Board key matters in focus

Strategic direction, risk and performance

As sustained value creation requires responsiveness to significant social and environmental challenges, we annually assess our strategy and formally present it to the board for approval. After a two-day strategy session, the board reaffirmed the Sustainable Growth and Impact strategy while monitoring its progress and execution. The inclusion of energy transition minerals into the growth pipeline was noted.

The strategy development and review process follows a risk and opportunity assessment, including emerging risks and material sustainability issues. The ESG framework remains the lens through which the Sustainable Growth and Impact strategy is viewed.

The top five risks for 2024 and key events we anticipate may impact our ability to achieve our strategic imperatives for 2025 include:

Geopolitical and competition risks have also emerged as areas requiring further investigation by the executive risk committee to assess the potential impact on the strategy.

Our strategic performance management dashboard enables visibility of strategy execution and facilitates strategic conversations at the right time within a tiered group governance structure.

Coal mine dust class action

As reported previously, a coal mine dust class action litigation was launched against Exxaro on 23 November 2023. The action relates to mineworkers who contracted coal mine dust lung disease in the form of pneumoconiosis caused by exposure to coal mine dust at various Exxaro mines, as well as dependants of those mineworkers who have died and whose deaths were probably attributable to coal mine dust disease.

Exxaro has duly served and filed our answering affidavit. The Deputy Judge President assigned the dates for the certification hearing, which will take place from 25 November 2025 to 5 December 2025.

Exxaro takes our health and safety obligations seriously. Our management team continues to work on addressing risks and ensuring preventive measures are properly implemented to address the potential of any novice occupational health diseases at our operations.

Managing rail risk

In response to Exxaro's top risks for the past few years and the possible impact on our sustainable growth, the board logistics committee was established early in 2023 to report to the board on:

• The development of long-term solutions for logistics access to international markets
• The identification of medium-term solutions and alternatives and related matters

The logistics committee is monitoring the reform taking place in South Africa, with government assuming more responsibility for rail reform, as evidenced by the gazetting of the Rail Network Statement at the end of 2024. The committee also considered a prefeasibility study focusing on alternative solutions to increase rail infrastructure capacity.

Climate change response

We believe our greatest opportunity is to help steer South Africa towards a sustainable future by focusing on low-carbon minerals and energy with the goal to be carbon neutral by 2050.

The board goes beyond compliance and responds to climate change through its commitment to mitigating the impact of climate change with our robust Sustainable Growth and Impact strategy. In addition, a peer review of Exxaro's decarbonisation roadmap has commenced to ensure its credibility and subsequent implementation. Included in the review process is the climate transition action plan.

Our board ensures effective oversight of climate-related impacts, risks and opportunities through the SERC and RBR committee.

In October 2024, the board held a governance session where it considered climate interactions as well as water challenges and trends.

Transitioning into a low-carbon business and climate change mitigation

Climate Change Response strategy report

Adapting to a changing context

The first five months of 2024 saw significant local and global shifts, accelerating industry change and shaping opportunities for Exxaro's Sustainable Growth and Impact strategy.
The transition to a low-carbon economy and global energy security concerns remain key industry drivers. With nearly 50% of the world undergoing elections, the board assessed the potential socio-political and geopolitical impacts on Exxaro and the broader sector.

The board's strategy session was themed “positioning Exxaro to win” and included engagement with experts on topics including commodity market trends, merger and acquisition (M&A) growth opportunities and the evolving global energy landscape, including competitive dynamics and investment prospects.

Divestment of non-core assets and investments

Exxaro has made significant progress in disposing of our entire shareholding in Exxaro FerroAlloys Proprietary Limited, with the sale and purchase agreement expected to be concluded in the 2025 financial year.

Innovation

The board approved a refreshed innovation strategy, enhancing business resilience through digitalisation, AI and automation. With the evolution of AI, we aim to go beyond visualisation to prescriptive analytics through advanced solutions such as digital twins, further strengthening our data-driven decision making capabilities. By leveraging data science and AI, we enhance automation based on pre-programmed actions while advancing our automation journey.

