In the face of myriad challenges, our strategic initiatives and the collective resilience of our people and operations enabled us to not only withstand but also navigate volatility with confidence and purpose, recording the second highest ever EBITDA of R13.4 billion, thus laying a solid foundation for continued growth and impact.
Mvuleni Geoffrey Qhena
Chairperson
For Exxaro, the volatile macro-economic climate impacted commodity markets and trade, making strategic flexibility essential. The group navigated these global upheavals while contending with South Africa's internal challenges, including the ongoing constraints of inadequate infrastructure and logistics supply.
As Exxaro moves forward, we find ourselves at a pivotal juncture, urged by the global mandate for environmental stewardship and climate action. Exxaro has made strides in our climate strategy, developing a comprehensive decarbonisation roadmap with the ambitious endpoint of carbon neutrality by 2050. In its mature phase, this roadmap outlines actions to guide the group's sustainable transition in anticipation of more stringent environmental regulations, reaffirming Exxaro's leadership in sustainable practices.
The board rigorously evaluated Exxaro's Sustainable Growth and Impact strategy's progress, timing, and scenario planning against our strategic scorecard framework. This included endorsing a unified ESG framework and enhancing our strategic approach to sustainability. We also evolved our strategic performance management dashboard, improving the visibility of strategy execution and enriching governance discussions within Exxaro's tiered governance structure.
Adapting to an evolving landscape, our annual board governance roadshow delved into the potential impact of global sanctions and financial threats, including grey listing and interest rate fluctuations. The discussions led to a thorough analysis of these risks and their implications for Exxaro, which remains under active board and committee review.
Exxaro's resilient operations are rooted in innovation and strong technical expertise, reinforcing safe production, robust financial performance and an effective approach to our strategic capital allocation. To support this, the board has been leveraging our Digital@Exxaro strategy, deep mining and energy expertise, strong balance sheet, stable earnings, high-quality products and a strong record of delivering sustainable impact.
The board continues to demonstrate its commitment to governance excellence as the bedrock for sustained value creation. Leadership quality is paramount for strategic success, necessitating the right blend of skills, diversity and oversight at the board level. Our board consistently focuses on achieving the right size, balance, independence and diversity to effectively fulfil its governance mandate.
Demonstrating our dedication to these principles, Andiswa Ndoni transitioned from group company secretary to the chief strategic resilience and governance officer. Her expertise will continue to benefit the group in this pivotal role. Michelle Nana will succeed her as group company secretary from 1 May 2024. With a background spanning over 30 years in company secretarial roles across various geographies, and as a law graduate and esteemed member of relevant professional bodies, Michelle is well positioned to uphold the governance standards that underpin our operations.
We are also pleased to announce Nosipho Molope's appointment as an independent non-executive director and a member of the audit committee effective from 3 January 2024. Nosipho, a distinguished chartered accountant, brings extensive experience from her service on numerous boards, enhancing our governance with her proficiency in audit, risk and ethical oversight.
While we embrace these new appointments, we also bid farewell to Likhapha Mbatha who retires by rotation at the 2024 AGM. Likhapha retires as a member of the social, ethics and remuneration committee and has made a lasting impact on Exxaro. The board extends its gratitude for her exceptional service.
These changes reflect Exxaro's ongoing commitment to strategic board renewal and succession planning, ensuring the group remains at the forefront of governance excellence and prepared to navigate future challenges with resilience and integrity.
The board firmly believes in the power of stakeholder engagement to forge lasting, positive outcomes. True to the ethos of King IV, our stakeholder-inclusive approach underpins our governance philosophy.
We recognise that understanding and balancing our stakeholders' diverse needs, interests and expectations against the organisation's long-term interests is pivotal for sustained success.
Engagements with crucial stakeholders like Transnet and Eskom underscore our proactive approach in finding solutions to assist in managing the material risks and operational challenges we are facing. The board's logistics committee, now institutionalised as a permanent fixture of our governance, is pivotal in managing all logistics risks faced by the company. It will continue to focus on long-term international market access and immediate logistic solutions.
Community engagements remain critical. By building relationships grounded in understanding community needs, Exxaro fosters collaboration and pre-emptively addresses community concerns. The group also emphasises shared value creation through local employment, procurement, and supplier and community development initiatives, seeking to deliver value beyond specific operational lifespans. This is illustrated through our community investments, which totalled R1.9 billion this year, a 17% increase since 2022.
In November 2023, class action litigation was launched against South African coal mining companies, including ourselves, relating to mineworkers who contracted coal mine dust lung disease, as well as dependants of those mineworkers who died and whose deaths were likely attributable to coal mine dust disease. We are taking this action very seriously, since the health and safety obligations of our employees are paramount. We are investigating all the facts pertaining to the class action and will respond appropriately. The group proactively researches and reinforces health and safety measures, including cutting-edge occupational hygiene and medical surveillance programmes, to prevent occupational health diseases.
Feedback from our governance roadshow has been affirming. Investors have recognised our engagement efforts and suggested further improvements in our climate lobbying disclosures. We value this feedback as it enhances our reporting processes and ensures alignment with stakeholder expectations.
The board remains convinced that effective stakeholder engagement is a cornerstone of robust governance. It fosters relationships founded on respect and trust, leading to better informed and more effective decision making.
We are acutely aware of the ongoing global fluctuations and persistent local challenges that loom large.
We continue to monitor socio-economic and political events, such as the upcoming 2024 elections, both in South Africa and the other countries we operate in.
Our response is one of vigilance and proactive stakeholder engagement, working collaboratively to foster a climate of stability and growth. Likewise, the safety of Exxaro's people is a top priority, and our leadership, company culture, and performance contracts reflect this.
Looking to the future, Exxaro's determination is unyielding – not only to adapt to an ever-evolving landscape but also to be the architect of change.
Our commitment to diversification remains. Although we have not concluded a mineral transaction as yet, the board is satisfied with management's efforts in this regard and is comfortable that a value creating asset will be added to the company's portfolio. Our intention is to ensure that we are strategically concentrating on critical areas such as minerals and energy to leverage the expanding opportunities within the green economy. Our comprehensive approach ensures that all efforts are harmonised with our goal of building a diversified enterprise primed for resilience and growth within a transforming energy sector.
In closing, I want to thank my fellow board members, the executive team under the leadership of Dr Nombasa Tsengwa, and all Exxaro employees for their dedication and hard work.
We thank all our stakeholders for your continued trust and support. As we move forward, we do so with a clear vision and a strong sense of purpose, ready to embrace the opportunities and tackle the challenges that lie ahead.
Mvuleni Geoffrey Qhena
Chairperson
10 April 2024
Report Index
IR