Our supply chain sustainability activities integrate supply chain choices that support socio-economic development, preferential procurement, ethical conduct and our climate change response. We recognise our responsibility to mitigate climate change, which is an ongoing focus as we assess its effects on our business.
Contributed significant value to local communities through targeted procurement initiatives
Updated our supply chain sustainability policy
To achieve Exxaro’s economic development and decarbonisation goals through the participation of black-owned suppliers from our host communities and procure green products
KPIs:
Our supply chain sustainability strategy and policy support the objectives our Sustainable Growth and Impact, Social Impact and DEI strategies.
Empower people to create impact
Suppliers and host communities
To promote the participation of black‑owned SMMEs and contribute to local economic development
Minerals Council
To collaborate with industry peers in achieving shared supply chain sustainability objectives
Future focus
Our future focus areas include:
Sustainable procurement and supply chain processes are critical components of our social and environmental responsibilities as we are sensitive to South Africa’s socio-economic challenges, and the effects of climate change on our supply chain.
Our supply chain sustainability strategy and policy aim to meet the expectations of customers, regulators and investors by:
We updated our supply chain sustainability policy in 2023 to include strategic priorities integrated with Exxaro’s ESG imperative.
Governance
Cennergi monitors its procurement share from B-BBEE suppliers, QSEs, EMEs and women-owned vendors against commitments and targeted percentages in the implementation agreement between Cennergi and the DMRE.
Tsitsikamma community windfarm and Amakhala Emoyeni have set procurement goals of 60% total procurement from B-BBEE suppliers, 10% from QSEs and EMEs, and 5% and 2.5% respectively from women-owned vendors. The LSP has set procurement goals of 40% from B-BBEE suppliers, 10% from QSEs and EMEs, 3% from women-owned vendors and 3% from youth-owned vendors.
The relevant procurement committees are responsible for oversight.
Case study:
Unlocking social impact through contractor development
Our contractor development partnership with GIBS empowers emerging entrepreneurs to run sustainable businesses in our host communities.
GIBS provides business education and training, including mentorship, that enables Exxaro’s preferred suppliers to contribute meaningfully to local economic development for the benefit of their families and communities at large. The accredited course includes customised mining and Exxaro-specific content to maximise its impact and relevance.
Since its launch in November 2020, 65 black-owned local contractors participating in core areas of our mining value chain have graduated from the 12-month online programme. Based on the mutual benefits of this programme, aligned with our Social Impact strategy and preferential procurement targets, we enrolled 50 participants in 2023.
Directed over
R1.3 billion
of our procurement spend to 263 local black-owned SMMEs
Awarded local contracts worth
R1.9 billion
to 31 suppliers
Developed support structures for black contractors
Simplified the contractor onboarding process with a supplier portal
We drive ethical and sustainable procurement through our supplier onboarding process, which ensures suppliers understand our policies, and by ensuring our suppliers comply with conflict of interest guidelines.
Exxaro fully complies with the requirements of the B-BBEE codes for preferential procurement. We achieved an overall score of 26.4 (2022: 26.9) against a target of 29.
Preferential procurement in 2023 (%)
| 1 | Procurement from entities with R10 million to R50 million annual turnover. |
| 2 | Procurement from entities with less than R10 million annual turnover. |
| 3 | Procurement from suppliers who are at least 51% black owned. |
| 4 | Procurement from suppliers who are at least 30% black women owned. |
| 5 | Procurement from suppliers who are at least 51% designated group owned (entities owned by black youth, black military veterans, black people with disabilities and black people living in rural areas). |
Cennergi met its preferential procurement targets for 2023 and did not incur any termination points.
As a mining right holder, Exxaro is required to meet prescribed targets for procuring mining goods and services from preferred groups.
Our inclusive procurement programme focuses on procuring mining services from black youth and black women-owned companies. We achieved our target of 40 points (2022: 40) on the Mining Charter III scorecard.
Mining Charter III – services procurement performance (%)
| 1 | Procurement from entities with more than 25% black ownership and at least level 4 on the B-BBEE scorecard. |
| 2 | Procurement from entities with historically disadvantaged people as majority owners. |
| 3 | Procurement from entities with black women as majority owners. |
| 4 | Procurement from entities with black youth as majority owners. |
Mining Charter III – goods procurement performance (%)
| 1 | Procurement from entities with historically disadvantaged people as majority owners. |
| 2 | Procurement from entities with black youth as majority owners. |
Report Index
IR