Exxaro Resources Limited
Integrated report 2022

Social licence to operate: earning our legitimacy

Our social and relationship capital impact comprises large-scale, high-quality initiatives that provide for meaningful socio-economic upliftment opportunities:

  • Education and skills development
  • Land use and management
  • Local economic development

We strive to positively impact our social and relationship capital through:

  • Our Social Impact strategy addressing challenges in our host communities
  • Investment in socio-economic development
  • Going beyond compliance to protect our licence to operate

Material theme


Our strategic response

Our impact on the SDGs

  • Social licence to operate
  • Social acceptance and community unrest
  • Supporting a just transition to a low-carbon economy
  • Job and business creation
  • Impacts on local communities (positive and negative)
  • Value sharing
  • Human rights
  • Empower people to create impact
  • Be a catalyst for economic growth and environmental stewardship

"We know that there is a better place to be tomorrow than where we are today."
Dr Nombasa Tsengwa

How we achieve this

Six funding structures serve as conduits for community donations and sponsorships, namely the Exxaro Chairman's Fund and Foundation, Matla Setshabeng NPC, Amakhala Emoyeni Community Fund Trust, Tsitsikamma Community Windfarm Trust, Tsitsikamma Development Trust and ESD programme. Our Social Impact strategy enables us to deliver impact at scale through the following key principles:

A market-based approach that integrates social, environment and economic outcomes

Long-term planning, aligned to the life of operations and incorporating post-mining livelihoods

Design for larger projects that will enable multiplier effects

Optimising existing resources and capabilities and recognising the power of partnerships

The board approved the Social Impact strategy in November 2022. The SERC, through its statutory provisions, has oversight of community engagement and development. This committee will oversee the implementation of the Social Impact strategy. The executive head: stakeholder affairs, has been delegated with the role and responsibility for integration and execution.

Snapshot of our performance

Invested in social investment projects for local economic development
(SLPs and CSI)

R181.31 million

(2021:R113.72 million)

Jobs created


(2021: 205)

Number of community members benefited

1.26 million

(2021: 53 000)

A combined total investment contributed by Exxaro and Cennergi in socio-economic and enterprise development programmes:

R205 million

SLP projects

  • Spend: R13.38 million (2021: R56.44 million)
  • • Our spend was impacted by delays experienced in the implementation of SLP projects
  • • Submitted proposals for Thabametsi (2020 to 2024), Matla (2020 to 2025), Grootegeluk (2023 to 2027) and Tshikondeni (in closure) (2023 to 2027) SLPs
  • • DMRE approved the Matla (2020 to 2025) SLP

CSI (including disaster relief)

  • • R167.93 million (2021: R57.28 million) (Matla Setshabeng NPC was established in 2021 and was fully operational in 2022, hence the high difference in CSI spend)
  • • 1.17 million beneficiaries (including GBV campaigns and university chair) (2021: 300 000)
  • • R80.9 million invested in community education to benefit 41 000 learners

ESD contribution

  • Spend: R291.2 million (2021: R127.7 million)
  • Beneficiaries:
    • – Qualifying small enterprises (QSEs) and exempt micro-enterprises (EMEs): 30 (2021: 15)
    • – Youth-owned: 16 (2021: four)
    • – Women-owned: nine (2021: seven)
  • Jobs retained: 1 037 (2021: 243)

The ESD programme achieved record disbursements and played a role in the achievement of the procurement targets described below. Driven by a higher group NPAT, the programme had to spend a much higher amount within the year to ensure compliance with the dtic B-BBEE codes. Given the high coal prices, the forecast NPAT was much higher than budgeted at the beginning of the year. All efforts were invested to achieve the higher target, however, there were fundamental constraints that prevented us from achieving our ESD compliance goal. Firstly, resource constraints to spend more money and secondly, increasing the volume of ESD funding applications does not improve the number of qualifying applicants. While we reached an annual increase and record disbursement of R291 million, we expect to achieve 9.75 points (65%) out of 15 compared to the target of 13.5 (90%) once the B-BBEE verification for 2022 has been finalised.

Supply chain sustainability

  • Preferential procurement: Fully compliant with B-BBEE codes: overall score of 26.9 (2021: 28.3) against 24.2 target
  • Green procurement programme: Spent R133 million (0.8% of total procurement budget)
  • Mining Charter III scorecard: Scored 40 (2021: 40) points against 37.2 (2021: 31.5) target
  • Local procurement: Spent R1 097 million (2021: R1.05 billion) with 246 (local black-owned SMMEs (2021: 241)
  • Ethical procurement: E-procurement software, supplier onboarding process and checks to reduce fraud risk, maintain cost efficiency and avoid conflicts of interest

Our affirmative procurement initiatives at operating mines remain above target. We spent R1.1 billion, (circa 11.4%) of discretionary procurement compared to a target of 10%, on local SMMEs, thus injecting significant value into the local communities. However, the challenge remains large and we will continue to pursue higher levels of this investment through targeted expenditure and skills development to increase both the volume of expenditure and value per expenditure.

Cennergi's share of procurement sourced from B-BBEE suppliers, QSEs, EMEs and women-owned vendors is tracked against commitments and targeted percentages in the implemented agreement.

Tsitsikamma community windfarm and Amakhala Emoyeni are committed to 60% total procurement from B-BBEE suppliers, 10% from QSEs and EMEs, and 5% and 2.5% respectively from women-owned vendors.

While the Social Impact strategy will fit into the "S" element of ESG, the implementation approach will incorporate elements from "E" and "G" to ensure sustainability, especially in relation to just transition considerations. We were deliberate in selecting to focus on education (ECD and adopting local schools), land use and management (mineral succession planning, ie finding alternative economic uses of the land beyond mining) and continuation of local economic development through local procurement and ESD initiatives. When viewed through the lens of the SDGs, this approach will have a sustaining positive impact on communities and reduce poverty by combining multidimensional approaches (education, economic wellbeing, school health and education infrastructure) and influence other areas of wellbeing without additional investment (the multiplier effect). We are planning to have approval of (partial, while researching other) execution plans by mid-year 2023.

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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
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Creating value through stakeholder engagement

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CEO's report
Our strategy: positioning Exxaro for sustainable growth and impact
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2022 strategic key performance indicators
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Finance director's overview
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Social licence to operate: enabling our legitimacy
Our environment: stewardship and compliance
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