Drivers
- Cable theft and derailments
- TFR challenges that include availability of locomotives,
inadequate maintenance regime, and financial difficulties
Treatments
- Develop alternative routes to evacuate export-bound coal
- Continuous engagement with TFR to understand issues and provide
assistance
Impacts
- Operational stoppages
- Financial loss
- Inability to meet contractual agreements
- Shareholder dissatisfaction on lower returns
Outlook
Operational and maintenance challenges are expected to continue to
have a significant impact on Exxaro. Sustainable solutions to
current challenges will be explored through proactive engagement
with Transnet and the industry.
Strategic objective impacted
- Make our minerals and energy businesses thrive
Material theme
Capitals impacted
Line of defence
Risk ranking
trend
Drivers
- Lack of fatal risk ownership and leadership support
- Under classification of critical controls to manage fatal risk
- Inadequate resource allocation to implement and manage critical
control
management programme
- Lack of safety and health involvement in the sourcing process
- Our business partners' health and safety compliance are not
aligned to
Exxaro maturity
- Employee behaviour
Treatments
- Implement critical control management programme with strong
emphasis
placed on the effectiveness of preventive controls
- Verify effectiveness of actions and learnings from incidents to
eliminate repeat incidents
- Management and verification of high-risk and non-routine tasks
to ensure
control effectiveness
- Visible felt leadership where management is provided with the
opportunities to identify gaps and improvements in management
systems
and behaviour while demonstrating their commitment to safety
Impacts
- Fatal health and safety incidents
- Operational stoppages
- High insurance premiums
- Loss of licence to operate
- Decrease in quality of life
- Section 54 by the Department of Mineral Resources and Energy
(DMRE)
- Loss of productivity (deaths, incapacity or sick leave)
Outlook
Our employees' safety remains a top priority. Although good safety
performance has been demonstrated in the recent past, we continue to
implement our safety strategy with a focus on safety improvement in
our
quest for zero harm.
Strategic objective impacted
- Make our minerals and energy businesses thrive
Material theme
Capitals impacted
Line of defence
Risk ranking
trend
Drivers
- Large number of devices connected (especially in operations) to
the corporate
network that need to be managed (security updates)
- Vulnerability due to lack of awareness – people exposing
Exxaro to
cyberattacks
- Employees can work remotely as per our working guidelines
- Sophistication of cyber attacks
- Exxaro has not implemented technical controls to restrict or
monitor the use of
removable media devices such as USBs
Treatments
- Ensure we have monitored security governance in place
- Stricter security practices and remediation of identified
weaknesses
- Conduct regular and ongoing security awareness
- Business continuity management plan and disaster recovery
testing
- Assess the current antivirus solution to improve the endpoint
protection
capabilities, which detect threats such as malware/ransomware on
endpoints
- Harden the operating system security settings to not allow any
software programs
to execute on endpoints, unless these programs have been
approved or whitelisted
- Access to USB ports will be blocked
- Implement a tool that monitors data movement
- Implement the use of privileged access management to manage
privileged
identities such as system administrator accounts
- Implement an extended detection and response tool (XDR) to
monitor and block
malware on endpoints
- Segregate the IT and OT networks
- Implement a backup and recovery solution to guarantee a clean
data backup and
boost disaster recovery capabilities
Impacts
- Revenue loss and reputational damage
- Exposure of confidential information
- Business interruption
- Legal and regulatory impacts (Protection of Personal Information
Act, 2013 (Act
4 of 2013) (POPIA) implications)
Outlook
The prevalence of cybersecurity attacks, specifically ransomware
attacks, is expected
to increase. We will continue to improve the robustness of the
cybersecurity
posture.
Exxaro continues to benchmark our cybersecurity profile to enhance
identification,
detection, response and recovery efforts, and our vulnerability
identification and
management efforts.
Strategic objective impacted
- Make our minerals and energy businesses thrive
Material theme
Capitals impacted
Line of defence
Risk ranking
trend
Drivers
- Effect of local political environment
- Slow implementation of reforms and policy certainty
- Instability associated with national government elections
- Unstable/failing local government leading to poor service
delivery
- South Africa's low GDP forecast
- High levels of poverty and unemployment
- Low investor confidence
- Low corruption perception index scoring, indicating prevalence
of corruption
Treatments
- Align our purpose with governance and ethics
- Continuously monitor independent country risk assessment report
- Establish and participate in collaborative regional development
platforms for
community
impact
- Develop renewables strategy that could result in new investment
and electricity
security
- Long-term investment perspective for growth, development and
impact
- Participate in municipal capacity building
- Ongoing engagement with Minerals Council and provincial and
local governments
- Strive for full compliance with relevant legislation for
business continuity
- Continued support of relevant business lobby groups to engage
business and
government
- Increased and improved analysis of dynamic political landscape
and impacts on
stakeholders
Impacts
- Possibility of community unrest for political support
- Stakeholder dissatisfaction
- Increased compliance burden
- Potential increase in royalties/taxes
- Reduced investment opportunities (increase in cost of capital)
- Increased cost of doing business (due to increased compliance
burden)
- Fewer opportunities for co-investment with government in
community development
- Breakdown in government relationships with Exxaro
- Higher expectation from society and government for more social
investment
Outlook
Social tensions and insecurity persist amid high levels of poverty,
income inequality
and
endemic unemployment (above 30%). With the national elections in
2024, the local
economy
will likely continue to face challenges like volatility from
political uncertainty
and
associated risks.