The integrated Mineral Resource Management lever, powered by AI, will enable us to drive Resource intelligence. Predictive maintenance will help the organisation evolve towards smart assets that not only anticipate potential failures but also recommend the most effective corrective actions improving efficiencies.

The refreshed iNNOVAXXION will be deployed safely and responsibly, supported by our robust governance and risk management structures and policies. This will unlock untapped value and support our Sustainable Growth and Impact objectives.

Driving innovation

Governance roadshow 2024

We held our annual governance roadshow for domestic equity shareholders from 30 September to 2 October 2024. A series of meetings was held with shareholders representing 69.43% of Exxaro's total domestic shareholding.

Key issues included performance conditions in the Exxaro incentive scheme, remuneration-related ESG measures and the deferred bonus plan, which was a shareholder concern in previous years. Given the feedback received from shareholders in recent years, Exxaro undertook a detailed review of the incentive schemes.

The progress with Exxaro's vertical and horizontal wage gap was discussed along with the potential impact of the recently promulgated legislative disclosure requirements. The company is confident that work in this regard is well advanced and will consider commencing with disclosure pertaining to the wage gap.

Changes to the board and management

In terms of paragraph 3.59(b) of the JSE Listings Requirements, shareholders were informed on 6 February 2025 of Dr Nombasa Tsengwa's resignation. The board thanks Dr Tsengwa for her years of service and wishes her all the best in her future endeavours.

Following an expedited and targeted selection process, the board appointed Bennetor (Ben) Magara as the incoming CEO, effective 1 April 2025. As such, Ben will no longer be categorised as an independent non-executive director and succeeds acting CEO, Riaan Koppeschaar, who continues in his role as FD.

Together with an experienced management team, the board is confident that the company will stabilise and be led by focusing on meeting customer demand, driving safe, disciplined and efficient production, while creating value for stakeholders.

Board diversity and independence

In terms of King IV and our directors' nomination and appointment policy, we annually review the structure, size and composition (including the skills, knowledge and experience) of the board and board committees.

The following directorship changes occurred:

Board composition, diversity and experience

ESG governance

Exxaro integrates ESG considerations into operations through a tiered governance structure (shown below), ensuring alignment with our Sustainable Growth and Impact strategy. The board sets the strategic direction for sustainability, defining committee and individual responsibilities for overseeing ESG-related risks, impacts and opportunities. These responsibilities are embedded in board and committee terms of reference, annual work plans and policies.

While the board sets ESG strategy and performance targets, the executive team is responsible for managing and monitoring ESG risks and impacts, supported by management and various committees.

The ESG steering committee ensures the integration of decarbonisation and other critical ESG factors and is responsible for developing and reviewing an ESG framework policy for board approval.

To reinforce the importance of highlighting ESG in everything we do, all board, committee and executive reports must include an assessment of strategic, financial and ESG-related risks.

Governance in action

The below outlines the board's quarterly progress in addressing our material themes to achieve our governance outcomes.

