More so, South Africa's evolving energy transition and infrastructure reforms present opportunities for long-term growth.
Against this backdrop, we remain focused on positioning Exxaro to win, leveraging portfolio diversification and disciplined capital allocation to strengthen our presence in energy transition minerals and energy solutions. We are well placed to capitalise on shifting energy dynamics, ensuring that our strategy not only reinforces resilience but also drives long-term, sustainable value creation.
Exxaro's Sustainable Growth and Impact strategy keeps the group resilient and future-focused, with disciplined capital allocation underpinning our efforts to transition at speed and scale. In 2024, we advanced our diversification strategy by actively evaluating energy transition mineral opportunities, including manganese and copper - essential for clean energy. At the same time, the energy solutions business continued to expand, with the LSP under construction and set for commercial operation in mid‑2025. Momentum in renewable energy remains strong, with projects such as Cennergi's Karreebosch Wind Farm (RF) Proprietary Limited (Karreebosch) deal enabling progress towards the group's ambition of 1.6GW of capacity.
Exxaro's strategic focus on disciplined capital allocation, operational efficiency, and financial resilience continues to deliver strong performance and shareholder returns.
Mvuleni Geoffrey Qhena – Chairman
Refer to the acting CEO and FD's report for more details.
A key part of our strategy to make our minerals and energy businesses thrive is the continued expansion of our energy operations, as described above, supported by a focused effort to optimise our minerals and energy solutions portfolio. By optimising coal reserves, we are meeting current energy demands while transitioning responsibly towards a low-carbon future, mitigating the risk of stranded assets and positioning the group to benefit from green economy opportunities.
Additionally, and in support of long-term sustainability, we are streamlining the portfolio by divesting non-core assets. Significant progress has been made in the sale of the entire shareholding in FerroAlloys to a preferred bidder, with broad-based participation including management and employees. These actions enable the redeployment of capital into higher‑impact areas, including energy transition minerals, further strengthening the group's minerals and energy solutions businesses group's minerals and energy solutions businesses.
As Exxaro continues to empower people to create impact, the group remains committed to equipping our workforce with the capabilities, skills, and mindset required to achieve our long-term ambitions. The group achieved 28 consecutive months without a work-related fatality, with several operations reaching significant safety milestones.
As part of our strategic objective to be carbon neutral by 2050, Exxaro developed a medium to long-term decarbonisation roadmap and a draft climate action transition plan. A peer review of the roadmap is underway, reinforcing the group's commitment to responsible environmental stewardship. The board also conducted a governance session on climate risks, underscoring its role in guiding Exxaro's transition strategy and ensuring our carbon neutrality ambitions translate into meaningful impact for stakeholders.
We continue to become a catalyst for economic growth and environmental stewardship, embedding shared value creation across our operations. In 2024, the group invested R2.1 billion in social initiatives, including R28 million through Cennergi. Enterprise and supplier development efforts supported more than 500 black-owned SMMEs while the early childhood development (ECD) programme reached over 2 700 children and enhanced more than 40 ECD centres. Exxaro also advanced digital access by connecting 27 schools to Wi-Fi and equipping 20 with information and communications technology labs. Through our minerals succession programme, the group invested R63 million to support over 660 farmers - 53% women and 24% youth - across various cover 660 farmers - 53% women and 24% youth - across various provinces, resulting in the harvest of more than 6 000 tonnes of produce despite challenging weather conditions.
These investments reflect a broader commitment to transformation, further reinforced by the progress of our empowerment deal. Eyesizwe RF shareholders committed to maintaining Exxaro's 30.81% empowerment shareholding until 2027 - a significant milestone that secures the group's empowerment credentials and affirms our standing as one of South Africa's largest black-empowered and diversified mining companies. In line with this, Exxaro also maintained our B-BBEE Level 2 status, a significant performance compared to our industry peers.
The board is proud of the organisation's strategic execution, disciplined capital management, and a clear sustainability vision, ensuring that Exxaro remains well positioned to navigate evolving market dynamics, accelerate our transition strategy, and unlock new opportunities for growth.
