Exxaro Resources Limited
Environmental, social and governance report for the year ended 31 December 2024 
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Stakeholder-inclusive approach

At Exxaro, we remain steadfast in our commitment to a stakeholder-inclusive approach. We prioritise transparent and meaningful engagement with all stakeholders, ensuring their perspectives and needs are integral to our decision-making processes. This approach fosters trust and aligns with our core values of accountability and inclusivity.

17

PARTNERSHIPS FOR THE GOALS

Contributing to SDG 17

Our sustainable development and business success are built on mutually beneficial stakeholder relationships.
By collaborating with stakeholders, we leverage opportunities, mitigate risks and respond to issues facing our business in a responsible and effective manner.

Our approach to engagement

We take a strategy-led, outcomes-based approach to stakeholder engagement to ensure we build intentional and meaningful relationships. Our stakeholder engagement procedures clarify why these relationships are important and how to approach them. Our stakeholder engagement policy, plans and principles support these procedures. Our approach ensures we address stakeholder issues, manage risks, leverage opportunities and deliver on our strategic objectives.

Exxaro's board and executive committee are responsible for stakeholder management and engagement.

Read about how we are engaging with stakeholders on our climate commitments.

Stakeholder universe

We regularly identify and analyse our stakeholders, assessing how our activities impact them and how they impact our ability to deliver on our strategy, contribute to our ESG performance and address risks. We categorise our stakeholders into four key groupings (government, business, communities and value chain participants) and identify relevant engagement objectives and response strategies as required.

Government

  • Government departments
  • Local government
  • Political parties
  • Provincial government
  • District municipalities
  • Regulators

Business

  • NGOs
  • Media
  • Professional industry bodies
  • Other mining organisations
  • Universities
  • Financial community
  • Non-profit organisations

Communities

  • Local media
  • Faith-based organisations
  • Taxi associations
  • Farmers and landowners
  • Other mining companies
  • Local small, medium and micro enterprises (SMMEs)
  • Local leadership
  • Local schools
  • Traditional leaders

Value chain participants

  • Unions
  • Investors/shareholders
  • Strategic and other suppliers
  • Partners
  • Sponsors
  • Customers
  • Employees

Quality of our relationships

The quality of our stakeholder relationships and how we manage these affect our ability to deliver on our strategy. We measure the quality of our relationships with our stakeholders through self-assessments.

 Government  Our good relationship with this stakeholder has room for improvement

Detailed disclosure:

 Our social impact

Stakeholders in this category include the Department of Mineral Resources and Energy (DMRE)*, Department of Health (DoH), dtic, Department of Cooperative Governance and Traditional Affairs, the Presidency, Presidential Climate Change Commission, premiers and local municipalities.

Engagement purpose

  • Keep government informed about strategic developments
  • Collaborate to find solutions to socio-economic challenges
  • Partner on mutually beneficial projects
  • Participate in shaping policies
  • Invest in South Africa's socio-economic development
  • Seek support to drive business resilience and manage country risks
  • Demonstrate our ESG performance and how we respond to increasing demands, responsible environmental management and community commitments

Engagement methods

  • One-on-one, in-person and virtual engagements
  • Dialogue platforms
  • Events and sponsorships
  • Quarterly reports

Stakeholder expectations and issues

  • Through industry bodies, businesses have raised logistics issues (such as availability of locomotives, inadequate maintenance regime, financial difficulties, and physical security) and mines have highlighted local service delivery challenges. Both seek to work together and with government to resolve these issues
  • Government expects businesses to manage water responsibly, minimise negative environmental impacts, and overcome climate change issues
  • Government expects mines to plan for post-mine closure, job creation, and broader community upliftment
 Our response  How we create value
  • Sharing our diversification plans with the DMRE's director general
  • Engaging regularly with the DMRE on SLP initiatives, including planning and reporting
  • Executing our Sustainable Growth and Impact strategy
  • Implementing the Social Impact strategy
  • Participating in the Business Leadership South Africa B20 engagements with the minister of finance
  • Processing and managing requests for information through the Promotion of Access to Information Act, 2002 (Act 2 of 2002)
  • Liaising with the Independent Electoral Commission's chief executive for party funding to confirm the process for Exxaro's R25 million contribution to democracy in South Africa, and with the commission's outreach department to understand their voter education programmes as input for a review of our political donations policy
 In 2024, we spent:
  • R2.1 billion on socio-economic development through SLP projects that include local procurement, infrastructure, skills and SMME development and R122.4 million on corporate social investment (CSI) initiatives
  • R1.7 billion on employee tax and R4.8 billion on tax payments to government
* Government is restructuring the DMRE, which will be replaced by the Department of Mineral and Petroleum Resources, and the Department of Electricity and Energy. The DMRE remained the
official regulatory body at the time of reporting.
 Regulators  Our good relationship with this stakeholder has room for improvement

