Chapter 2: Reports

The board of directors (the board) is pleased to present the group and company annual financial statements of Exxaro Resources Limited for the year ended 31 December 2025 (group and company annual financial statements 2025).

Nature of business

Exxaro is a South African-based diversified resources group with an existing coal and energy business, recently expanding its portfolio through the acquisition of select manganese assets and continuing to pursue acquisitive growth prospects in minerals and energy solutions. Exxaro is evolving into a sustainable and impactful business that promotes economic growth, environmental stewardship and positive change.

Exxaro’s investments in associates include a 20.62% (2024: 20.62%) equity interest in SIOC, which extracts and processes iron ore, a 26% (2024: 26%) equity interest in Black Mountain, which produces zinc, lead, copper and silver in the Northern Cape; a 10.26% (2024: 10.26%) effective equity interest in RBCT, which is an export terminal, as well as a 50% (2024: 50%) joint venture with Thungela in Mafube, which produces coal.

Exxaro is a public company incorporated in South Africa and is listed on the JSE with headquarters in Centurion, South Africa.

Accelerating the delivery of Exxaro’s SG&I strategy

On 27 February 2026, the acquisition of select manganese assets from Ntsimbintle Holdings and OMH was closed, following the 13 May 2025 announcement. Through this transaction, Exxaro acquired 100% of Ntsimbintle Mining (which holds a 50.1% ownership in the Tshipi Borwa mine), 19.99% of Jupiter Mines (which also holds a 49.9% ownership in the Tshipi Borwa mine), 100% of NMT, and 9% of Hotazel.

This acquisition makes Exxaro a globally significant manganese producer underpinned by the acquired interest in the Tshipi Borwa mine, one of the world’s largest manganese producers, delivering approximately 3.5Mt of annual manganese production from the Kalahari Manganese Field. Manganese is a key metal in steel alloys, adding strength and durability in infrastructure development and is gaining traction in clean energy battery chemistries.

Full ownership of NMT strengthens Exxaro’s marketing and trading presence in Singapore and China. Overall, this transaction enhances the diversified, future facing natural resources portfolio and expands Exxaro’s exposure to energy transition metals.

The disposal of the entire shareholding in FerroAlloys on 31 October 2025, represented a key milestone in streamlining the portfolio and sharpening management focus. In the capable hands of FerroAlloys management, employees and Everseed, the board is confident that FerroAlloys will continue to grow and drive positive economic impact in South Africa.

The strength of the coal business is underpinned by the high-quality infrastructure investments made over many years and a substantial resource base of over nine billion tonnes. This supports long LoM profiles, which is evaluated on a continuous basis, and provides a foundation for Exxaro’s organic growth pipeline. Progress on the Leeuwpan turnaround strategy was made, and the Section 189 process has been completed. The turnaround strategy is aimed at returning the operation to profitability, supported by a focused set of actions to stabilise operations and improve logistics performance. In partnership with TFR, the Leeuwpan mine to port logistics has increased, per the agreement signed in the second half of 2025.

The Matla LoM Expansion Project has progressed well and is targeted for completion in the first half of 2026. This R5.2 billion project has been successfully executed by Exxaro, by leveraging its mining and project management capabilities, for Eskom. The project involved the sinking of a new shaft to replace the decommissioned shortwall section. The project is ahead of schedule, delivering early coal production and contributing to the mine’s production increase in 2025. Post completion, the mine will supply between 8Mt to 10Mt of coal per annum to the Matla power station. The renewal of the mine’s Integrated Water Use Licence (IWUL) and Mining Right provide long-term operating certainty and strengthens the value of this investment.

In 2025, Exxaro’s energy solutions business has grown, more than doubling its capacity and expanding the pipeline through strategic acquisitions, including the 140MW Karreebosch wind project, which will supply wheeled energy to Northam Platinum Limited. The project is in construction and is expected to start generating green electrons in the first half of 2027.

In December 2025, the 68MW Lephalale solar plant was commissioned. The plant, a behind-the-meter solution to our Grootegeluk mine, is designed to generate 176GWh of energy per annum under a 25-year power purchase agreement. It is expected to deliver electricity cost savings at Grootegeluk of approximately R100 million per year and reduce our scope 2 emissions by 17%.

A key milestone in the acquisition of majority interests in two fully operational renewable energy assets, the 138MW Gouda windfarm and the 75MW Sishen solar plant, as well as Acciona Energy South Africa O&M Proprietary Limited, has been achieved with the receipt of Competition Tribunal and Reserve Bank approval. Cennergi anticipates fulfilling the remaining conditions precedent, which include the lenders consent and ministerial approval, during the first half of 2026 to complete this acquisition.

