Exxaro drives sustainable growth and reduces supply chain risks by embedding socioeconomic development and environmental responsibility into procurement practices. Through the adoption of our supplier code of conduct and supply chain sustainability policy, we have demonstrated success in leveraging our procurement spend to empower local black-owned SMMEs and deliver on our preferential and green procurement commitments.
Recognising the cash flow challenges faced by many small businesses, Exxaro launched an initiative offering early payments for services and goods provided by our SMMEs.
The initiative targets the settlement of invoices from SMME vendors within 15 working days, significantly ahead of standard payment terms, thereby enhancing cash flow and helping these businesses thrive. Since the launch of the programme, Exxaro has paid over R1.5 billion to 1 205 SMMEs in accordance with the set favourable payment terms. Timely access to funds has proven especially critical for smaller vendors, enhancing their financial resilience and market competitiveness.
By prioritising prompt settlement, Exxaro has also strengthened relationships with our SMME vendors, increasing trust by demonstrating a tangible commitment to supporting SMMEs.
Incorporating the principles of sustainability in our supply chain is one way of demonstrating our sensitivity to the environmental and socio-economic challenges facing South Africa. This is underpinned by:
Accountability and responsibility
Performance measures and decision-making structures within Exxaro are in accordance with the relevant governance practices.
Regulatory compliance
Aligning our inclusive procurement targets with guidance as set out in the MPRDA, Mining Charter III and B-BBEE codes.
Beyond compliance
Where opportunity allows, Exxaro achieves performance above regulatory targets.
CENNERGI
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 DEE.
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.
Since updating our supply chain sustainability policy in 2023, we have progressed against our ESG imperatives and supply chain priorities as follows:
Environmental
Social
Governance
Dominant supply chain governance themes include:
We monitor and review procurement data, enabling us to assess our progress on green procurement. Our efforts in enhancing our systems to track and report green procurement are part of a continuous improvement in this area.
Key initiatives include:
| 2024 | 2023 | 2022 | ||
| Procurement spend directed to local black-owned SMMEs | R1.08 billion | R1.3 billion | R1.09 billion | |
|---|---|---|---|---|
| Number of local black-owned SMMEs supported through procurement spend | 291 | 263 | 246 | |
| Value of local contracts awarded | R1.2 billion | R1.9 billion | R0.53 billion | |
| Number of local vendors awarded contracts | 38 | 31 | 38 |
We drive ethical and sustainable procurement through:
Our e-procurement software reduces the risk of fraud and maintains cost efficiency.
Exxaro fully complies with the requirements of relevant regulations on preferential procurement.
CENNERGI
Cennergi met its preferential procurement targets for 2024 and did not incur any termination points.
| 1.15% spent on resource-efficient procurement | 0.92% spent on energy-efficient procurement |
| 0.48% spent on environmental preferable procurement | 6.40% spent on reverse logistics |
| Combined 8.9% spent on green procurement | |
As a mining right holder, Exxaro measures our inclusive procurement by assessing our performance against Mining Charter III for procuring of mining goods and services from designated groups. Exxaro maintained the achievement of our target of 40 points (2023: 40) on the Mining Charter III in 2024.
Mining Charter III β 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 HDP 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 β goods procurement performance (%)
| 1 | Procurement from entities with HDP as majority owners. |
| 2 | Procurement from entities with black youth as majority owners. |
Our primary focus in 2025 will be:
IR