Detailed disclosure:

Our environmental stewardship, social impact

Exxaro aims to go beyond compliance in our business activities. Stakeholders include the DMRE, Department of Water and Sanitation (DWS), Water Tribunal, Department of Forestry, Fisheries and the Environment (DFFE), Department of Employment and Labour (DEL) and the JSE.

Engagement purpose

  • Manage compliance with regulatory requirements to ensure business sustainability
  • Maintain strong relationships with stakeholders at international, national and provincial levels
  • Assist with relevant applications to secure our licence to operate
  • Collaborate in shaping policies
  • Ensure the success of our current and future businesses
  • Communicate and demonstrate how we respond to issues relevant to government, industry and society while delivering on our strategy

Engagement methods

  • One-on-one, in-person and virtual engagements
  • Dialogue platformss
  • Quarterly reports

Stakeholder expectations and issues

  • Regulators would appreciate improved communication about Exxaro's plans and strategies in addition to receiving submissions regarding licences/authorisations
 Our response  How we create value
  • Reporting quarterly as required by regulatory bodies
  • Ensuring robust internal auditing processes, strategies and management controls to improve compliance and risk mitigation
  • Regularly reviewing and addressing complaints received
  • Processing information requests through the Promotion of Access to Information Act, 2002 (Act 2 of 2002) and managing them accordingly
  • Proactively engaging with the DWS and DFFE on water issues at our Durnacol and Hlobane mines in closure
  • Engaging with the DMRE on the renewal of our Matla mining right, the DWS and the DMRE on discard dumps, and the DWS and Water Tribunal on the Matla WUL renewal
  • Ongoing compliance with regulations
 Employees  Our good relationship with this stakeholder has room for improvement

Detailed disclosure:

Empowering our people, remuneration report

Understanding our employees' needs and expectations is linked to our success.

Engagement purpose

  • Regularly communicate organisational progress against goals
  • Conduct workshops with employees to co-create solutions to workplace challenges
  • Implement team development programmes to align employees' focus, profile and development efforts with our strategy and culture
  • Empower employees to manage change and promote resilient business performance through information sharing and capabilities training
  • Identify opportunities to enhance capabilities through education, awareness and skills development as we transform and transition our business
  • Strengthen our culture, trust and relationships while improving employee engagement and morale
  • Allow employees to be heard and receive feedback on important matters through the CEO's regular employee engagements

Engagement methods

  • Daily, weekly, monthly and quarterly meetings
  • Quarterly group-wide (digital and print) and BU newsletters
  • CEO roadshows
  • Quarterly family meetings
  • Quarterly BU management roadshows
  • Regular communication campaigns on safety, anti-fraud and corruption, DEI and Social Impact strategies through emails, digital screens, SMS and the LetsConnect mobile platform
  • Training initiatives
  • Performance management and KPI setting, with annual performance reviews
  • Caucus system (weekly departmental meetings)
  • Safety engagements through toolbox talks, visible felt leadership (VFL), group-wide critical season, and safety summit
  • Biannual CEO feedback on annual and interim financial results, union meetings and employee feedback sessions
  • Honesty boxes, and fraud and ethics hotline
  • Periodic employee engagement surveys
  • Team journeys to develop a high-performance culture as part of culture transformation

Stakeholder expectations and issues

During CEO roadshow meetings at BUs and family meetings at head office, employees raised several issues and expectations, including:

