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

Who we are

Exxaro is a South African diversified resources company with existing coal mining operations and growth prospects in energy transition minerals, energy business and private rail infrastructure.

We are building Exxaro into a sustainable and impactful business that catalyses economic growth, principled governance, environmental stewardship and positive change.

Purpose

In line with Exxaro's purpose of powering better lives in Africa and beyond, our ambition is to provide resources (people, minerals, energy and capital) critical to ensuring the energy transition and low-carbon future.

Vision

We understand that we cannot grow sustainably without creating a positive impact on the environment and communities we serve. We are committed to responsibly maximising the value of our coal assets by reducing stranded assets, and playing an active role in creating a future that realises our vision: resources powering a clean world.

Values

Our success lies in the strength of our culture and values, which strengthen our resilience and ensure we deliver stakeholder value. Our values are:

  • Empowered to grow and contribute
  • Teamwork
  • Committed to excellence
  • Honest responsibility

Sustainable Growth and Impact strategy

The Sustainable Growth and Impact strategy is an integrated, multi-stakeholder approach to positioning the business for a resilient and sustainable future.

Business overview

Assets

R92.9 billion

at 31 December 2023

(2022: R85.1 billion)

Five coal mines*



Two windfarms and a solar project under construction

Coal product
42.5Mt
(including buy-ins)

(2022: 43.1Mt)

Market capitalisation
R71.4 billion


(2022: R75.9 billion)

Constituent of the JSE Top 40 Index

Renewable energy
727GWh

(2022: 671GWh)

Responsible business
30.81% black empowered

Among the top 30 in the FTSE/JSE Socially Responsible Investment Index

Ownership structure
* Including one joint venture, Mafube.
** Eyesizwe (RF) Proprietary Limited (Eyesizwe), a special purpose vehicle (SPV) private company, incorporated under South Africa's laws, holds the black economic empowerment (BEE) shares.
*** Exxaro Aga Setshaba NPC (formerly Matla Setshabeng NPC).
**** Industrial Development Corporation of South Africa.

Our assets

Our diversified asset portfolio comprises interests primarily in thermal coal (where we are among the top three South African coal producers), a growing energy solutions business and equity-accounted investments in ferrous (iron ore) and zinc, among other base metals.

Expanding our business portfolio to include manganese, bauxite, copper, energy and broader energy transition minerals enables our contribution to a more sustainable future and shareholder value enhancement. Our business interests in Europe comprise a marketing and logistics office in Switzerland. A joint operation with Anglo Coal Grosvenor Proprietary Limited, the Moranbah South project, is conducted in Australia.

We are aiming to be carbon neutral by 2050, and are committed to being an active participant in the just transition to a low-carbon economy. The energy solutions business and our scope 1 and 2 emissions reduction efforts are critical activities in this regard. Reduction of scope 3 emissions is a longer-term goal influenced by the country's energy mix.

Minerals business

Our minerals business comprises coal operations and our equity investments in iron ore and zinc. We have deep roots in mining with a track record of operational excellence and delivering value. Our coal asset base is a key differentiator and critical part of how we create value for our stakeholders.

Snapshot

  • Largest high-quality Coal Reserves remaining in the country, providing a platform for early value returns
  • One of the largest suppliers of coal to Eskom and ArcelorMittal South Africa Limited
  • 42.5Mt of thermal and metallurgical coal product (2022: 43.1Mt), down 1.4% in 2023 – the majority of power station coal is supplied to Eskom
  • Grootegeluk is one of the largest integrated mining and beneficiation operations globally, running the largest coal beneficiation complex, and the only producing mine in the coalrich Waterberg, adjacent to Eskom's Matimba and Medupi power stations
  • As at 31 December 2023, we invested R2.4 billion in sustaining our coal business (2022: R1.6 billion)

Energy business

In line with our goals to decarbonise and diversify, Exxaro's energy business comprises interests in energy through our wholly owned subsidiary, Cennergi. This business supports Exxaro's ambition of generating 1.6GW of power by 2030 and includes supporting our current coal and future minerals operations through self-generation and providing energy to external customers in mining and select markets.

Cennergi is a southern African-based independent power producer that focuses on developing, constructing and operating energy assets. Cennergi has two operational wind assets (the Tsitsikamma community and Amakhala Emoyeni windfarms).

Once operational, the LSP will supply solar energy to Grootegeluk, reducing the operation's carbon footprint and electricity costs. A pipeline of opportunities continues to be developed by the energy business for Exxaro and external offtake.