Cennergi, in partnership with ENGIE SA, has been selected as a preferred bidder in Bid Window 7 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) for the 240MW Corona solar project in the Free State. Reaching financial close on this project will increase Cennergi’s total gross capacity of assets under construction and in operation to 890MW.

Integrated report and supplementary information

The integrated report and supplementary information contain material information on the activities and performance of the group and its various divisions. These reports are unaudited. The board acknowledges its responsibility to ensure the integrity of the integrated report and supplementary information. We have accordingly applied our minds to the integrated report and believe the report addresses all material issues, and fairly presents the integrated performance, impact and sustainability of the organisation.

Corporate governance

Exxaro’s board is the focal point and custodian of good corporate governance for the group. The board assumes ultimate accountability and responsibility for the group’s performance and affairs. In so doing, it effectively represents and promotes the group’s legitimate interests. As a responsible corporate citizen, Exxaro considers its material stakeholders’ legitimate interests and expectations to ensure it contributes positively to society and the environment.

Exxaro’s corporate governance is underpinned by principles that guide the board in meeting its responsibilities to the company, the group and its stakeholders. These principles enable Exxaro to achieve the King IVTM governance outcomes and fulfil its purpose to power better lives in Africa and beyond through its own ethical and effective leadership.

King IVTM advances good governance through transparent leadership, sound decision making, and a focus on sustainability. Sustainable development is an ethical and economic imperative that balances current economic and social needs with those of future generations. As a responsible corporate citizen, Exxaro integrates stakeholder needs and expectations through our SG&I strategy.

The board sets Exxaro’s short, medium and long-term strategic direction through our SG&I strategy. This enables sustainable value creation through the approval of a capital allocation framework and budget, as well as setting and monitoring performance and culture expectations and a group governance framework.

The board supports King IVTM strategy-setting principles through an iterative process. Before executive management presents the strategy to the board, iterative strategy workshops – which follow a bottom-up process – and board governance sessions ensure input is integrated into the group strategy.

Our integrated medium- to long-term decarbonisation roadmap to achieve carbon neutrality by 2050 was submitted for peer review to ensure its credibility and subsequent implementation.

We continue to use a strategic performance monitoring dashboard to report on the achievement of prioritised KPIs that are aligned to the strategy, in line with our tiered governance approach.

Full details on how these principles have been applied in Exxaro are set out in the 2025 integrated and ESG reports.

ESG governance

In terms of the King IV™ guidance paper on Responsibilities of Governing Bodies in Responding to Climate Change, accountability remains with the board, the responsibility for managing and monitoring risk and impact should be delegated to management with defined indicators and targets to measure and assess performance. ESG governance at its essence encapsulates the policies, practices and procedures adopted by the group to manage and enhance its ESG performance.

Exxaro works to integrate and embed ESG into the organisation, beyond mere compliance, through a tiered governance structure and lens through which to view the SG&I strategy.

More detail on our ESG governance is set out in the 2025 integrated and ESG reports.

Comparability of results

The results for the years ended 31 December 2025 and 2024 were adjusted for the key items as noted in the reconciliation of headline earnings (refer note 5.3).

In line with the changes to the executive leadership team and organisational structures, and in anticipation of the completion of the select manganese assets acquisition, the segmental information has been re-presented, notably, to incorporate a metals reportable segment (refer note 3.3).

The adjustments to the segmental information include:

• FerroAlloys financial results up to the date of disposal (31 October 2025) have been included in the other segment as the group no longer reports a ferrous reportable segment
• A metals reportable segment comprising manganese, iron ore and base metals as operating segments (aligned with the responsibilities of the executive head: metals) was introduced

Accounting policies

The accounting policies applied during the year ended 31 December 2025 are consistent, in all material respects, with those applied in the group and company annual financial statements for the year ended 31 December 2024.

Capital management

Share capital

The share capital of the company is summarised as follows:

1 During 2025, the R1.2 billion share repurchase programme was completed and a total of 7 391 418 shares were repurchased and cancelled, representing 2.1% of Exxaro’s issued share capital prior to the share repurchase (refer note 12.2).

Shareholders

An analysis of shareholders and the respective percentage shareholdings appears in chapter 19: annexure 1.

Investments in subsidiaries

Our investments in subsidiaries are fully disclosed in note 17.6.

Dividend policy and payments

Exxaro remains committed to a disciplined approach in determining dividend payouts. In assessing the appropriate dividend cover, consideration was given to prevailing industry conditions, capital expenditure requirements and other strategic commitments, which is especially prudent given the current economic challenges, including the ongoing impact of logistical constraints, lower commodity prices and a stronger Rand to the US dollar exchange rate.