  • Whether they would return to a full-time in-office working environment, or if the hybrid work environment would remain (after COVID-19)
  • The need for increased mental wellness support and a review of the current offering
  • A review of incentive schemes, particularly the line of sight (LOS) scheme at the BUs, which are based on production
  • Effective engagement from management about employee concerns
  • Additional opportunities for career growth and quality of development initiatives
  • Equitable and fair treatment
  • The introduction of bursaries for employees
  • The introduction of a structured platform for, and recognition of, men's issues
  • The need for payouts linked to a traditional employee share ownership plan (ESOP) in addition to receiving dividends from the GreenShare ESOP
 Our response  How we create value
  • Improving communication by:
    • Conducting workshops to foster trust
    • Encouraging reciprocal dialogue and employee buy-in for decisions
  • Championing DEI by:
    • Implementing an anti-racial charter
    • Establishing forums to engage on challenges facing people with disabilities
    • Supporting women in business through women in leadership initiatives, women in mining and gender empowerment programmes
    • Conducting awareness sessions on gender-based violence (GBV) and Lesbian, Gay, Bisexual, Transgender, Queer, Intersex, Asexual and other sexual orientations and gender identities (LGBTQIA+) issues
    • Engaging on men's issues by establishing a men's forum to promote men's health and wellbeing
    • Expediting DEI capability building workshops to promote an inclusive and diverse culture
  • Investing in and developing talent through:
    • Fair promotion processes and effective reward systems
    • Skills development, including mentorship and longer-term support
    • High-quality, equitable and fair development initiatives, including bursaries
    • Youth development programmes and job opportunities
    • Ongoing engagement around group incentive (GIS) and LOS incentive schemes
    • Succession planning and mentorship training
  • Across the business, we are:
    • Addressing social issues, including the environment, community, employment and diversity
    • Maintaining high health and safety standards and conducting awareness initiatives
    • Implementing the head office organisational effectiveness project
    • Reinforcing the code of conduct during CEO roadshows and employee meetings
    • Communicating divestment and investment decisions
    • Monitoring action plans to close 2023 survey issues
  • We paid R5.1 billion in employee salaries, wages and benefits
  • Each GreenShare beneficiary received a cash dividend of R10 653.40
  • Our LTIFR improved to 0.06 against our target of 0.05
  • We invested R402 million to develop our people through comprehensive training programmes, leadership development initiatives and opportunities for continuous learning
  • Women account for 32.79% of the workforce, way above the industry standard
 Labour unions  We have a very strong relationship with this stakeholder based on mutual trust and respect

Detailed disclosure:

Maintaining sound employee relations

Our collaborative relationship with labour unions is critical to ensuring successful employee relations. Exxaro has a pluralist approach to union recognition, formally engaging with unions where recognition agreements were concluded, therefore maintaining their collective bargaining rights. These unions include elected officials of recognised labour organisations at BU, provincial or regional levels. Our employees are members of the National Union of Mineworkers (NUM), National Union of Metalworkers of South Africa (NUMSA), Association of Mineworkers and Construction Union (AMCU) and Food and Allied Workers Union (FAWU).

Engagement purpose

Through engagements, relationship building and collaboration with labour unions, we aim to better understand their objectives to ensure fair labour practices, minimise labour unrest risks and maintain workplace harmony. This enables us to proactively resolve issues or concerns and keep engagements productive.

Engagement methods

  • Ongoing monthly engagements at BUs and quarterly engagements at employer level (Exxaro Coal and Exxaro Coal Mpumalanga) and with Exxaro Resources Limited
  • Management engagement on interim and annual results

Stakeholder expectations and issues

  • Enduring union concerns include employee wages and benefits, health and safety, DEI issues, learning and development, reskilling the workforce and post-mine closure business development
  • In 2024, dissatisfaction was raised, particularly at Grootegeluk, regarding the LOS STI scheme
  • AMCU attained collective bargaining rights and participated in wage negotiations for its members at Grootegeluk
 Our response  How we create value
  • Communicating our business or financial performance, social impact, DEI and transformation initiatives as updates become available
  • Engaging on the impact of Transnet's performance challenges
  • Considering a fair process for thresholds when unions seek recognition
  • Managing potential union rivalry through capability building and engagement, with AMCU reaching the recognition threshold at Grootegeluk
  • Proceeding with wage negotiations to conclude a multi-year agreement to achieve operational sustainability
  • Our well-established and functional union engagement structures enable us to manage communication and resolve
  • We encourage union input on business growth strategies
  • We provide training and development for all stakeholders, with a focus on relationship building
  • Our regulatory compliance ensures unions can negotiate fairly and equitably with Exxaro on behalf of their members
  • We conducted effective wage negotiations without incident
 Communities  Our established relationship with this stakeholder can be improved

Detailed disclosure:

 Building sustainable communities

Our Social Impact strategy supports sustainable growth by focusing on the strategic pillars of education, SMME development and land use management – fostering sustainable livelihoods of the communities where we operate. Our proactive and intentional engagements empower communities to co-create impactful solutions that lead to shared value.