Snapshot

  • Cennergi's operating wind assets generated 727GWh of electricity (2022: 671GWh) – an 8% increase due to improved wind conditions, despite the 15GWh generation loss at one of the wind facilities due to an Eskom distribution line fault that occurred earlier in the year
  • The LSP at Grootegeluk reached financial close on 29 June 2023 under a 25‑year power purchase agreement with Exxaro Coal Proprietary Limited. Construction commenced in 2023 and commercial operation is expected in early 2025. Refer to the case study on leveraging solar power through the LSP (ESG report) for details
  • Cennergi's operating wind asset project financing of R4 348 million (2022: R4 554 million) will mature and be fully settled by the end of 2031. Cennergi's solar asset project financing will mature and be fully settled by the end of 2042
Limpopo
 
Mpumalanga
         
     

1

Grootegeluk complex

 

2

Thabametsi

 

3

Belfast

  Location   West of Lephalale   West of Lephalale   South of Belfast
  Market   Domestic and export   Domestic   Export (alternative domestic)
  Product   Thermal and metallurgical coal   Thermal coal   Thermal coal
  Coal Resources (inclusive)  
  • Measured: 2 978Mt
  • Indicated: 967Mt
 
  • Measured: 270Mt
  • Indicated: 749Mt
 
  • Measured: 98.4Mt
  • Indicated: 8.0Mt
  Coal Reserves  
  • Proved: 1 971Mt
  • Probable: 550Mt
 
  • Probable: 130Mt
 
  • Proved: 33.2Mt
  • Probable: 1.4Mt
  Mining method   Open-cut   Open-cut
  Open-cut
  Run of mine (RoM)   56.05Mt   0Mt   3.16Mt
  Life of mine (LoM)   18+ years*   23 years   10 year

 

Mpumalanga
         
     

4

Leeuwpan

 

5

Matla

 

6

Mafube joint venture (50%)

  Location   South-east of Delmas   West of Kriel   East of Middelburg
  Market   Domestic and export   Domestic (Eskom)   Domestic and export
  Product   Thermal coal   Thermal coal   Thermal coal
  Coal Resources (inclusive)  
  • Measured: 63.4Mt
 
  • Measured: 634Mt
  • Indicated: 92Mt
 
  • Measured: 141.0Mt
  • Indicated: 2.2Mt
  Coal Reserves  
  • Proved: 30.5Mt
  • Probable: 3.3Mt
 
  • Proved: 126Mt
  • Probable: 31Mt
 
  • Proved: 82.6Mt
  • Probable: 32.0Mt
  Mining method   Open-cut   Underground
  Open-cut
  Run of mine (RoM)   4.82Mt   6.01Mt   4.79Mt
  Life of mine (LoM)   6 years   1+ years*   20 years

* Adequate Reserves well beyond expiry of mining right.

Australia
 

7

Moranbah South project (50%)

  Phase: Undertaking prefeasibility study to inform decision for development prospects.
  Location: Queensland, Australia
  Market: Export
  Product: Coking coal
  Coal Resources:
  • Measured: 484.6Mt
  • Indicated: 226.0Mt
Eastern Cape
 
Limpopo
         
     

8

Tsitsikamma
community

 

9

Amakhala Emoyeni

 

10

LSP

  Location   Near Tsitsikamma   Near Bedford and Cookhouse   Lephalale
  Product   Wind energy   Wind energy   Solar energy
  Capacity   95MW   134MW   68MW
  Equipment   31 x 3.1MW turbines   56 x 2.4MW turbines    
  Performance   Adjusted P50 in the long term   Adjusted P50 in the long term   Reached financial close June 2023
  Customer   Eskom   Eskom
  Exxaro Coal Proprietary Limited
(Grootegeluk)
  Commercial operation   2016   2016   2025
  Power purchase agreement   20 years   20 years   25 years
  Shareholding   Cennergi (75%), RE Times (16%) and the Tsitsikamma Development Trust (9%)   Cennergi (95%), Cookhouse Community Trust (2.5%) and the Bedford Community Trust (2.5%)   Cennergi (100%)

 

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ABOUT EXXARO
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Building momentum and resilience for sustainable growth and impact
About this report
Delivering sustainable value creation
Snapshot of our long-term value creation

OUR BUSINESS
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Chairperson's statement
Who we are
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How we create value
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Our business model
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Strategically positioning the business for growth
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CEO's report
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Building resilience through governance
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Our leadership
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OUR PERFORMANCE
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OUR MINERAL RESOURCES AND MINERAL RESERVES
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ADDITIONAL INFORMATION
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