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Exxaro Resources Limited
Integrated report for the year ended
31 December 2023
 

Engaging our stakeholders

Through our holistic stakeholder approach, Exxaro aims to build long-term, stable, mutually beneficial relationships with stakeholders. Our engagements enable us to better understand, manage and respond to material risks and concerns, protect our licence to operate and create shared value.

Our approach to meaningful stakeholder engagement

We believe the value we create for our stakeholders is as important as the value we create for ourselves. Regular and ad hoc in-person engagements, social impact assessments and surveys inform our understanding of our social impact, and stakeholders’ needs and interests.

In this section, we describe our stakeholder management through our ERM framework lens.

Stakeholder universe

We use our ERM process and project workshops to identify our stakeholders and assess our impact on them and their impact on our business. We categorise our stakeholders into four key groupings – government, communities, business and value chain participants – and identify relevant engagement strategies and objectives as required.

Government

  • Governmental departments
  • Local governments
  • Political parties
  • Provincial government
  • District municipalities
  • Regulators

Value chain participation

  • Unions
  • Investors/shareholders
  • Strategic suppliers
  • Partner in delivery
  • Sponsors
  • Customers
  • Employees
  • Service providers

Business

  • Non-governmental organisations
  • Media
  • Professional industry bodies
  • Other mining organisations
  • Universities
  • Financial community
  • Non-profit organisations

Communities

  • Local media
  • Faith-based organisations
  • Taxi association
  • Farmers and landowners
  • Other mining companies
  • Local SMMEs
  • Communities
  • Local leadership
  • Local schools

Assessing engagement effectiveness

Engagement effectiveness is assessed through assurance and audits of our procedures and changes in risk ratings. We also measure perceptions of our engagement performance as part of a stakeholder survey.

Material engagements in 2023

While we engage regularly with multiple stakeholders, this report focuses on engagements most material to value creation and preservation.

No existing relationship or the relationship has challenges

Established relationship but can be improved

Good relationship with opportunity for improvement

Very strong relationship based on mutual trust and respect

2023 risk

Unavailability of rail capacity

Engagement purpose Collaborate in finding solutions to improve logistics
Stakeholder Transnet
Further reading Our risks and opportunities

Quality of relationship:

Stakeholder expectations and issues

  • TFR performance

Material themes

Key engagements and outcomes

  • Supporting National Logistics Crisis Committee initiatives, which we are optimistic will move performance in the right direction
  • Engaging directly with Transnet through:
    • Weekly meetings on operational and commercial matters (with TFR Coal Line and TFR Commercial as Exxaro and as a member of the Coal Exporting Parties group)
    • Monthly meetings on issues not resolved at weekly meetings
    • Quarterly and biannual coal industry meetings between senior executives on performance matters and issues of strategic interest

Strategic objectives

  • Make our minerals and energy businesses thrive
2023 risk

Customer concentration risk

Engagement purpose Eskom remains a key Exxaro customer. In 2023, Exxaro attributed 73% of sales to Eskom. Long-term agreements with Eskom at Matimba and Medupi place the coal business in a defensive position. We engage regularly in light of Eskom’s challenges.
Stakeholder Eskom
Further reading Our risks and opportunities

Quality of relationship:

Stakeholder expectations and issues

  • Coal supply agreements

Material themes

Key engagements and outcomes

  • Engaging to renegotiate the Matla cost plus agreement due to expire in mid-2024
  • Conducting regular planning and operational alignment engagements at Grootegeluk around Matimba and Medupi coal supply agreement contracts

Strategic objectives

  • Transition at speed and scale
  • Make our minerals and energy businesses thrive
2023 risk

Fatal risk incidents

Engagement purpose Align employees’ focus with our health and safety strategy and culture for competitive advantage and resilient business performance.
Stakeholder Employees
Further reading

Quality of relationship:

Stakeholder expectations and issues

  • Health and safety standards

Material themes

Key engagements and outcomes

  • Communicating safety issue reminders daily at operational level and regular safety messages across various platforms
  • Hosting our annual sustainability summit and focusing on eliminating repeat incidents following last year’s LTIFR increase
  • Facilitating ongoing safety training (including risk management, safety for supervisors and legal liabilities), which perceptibly improved the quality of mini hazard identification and risk assessments
  • Hosting a compulsory weekly review meeting to discuss learnings from internal or external safety incidents

Strategic objectives

  • Make our minerals and energy businesses thrive
  • Empower people to create impact
2023 risk

Community unrest

Engagement purpose We aim to build relationships and our understanding of community needs to enable collaboration and successful delivery of socio-economic development projects. Engagements enable us to proactively resolve issues or concerns raised by communities and avoid protest action. In addition, we aim to communicate how we create shared value through local employment and procurement, community development initiatives, skills development and ESD.
Stakeholder Communities
Further reading