Engagement purpose

  • Create and maintain trusting relationships with stakeholders
  • Share Exxaro's strategy and purpose
  • Respond to community needs
  • Uphold an engaged community, with open communication and opportunities to
    co-create solutions
  • Collaborate and partner to optimise resources and drive greater impact
  • Mitigate or manage operational stoppages and community unrest
  • Bridge the gap between Exxaro's strategic intent and community needs
  • Maintain our social licence to operate

Engagement methods

  • Primarily in-person engagements, with virtual meetings held when possible

Stakeholder expectations and issues

  • A lack of skills, limited access to procurement and employment opportunities, and infrastructure development are ongoing issues among community stakeholders
  • For Exxaro, key issues include the youth not meeting basic recruitment requirements, which hinders access to employment opportunities and causes under-representation at forums
  • The quality of relationships is largely determined by current affairs and changes according to stakeholder expectations
  • We anticipated disruptions leading up to the national elections, as we operate in areas with unreliable service delivery, and committed to ongoing SLP projects relating to service delivery; however, stability was maintained. We attribute this to strong relationships with local communities
 Our response  How we create value
  • Delivering SLPs, which detail our commitments to skills development programmes and infrastructure development, including the resuscitation of boreholes in Leeuwpan, a sports field in Lephalale, and substation and roads projects in Matla and Belfast
  • Leveraging Exxaro's land resources to create sustainable socio-economic value through concessional land leases and land donations
  • Planning future SLPs in accordance with social impact principles and impact areas, in consultation with communities and government (when developing municipal integrated development plans)
  • Developing intellectual capital through localised, in-sourced project management – supporting improvements in SLP delivery
  • Providing and allocating funding to community development initiatives, socio-economic development, local enterprise and supplier development (ESD) projects, charitable organisations and youth upskilling through Exxaro's social investment structures
  • Exxaro spent R161.79 million on socio-economic development (SLPs and CSI), benefiting more than 71 000 people and creating 51 jobs
  • Exxaro invested R85.9 million in community education to benefit 27 000 learners
    • CENNERGI
    • Cennergi spent R27.9 million on socio-economic development initiatives, reaching 2 703 people and creating 168 jobs
    • Cennergi invested R11.6 million in community education to benefit 6 712 learners
 Investors  Our good relationship with this stakeholder has room for improvement

Detailed disclosure:

Chairman's statement, our strategy

Benchmarking our performance, remuneration report

Our investor community includes existing and potential shareholders, investment analysts and other financial capital providers with current and future interest in Exxaro's operational, financial and ESG performance. We also include ESG ratings agencies in the investor stakeholder group.

Engagement purpose

  • Keep investors informed and updated on our strategy, operational, financial and ESG performance
  • Build trust and foster transparency, while maintaining our reputation through expectation management
  • Attract new investments and partnerships by communicating how Exxaro creates value through our Sustainable Growth and Impact strategy. Through these engagements, we gain a deeper understanding of non-holding investors' views on Exxaro and their specific investment criteria to gather insights for future partnerships
  • Engage with ESG ratings agencies to clarify our approach, gain valuable feedback and recommendations that inform our efforts to enhance our overall ESG rating performance

Engagement methods

  • Financial results presentations
  • Finance director (FD) pre-close message and calls
  • Investor and governance roadshows
  • Capital Markets Day and site visits
  • Investor, industry and climate conferences
  • Solicited meetings
  • AGMs
  • Sell-side roundtables
  • Investor perception surveys

Stakeholder expectations and issues

  • Exxaro's growth and diversification aspirations remain a focus, with investors seeking clarity on value creation, execution, timelines and targeted growth areas
  • The manner in which Exxaro is managing risks associated with logistics (Transnet Freight Rail) and offtake (Eskom) is of interest, as is Exxaro's capital allocation framework, shareholder returns, cash retention policy and diversification strategy
  • Other ongoing areas of interest include environmental, social, sustainability and governance matters regarding Exxaro's transition, including the decarbonisation journey and carbon emission reduction efforts
  • Exxaro's succession planning was also a focus in 2024

    Exxaro's remuneration approach for the board, senior management and our broader employee base, especially rewarding for performance, was again commended in 2024. Read the remuneration report for details regarding shareholder engagement and non-binding advisory votes