Area	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Material themes
Board engagement	First quarter board meeting	Second quarter board meeting Special board meeting to approve the group and company annual financial statements and integrated report Annual strategy sessions with executive and management	Third quarter board meeting	Fourth quarter board meeting: 100th board meeting and budget review Board site visit to Grootegeluk coal mine and LSP
Stakeholder engagement	2023 financial results presentation Participation in the Mining Indaba: "Unlocking African Mining Investment: Stability, Security, and Supply"	AGM: shareholder election of audit committee and SERC members, auditors and approval of remuneration policy and implementation through the non-binding advisory vote FD's pre-close	2024 interim financial results presentation Governance roadshow	FD's pre-close
Board performance	All meetings commence with confirmation of declarations of interest	Reviewed benchmarking of non-executive director fees for recommendation to shareholders in 2025	Board composition review including appropriateness of the size of the board Declarations of interest. This was extended to include a review of the roles directors hold on other JSE-listed companies Performance against Exxaro's DEI targets was measured (and met) Committee composition review to ensure all committees are adequately composed and skilled The skills set (against which the board measures itself) was better defined to ensure it encompasses the experience necessary to govern the organisation towards its prevailing strategic objectives	Non-executive director independence categorisation Internal board performance evaluation interviews (next external evaluation is due in 2026) Performance evaluation of the company secretary Board committee performance evaluations commenced
Continuous development of the board	SERC training: ESG reporting and assurance knowledge sharing (ISSB standards, ESRS updates)	Governance session: Risk – economic landscape, strategic risk report, cybersecurity SERC and remuneration committee training: proposed Companies Amendment Bill	Strategy workshop: commodities outlook, M&A landscape and insights, energy markets Governance session: water challenges and trends, climate interactions, the Companies Amendment Act, 2024 (Act 16 of 2024) (Companies Amendment Act), JSE Listings Requirements when applicable, and roles and responsibilities of the board, committees and executive committee
Safety	All meetings commence with a safety moment and monitoring of frequency of safety incidents and occupational health incidents		Safety leadership days at all sites to ensure VFL
Growth performance	Noted progress on various acquisition, divestment, and investment opportunities Approved the Resource and Reserve statement	Reaffirmed the Exxaro Sustainable Growth and Impact strategy and the inclusion of energy transition minerals into the growth pipeline	The CEO roadshow, where the CEO and executive committee provided an update on the Exxaro strategy, which was rolled out to all BUs
Risk	Approved the delegation of authority	Noted no significant changes to the strategic risk report but requested consideration of country risks applicable to Exxaro operations	Noted the strategic risk report	Approved the group ERM framework, risk appetite approach and risk appetite statement Approved the revised group delegation of authority
Environmental sustainability		Reviewed the strategic logistics programme	Noted the progress made on the decarbonisation plan and roadmap	Monitored the performance of the Amakhala Emoyeni windfarm and Tsitsikamma community windfarm Monitored the progress of the LSP construction and visited the site in November 2024 Reviewed energy efficiency and rehabilitation initiatives being planned by the business
Social sustainability	Considered the coal mine dust class action litigation matters that were launched in 2023 Considered the new Political Party Funding Act 2018 to ensure alignment and approved a donation of R25 million to the Independent Electoral Commission Multi-Party Democracy Fund	Noted an increase in B-BBEE compliance to level 2 and the organisation's progress on the DEI strategy Noted the amended Employment Equity Act and management's approach to alignment	Took due notice of the relocation of the Sindane family to ensure the matter was handled with care and dignity
Economic sustainability and governance	Approved the group year-end financial results and IFRS announcement Approved the integrated suite of documents for publication, including the King IV report and JSE compliance certificate Approved a dividend and special dividend payment to shareholders Approved the registration of a bond programme	Approved the integrated ESG framework Approved the strategic performance management dashboard	Approved dividend distribution to shareholders Approved the group interim financial results, IFRS announcement and interim dividend declaration Approved financial assistance to subsidiaries as contemplated in sections 44 and 45 of the Companies Act	Approved the group consolidated budget, the coal consolidated budget and the energy budget for financial year 2025 and noted the 2026 forecast Approved the integrated report material matters Oversaw the development of cascading strategic KPIs to ensure holistic monitoring and execution of Exxaro's strategy Approved the revised supply chain management sustainability policy
People and performance	Noted the EEA2 and EEA4 remuneration report submissions and that most targets set were achieved		Noted the coal negotiating landscape as it moved from a single to a multi-union context	Considered that the energy industry will need to invest in future-ready skills development Considered the two-pot retirement savings framework that took effect in September 2024 and the effect on the contribution structure Noted the wage gap statement of intent, approved by the remuneration committee
Appointments	Appointed independent non-executive director, Nosipho Molope	Appointed Michelle Nana as group company secretary