As expanded in the acting CEO and FD's statement, despite a difficult macro-economic environment, Exxaro maintained a return on capital employed (ROCE) of 23% compared to 35% in the 2023 financial year, which still exceeds the internal threshold of 20% and demonstrates our ability to drive value creation and capital efficiency. Despite a decrease in EBITDA and headline earnings per efficiency. Despite a decrease in EBITDA and headline earnings per share (HEPS), we were able to maintain a robust cash generation, strengthening the balance sheet and liquidity position. Exxaro's net cash increased to R16.3 billion compared to R14.8 billion at the end of 2023 (excluding energy's net debt), providing the financial flexibility to pursue growth opportunities while ensuring sustainable shareholder returns.
Reflecting confidence in Exxaro's strong financial position, the board approved a final dividend of 866 cents per share, reinforcing our commitment to returning capital to shareholders. In addition, the board initiated a R1.2 billion share repurchase programme, demonstrating confidence in the group's long-term value proposition and disciplined approach to capital management.
to deliver long-term value. The board remains committed to transparent, inclusive engagement that balances diverse stakeholder interests while enabling the group to navigate external challenges and contribute meaningfully to socio-economic development.
In 2024, the board's logistics committee continued to oversee Exxaro's response to infrastructure challenges, including rail reform and market access. Labour relations remained stable, underpinned by a three-year wage agreement concluded with all recognised trade unions. The group also maintained its strong focus on workplace health and safety, upholding leading practices.
The investment committee remains central to advancing Exxaro's growth strategy, with the board maintaining ongoing engagement with investors on capital allocation and diversification. In 2024, the committee assessed various energy and minerals opportunities through a disciplined framework aligned with strategic, financial, and governance criteria.
As previously reported, class action litigation was launched in 2023 on behalf of current and former mineworkers diagnosed with coal mine dust lung disease, including the dependants of deceased workers. Exxaro has filed an answering affidavit, and a certification hearing is scheduled for the last quarter of 2025. The board continues to monitor the matter closely, reaffirming Exxaro's commitment to our health and safety obligations and to treating the legal process with the seriousness and respect it deserves.
The 2024 governance roadshow once again highlighted the value of investor dialogue, shaping refinements to governance, remuneration, and disclosure practices. These engagements reinforce Exxaro's commitment to responsible leadership and stakeholder-informed decision-making that supports inclusive, lasting impact.
Our FD, Riaan Koppeschaar was appointed acting CEO following the precautionary suspension of the CEO, Dr Nombasa Tsengwa in December 2024, and her subsequent resignation in February 2025. Ben Magara was appointed CEO effective 1 April 2025. Ben is a qualified mining engineer and a highly regarded mining veteran with over 35 years' industry experience in both soft and hard rock mining at underground and open-pit operations. He brings added continuity and strategic insight, drawing on his experience as chairperson of the investment committee, as the group accelerates our transition into a diversified minerals and renewable energy business.
In line with this, the investigation of our chief coal operations officer was not concluded at the time of the publication of the 2024 integrated report. To reiterate the board's view, the investigation is a neutral act that presumes no outcome, and an independent legal firm is supporting the board to conclude the investigation as quickly as thoroughness allows. The board's actions will be informed by the outcome of the investigation.
The board remains committed to upholding the highest standards of governance and oversight while managing the leadership transition, emphasising strong leadership qualities as a paramount enabler for strategic success, future-fit skills, and ensuring we maintain a capable and transformed executive leadership team. The board remains confident in Exxaro's strategic direction and the resilience of our leadership team in guiding the company.
While global uncertainty persists – including changing legislation, trade dynamics, and inflationary risks – renewed domestic stimulus and China's expansionary policy are expected to support commodity demand in 2025. Exxaro continues to advance our growth strategy in energy transition minerals and remains focused on opportunities aligned with our investment criteria. Cennergi is progressing towards its 2030 target of 1.6GW in managed capacity. On behalf of the board, I affirm that our strategy remains intact, positioning Exxaro to win through our robust Sustainable Growth and Impact strategy.
In closing, I extend my sincere appreciation to the executive team, led by Riaan, for steady leadership during a time of transition and the professional manner in which they conducted business. Let me also thank the rest of our employees for ensuring the continued delivery of consistent results. Lastly, I thank my fellow board members for their support during this period.
A warm welcome to Ben as he steps into the role of CEO. I am certain that Exxaro will grow to new heights under his leadership.
To our stakeholders, thank you for your trust and support. As we look to the future, we do so with a renewed sense of purpose, confident in our strategy and focused on delivering results and sustainable impact in a rapidly evolving world.
Mvuleni Geoffrey Qhena
Chairman
15 April 2025
IR