Strategic objective impacted
- Transition at speed and scale
- Make our minerals and energy businesses thrive
- Empower people to create impact
- Be carbon neutral by 2050
- Become a catalyst for economic growth and environmental stewardship
Material theme
Capitals impacted
Line of defence
Risk ranking
trend
Drivers
- Delays in approval of licences and authorisations
- Unable to achieve SLP targets as approved (annual and five-year
projects)
- Unable to meet legislative targets, eg Mining Charter and B-BBEE
- High community expectations for social investments and
procurement
opportunities
- BEE transaction unwinding
- Poor stakeholder communication about Exxaro achievements
Treatments
- Fulfil regulatory requirements within reasonable cost/expenses
- Structured engagement with regulators
- Supervision on execution of projects (SLPs)
- Compliance performance management
Impacts
- Suspension/cancellation of mining right or directive issued by
DMRE
- Reputational damage
- Financial loss
- Community unrest
- Production stoppages
Outlook
We will continue to focus on delivering on our commitments in line
with our
licence to
operate. Furthermore, the implementation of the Social Impact
strategy is
expected to
deliver greater impact on the communities where we operate.
Strategic objective impacted
- Make our minerals and energy businesses thrive
Material theme
Capitals impacted
Line of defence
Risk ranking
trend
Drivers
- Delayed implementation of SLPs and transformation (local
economic
development, human
resource development, local procurement, etc)
- Lack of participation of local community companies in the tender
process
- Influence of local community business forums on allocation of
opportunities
- High unemployment rate
- Loadshedding impacting SMMEs, resulting in job losses and fewer
opportunities for
local
employment
- Electioneering in the lead-up to and after the upcoming national
elections
in May
2024
Treatments
- Monitor implementation of SLPs
- Ongoing engagement with Minerals Council and local and district
municipalities,
among
others
- Ongoing investment in communities aligned to Social Impact
strategy
- Strike emergency response plans
- Regular participation at community forums
Impacts
- Potential harm to mine employees, contractors and community
members
- Disruptions to operations (prevent access to workplace)
- Reputational damage
- Financial loss
Outlook
An increase in the number of incidents is expected due to the
upcoming national
elections,
which could impact our operations.
Strategic objective impacted
- Make our minerals and energy businesses thrive
Material theme
Capitals impacted
Line of defence
Risk ranking
trend
Drivers
- Ageing infrastructure and assets unable to withstand extreme
weather
conditions
- Poor monitoring and reporting of climate change impacts. Lack of
forecasting
capabilities of extreme weather events
- Lack of forecasting of extreme weather events
- International and local investor sentiment against fossil fuels
- Increased stakeholder activism (NGOs and communities)
- Increased stringent local and international legislation (eg
carbon tax,
carbon
budget
and Climate Change Bill
- Competition between operations and communities for resources
such as water
can
emanate
due to climate impacts particularly in water stressed areas
Treatments
- Develop Exxaro’s decarbonisation roadmap (2050)
- Develop market intelligence on carbon pricing
- Diversify the portfolio into other minerals
- Engage government on policy and other key role players
- Invest in renewable decarbonisation initiatives
- Reduce carbon intensity per ton of product to reduce carbon
emissions
- Reduce our water intensity per tonne of product produced
- Develop financial model to cost impact of carbon tax
- Costing of individual projects that will contribute towards
decarbonisation
Impacts
- Increased cost of doing business
- Community protest
- Non-compliances associated with environmental emissions
- Energy security and supply
- Loss of production
- Natural disasters
- Equipment/infrastructure damage
- Possible fatalities and increased occupational incident rate
- Restriction in security of water
- Legal claims against heavy polluters
- Unable to secure insurance covers for operations
Outlook
Collaborate with value chain partners such as Eskom and the Council
for
Geosciences on
carbon
capture and storage for the mitigation of scope 3 emissions. Exxaro
operates in
line
with
our carbon neutral target.
Strategic objectives impacted
- Transition at speed and scale
- Become carbon neutral by 2050
- Become a catalyst for economic growth and environmental stewardship
Material theme
Capitals impacted
Line of defence
Risk ranking
trend
Report Index
IR