Quality of relationship:

Stakeholder expectations and issues

  • Our communities expect Exxaro to employ, uplift and empower locally to enable South Africa’s development
  • We had four incidents in 2023 that resulted in three hours of lost production at Leeuwpan (2022: 13). The improvement can be attributed to our proactive and intentional engagements with our stakeholders

Material themes

Key engagements and outcomes

  • Considering concerns raised at meetings between our board and host communities in Mpumalanga during 2023, which included the ongoing need for employment and local procurement, youth training and development opportunities, engagement with traditional authorities and collaboration in addressing crime
  • Addressing community needs through our socio-economic development, ESD and procurement initiatives and communicating via our stakeholder engagement forums

Strategic objectives

  • Become a catalyst for economic growth and environmental stewardship
  • Empower people to create impact
2023 risk

Adverse threat to licence to operate and country risk

Engagement purpose Proactive engagement supports our efforts to drive business resilience and manage risk. Exxaro plays a proactive role in finding solutions to socio-economic challenges and contributes to shaping government policies by collaborating and partnering with government.
Stakeholder Government
Further reading

Quality of relationship:

Stakeholder expectations and issues

  • The role of big business in solving broader societal issues
  • Responsible water management, minimising environmental impact and overcoming climate change issues
  • Life after mining, job creation and community upliftment*
  • Socio-economic development*
  • Municipal service delivery*
  • Local procurement*
  • * Multi-stakeholder issues.

Material themes

Key engagements and outcomes

Several partnerships and initiatives enable us to address government’s expectations. These include:

  • Consulting on SLP development and regularly collaborating on projects
  • Improving disclosure in our annual reporting suite
  • Refining and consolidating our Sustainable Growth and Impact strategy
  • Implementing our Social Impact strategy
  • Collaborating with the health departments in Limpopo and Mpumalanga
  • Reporting quarterly as required by our regulatory bodies
  • Improving compliance and risk mitigation through internal auditing processes, strategies and management controls
  • Proactively engaging with the:
    • Department of Water and Sanitation (DWS) and Department of Forestry, Fisheries and the Environment on water issues at our Durnacol and Hlobane mines in closure
    • DMRE on the renewal of our Matla mining right
    • DWS and DMRE on discard dumps
    • DWS and Water Tribunal on Matla water use licence renewal
  • Regularly reviewing and actioning complaints received at the mines
  • Processing requests for information through the Promotion of Access to Information Act, 2002 (Act 2 of 2002) (PAIA) and managing these accordingly

Strategic objectives

  • Become a catalyst for economic growth and environmental stewardship

Engaging about our climate commitments

We engage with all our stakeholders on climate change concerns as we aim to understand regulatory policy; empower employees, communities and value stream participants to manage climate change impacts; contribute to thought leadership; and communicate our decarbonisation plan.

Exxaro is committed to conducting climate lobbying in a responsible and sustainable manner as stated in our Climate Change Response strategy. Our goal is to also participate in stakeholder engagements on climate change in a manner that advances the achievement of the Paris Agreement objectives. We value industry associations and the platform they present for knowledge sharing and engagements on key issues such as climate policy, advocacy and the low-carbon transition.

We received a request from Just Share, Fossil Free South Africa and Aeon Investment Management ahead of our AGM in May 2023 to report on the alignment of our climate lobbying and policy engagement activities, and those of our affiliated industry associations, with the goals of the Paris Agreement. In response, we have engaged directly with Just Share to understand expectations, build trust and establish an advisory partnership to determine the way forward.

During our governance roadshow in September, investors voiced their satisfaction with Exxaro’s engagement with Just Share and suggested improving climate lobbying disclosure in our ESG and integrated reports.

Stakeholder expectations and issues

  • A just transition
  • Climate change adaptation and mitigation
  • Carbon pricing
  • TCFD and decarbonisation plan
  • Green procurement
  • Biodiversity, waste and water
  • Policy

Material theme

Key engagements and outcomes

  • Engaging on air quality management in priority areas
  • Enhancing climate change adaptation and resilience for industry and government
  • Working with government and other businesses to address South Africa’s international climate change obligations
  • Contributing to thought leadership on climate change issues
  • Discussions with government on climate change management
  • Engaging with businesses through Business Unity South Africa and Business Leadership South Africa on issues affecting the country and securing energy supply
  • Working with government, power utilities, industry and other stakeholders to ensure a financially viable, technically healthy and well-managed energy supply sector for South Africa

Strategic objectives

  • Transition at speed and scale
  • Become carbon neutral by 2050
  • Become a catalyst for economic growth and environmental stewardship
Further reading
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