Furthermore, following the completion of the acquisition of the select manganese assets from Ntsimbintle Holdings and OMH, the group will no longer maintain the previously targeted cash buffer of R12 billion to R15 billion and is reviewing its capital allocation framework. Consequently, the dividend cover ratio range has been revised from 2.5 to 3.5 times Adjusted Group Earnings to a range of 1.5 to 2.5 times Adjusted Group Earnings, while the 100% pass-through of the SIOC dividend remains unchanged.

Exxaro declared the following dividends relating to 2025:

Dividend number 45

Interim dividend number 45 of 843 cents per share was approved by the board on 19 August 2025 and declared in South African rand in respect of the six-month period ended 30 June 2025. The dividend payment date was Monday, 6 October 2025, to shareholders recorded on the register of the company at close of business on Friday, 3 October 2025.

Dividend number 46

Final dividend number 46 of 1 000 cents per share was approved on 17 March 2026 and declared in South African rand in respect of the year ended 31 December 2025. The final dividend payment date is Monday, 11 May 2026 to shareholders recorded on the register of the company at close of business on Friday, 8 May 2026 (record date). To comply with the requirements of Strate, the last date to trade cum dividend is Tuesday, 5 May 2026. The shares will commence trading ex-dividend on Wednesday, 6 May 2026.

The final dividend declared from income reserves, is subject to a dividend withholding tax of 20% for all shareholders who are not exempt from or do not qualify for a reduced rate of dividend withholding tax. The net local dividend payable to shareholders, subject to dividend withholding tax at a rate of 20%, amounts to 800.00000 cents per share.

The number of ordinary shares in issue at the date of this declaration is 341 913 674. Exxaro company’s tax reference number is 9218/098/14/4.

Events after the reporting period

The events after the reporting period are disclosed in note 18.3.

Directorate and shareholdings of directors

At the date of compilation of this report, the following individuals were directors of the company:

Details of the directors in office at the date of this report are set out in the 2025 integrated and ESG reports.

Details of the directors’ shareholdings are contained in note 14.5.3.

Leadership changes

We had the following changes to our leadership:

Independent external auditor

KPMG Inc., with designated audit partner Safeera Loonat, was re-elected as independent external auditor at the AGM held on 15 May 2025 in accordance with section 90 of the Companies Act in respect of the 2025 financial year.

Audit committee

The audit committee report appears in this report , as well as in the 2025 integrated and ESG reports.

Borrowing powers and financial assistance

The borrowing powers were set at 125% of shareholders’ funds (equity attributable to owners of the parent) for both the 2025 and 2024 financial years.

Pursuant to the authorisation granted at the AGM held on 15 May 2025, shareholders approved, in accordance with section 45 of the Companies Act, the granting of financial assistance to related and inter-related companies of Exxaro.

The directors resolved that the company would satisfy the solvency and liquidity test, as contemplated in section 45 of the Companies Act and detailed in section 4 of the Companies Act, post such assistance. The terms under which such assistance will be provided are fair and reasonable to the company.

Employee incentive schemes

Details of the employee incentive schemes are set out in the remuneration committee and remuneration reports in the 2025 integrated and ESG reports and the supplementary information.

Related-party transactions

Details of related-party transactions are set out in note 15.1.

Going concern

The directors believe that the group and company have adequate financial resources to continue in operation for the foreseeable future. Accordingly, the group and company annual financial statements 2025 have been prepared on a going-concern basis.

The directors are not aware of any new material changes, or any material non-compliance with statutory or regulatory requirements that may adversely impact the group or company.

Registration and administration details

The company registration number is 2000/011076/06.

The registered office is The conneXXion, 263B West Avenue, Die Hoewes, Centurion.

Refer chapter 19: annexure 4 for further details.

Lead equity sponsor and debt sponsor

Absa Bank Limited acted as lead equity sponsor and debt sponsor to the company for the financial year ended 31 December 2025.

Joint equity sponsor

Tamela Holdings Proprietary Limited acted as joint equity sponsor to the company for the financial year ended 31 December 2025.

Transfer secretaries

JSE Investor Services Proprietary Limited serves as the South African registrar of the company.

AGM

The 25th (twenty-fifth) AGM of shareholders of Exxaro will be held via electronic communication and in person meeting participation (subject to any adjournment or postponement, health and safety protocols) at The conneXXion, 263B West Avenue, Die Hoewes, Centurion, South Africa, in the Auditorium at 10h00 on Wednesday, 27 May 2026 (2026 AGM) to consider and, if deemed fit, pass with or without modification, the resolutions presented thereat.