term sustainability to Exxaro's cash flow including providing cost-competitive energy solutions
  • Become a prominent player in the energy security industry in South Africa


  • Leverage Exxaro's advantage, which includes our internal energy requirements, a healthy balance sheet, resource evaluation skills, excellence in project management and optimisation, and experience in the project lifecycle
  • Invest in renewable energy with an acceptable risk profile targeting a portfolio return of 15% equity internal rate of return over a period of time
  • Strategic acquisition of skill and market entries to grow at sca

Competitive advantage

  • Renewable pedigree: We have a significant local IPP in South Africa and have had exposure to the renewables business since 2009
  • Strong Exxaro brand: Includes a strong balance sheet to back this new strategic pillar
  • Adjacency advantage: All our operations require decarbonisation. Operations are often located in clusters with other mining peers also requiring solutions
  • Partnerships: We have formed partnerships that enable growth and contribute key offtake opportunities

Our minerals business

To utilise Exxaro's mining skills to supply minerals that power a clean world and provide our shareholders with superior returns while driving decarbonisation ambitions


Our coal business continues to deliver value for Exxaro and is key in providing the country's primary energy source

New minerals

New mineralsDiversify into new mineral assets (manganese, copper and bauxite) that are vital to a low-carbon future


We believe that the coal assets under our care do not belong to us. Therefore, we have a responsibility to manage them appropriately.

To do this, we must ensure that, on our way to a low-carbon future, we do not leave high-value assets sterilised and stranded.


  • Diversify revenue for Exxaro's growth
  • Clearly defined investment supporting the right opportunities
  • Balance sheet and mining capabilities provide a competitive advantage


  • Ensure a robust coal asset portfolio, which includes divestment from resources that do not suit our future portfolio
  • Optimise our market to resource capability
  • Digitalise our operations with a focus on value creation
  • Optimise capital allocation supported by our capital excellence programme
  • Minimise emissions at our existing operations


  • Exxaro has developed a minerals business approach that enables a just transition to a low-carbon world while leveraging our core competencies as a bulk miner
  • Robust screening criteria enable us to continuously review and identify the minerals we should be focusing on for our future growth
  • Our initial targeted minerals (manganese, copper and bauxite) offer the best risk to reward ratios to:
    • Deliver our bold EBITDA target
    • Support our ambition to power a clean world
    • Benefit from the decarbonisation tailwinds that will drive world economies into the future

Competitive advantage

  • Specialised skills: We have roots as a diversified miner with recognised specialised skills in mining. This includes open-pit and bulk commodity experience, base metals, mineral sands and industrial minerals
  • Project execution excellence: Through expansion successes, delivering digital innovation through our Digital@Exxaro programme and continued operational excellence from our high-performing coal operations
  • Recognised for our ESG performance, brand and culture

We unpack our progress against delivering on our strategy on the following pages.

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Driving transition through leadership
Driving value creation through transition
About our integrated report
Chairperson's statement
About Exxaro
Sustainable growth and impact
Our operating context

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Our business model
Our material matters
Our business risks and opportunities
Creating value through stakeholder engagement

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CEO's report
Our strategy: positioning Exxaro for sustainable growth and impact
Performance against our strategy and future focus
2022 strategic key performance indicators
Key strategic trade-offs

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Our leadership
Summarised governance report
Combined assurance for effective governance

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Finance director's overview
Operational performance
Business resilience
Our people
Social licence to operate: enabling our legitimacy
Our environment: stewardship and compliance
Responding to TCFD reporting requirements

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Our mineral resources and mineral reserves

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