  • Exxaro's succession planning was also a focus in 2024
 Our response  How we create value
  • Communicating Exxaro's disciplined capital allocation framework, which prioritises investment into our operations, promotes shareholder returns and considers our growth ambitions. Supported by a clear dividend policy and defined growth-oriented cash retention levels, Exxaro continues to deliver attractive returns while laying the foundation for future success
  • Keeping shareholders informed about Exxaro's initiatives and collaborative efforts with industry stakeholders and government to address rail logistics challenges
  • Communicating our approach to prioritising and solving material ESG issues and going beyond compliance by creating lasting, far-reaching socio-economic impact
  • Considering investor feedback on our reporting suite and implementing suggestions that enhance the credibility, transparency and robustness
  • Ensuring our investor community understands our growth journey through a clear investment thesis outlining the risks and rewards as we prioritise optimising our business and transitioning into a diversified minerals and energy solutions business
  • Shareholder and analyst engagements
  • We paid R5 744 million in dividends to external shareholders and R1 893 million to BEE Parties (Eyesizwe's external shareholders) (R23.78/share), which included a special dividend of R5.72/share
  • Our FTSE Russell ESG index score remained high at 4/5
  • We established a new coverage relationship
 Customers  Our good relationship with this stakeholder has room for improvement

Detailed disclosure:

Manufactured capital (integrated report)

We have domestic and offshore customers in Europe, Asia and other markets. Eskom remains our largest customer, with 72% of our coal sales (per product tonnes) (2023: 73%).

Engagement purpose

  • Understand customers’ and strategic partners’ requirements and foster mutually beneficial relationships through continuous engagement and information sharing
  • Engagements focus on the environment (including scope 3 emissions mitigation), trends, market sentiment, exploring future relationships and improving operational and financial performance

Engagement methods

  • Outbound marketing
  • Email correspondence
  • Meetings at different levels of customer organisations
  • Marketing and industry conferences

Stakeholder expectations and issues

  • Our customers expect quality, consistent and reliable product supply and responsive service. They also seek improvements in communication and demonstrations of our approach to solving societal issues, improving the lives of our communities, minimising our environmental impact, becoming climate resilient and addressing climate change issues
  • Exxaro's concerns include the vulnerability of customers in several domestic market segments to the economic climate, inflationary pressures, the weakening rand and sluggish economic growth
 Our response  How we create value
  • Increasing engagement with customers about their challenges
  • Facilitating strategic discussions to strengthen relationships in the longer term
  • Risk-based mindset to achieve safe production
  • Reliable and continuous supply of coal to all customers in terms of quantity and quality
 Suppliers  We have a good relationship with this stakeholder, with room for improvement

Detailed disclosure:

 Driving supply chain sustainability

Suppliers are crucial participants in our value chain. We have over 4 000 active registered vendors in the provinces where we operate. We categorise our suppliers as strategic, SMMEs and local.

Engagement purpose

  • Achieve mutually beneficial operational, financial, environmental, social impact and governance goals

Engagement methods

  • Direct, proactive engagement with strategic suppliers, aligned with our supplier relationship management framework
  • Contract reviews
  • Quarterly contractor forum engagement platform at our BUs
  • Interaction via our vendor services helpdesk

Stakeholder expectations and issues

  • Exxaro aims for security of supply and related performance management, while suppliers look for long-term, sustainable relationships, including contractual amendments, timeous communication of business opportunities and collaboration for shared value
  • There is a high demand for local procurement opportunities and for suppliers to prioritise local communities for employment
  • Suppliers expect a visible and impactful demonstration of good corporate citizenship from Exxaro
 Our response  How we create value
  • Regularly engaging with strategic suppliers (as part of our supplier relationship management programme) to address key issues such as cost savings, diversity and transformation (black ownership and participation), supply security, risk management and decarbonisation strategies
  • Publishing user-friendly guidelines on Exxaro's procurement systems, policies and processes on our websites to assist suppliers
  • Communicating our local procurement strategy, sharing progress at regular BU stakeholder engagement forums and educating suppliers about accessing business and funding opportunities
  • Identifying procurement opportunities for local communities
  • Securing local economic development commitments from our suppliers
  • Setting annual progressive targets (going beyond compliance to regulatory requirements) for preferential, local and green procurement
  • Exxaro benefits from reserved allocations of high-risk and strategic commodities to ensure business continuity
  • Our ESD programme invested R169.8 million in enterprise development, creating/maintaining 286 jobs and contributing to Exxaro's Mining Charter and dtic scorecard performance:
    • R1.08 billion of our procurement spend was directed to local black-owned SMMEs
    • We have achieved level 2 B-BBEE compliance, with preferential procurement scores improving from 26.44 points in 2023 to 27.47 points in 2024

 

Exxaro Resources Limited
Environmental, social and governance report for the year ended 31 December 2024