In a process that may lead to job cuts, Exxaro Resources has initiated formal consultations under section 189 of SA’s Labour Relations Act about its Leeuwpan coal mine in Mpumalanga.
The mine, which has about 600 employees, excluding contractors, and produces 3.65-million tonnes per annum of thermal coal, continues to incur losses, prompting the company to review its operations and explore restructuring options.
The company said on Monday the consultation process was expected to conclude within 60 to 90 days.
The company said Leeuwpan, which is over seven years old, will continue to operate as a going concern, with all social and labour plans, social impact projects, and supplier and enterprise development initiatives remaining in place.
“The nature of loss-making at Leeuwpan is not sustainable,” said CEO Ben Magara, who started in the position in March.
“We expect to get all the employees and their representatives to share with us their suggestions for the way forward,” he said.
“It’s too early to say what will come out of it. We intend to minimise any potential job losses while ensuring a viable business,” he said.
Magara said redeployment opportunities exist within Exxaro’s broader coal operations, and the company was committed to supporting affected employees through “reskilling and other measures, where necessary”.
Exxaro Resources expects a fall in coal production and sales volumes for the six months to end-June, amid subdued demand from Eskom and challenging market conditions.
The company said it expected a 4% decline in thermal coal production, primarily due to Eskom’s reduced offtake at the Grootegeluk mine, and a 6% decrease in total coal product volumes compared with a year ago.
Coal sales volumes are expected to decrease by 7%, driven by logistical disruptions, including weather-related damage to rail infrastructure and derailments, which are expected to affect export sales by about 10% in the first quarter.
Domestic thermal coal sales, however, are projected to increase by 23% as some export volumes are redirected to the local market to meet steady domestic demand.
Exxaro’s coal prices are expected to average $91 per tonne in the first half of the year, down from $110 per tonne in the second half of 2024.
The company’s coal capital expenditure is set to decrease by 19%, “aligned with capital replacement plans and the completion of infrastructure projects at Belfast”, the company said.
Exxaro’s net cash position stands at R19.5bn, excluding net debt of R5.8bn in the energy business.
On the operational front, the company said it faced ongoing structural and logistical issues, with Transnet Freight Rail and infrastructure constraints.
However, improvements in rail execution, particularly in the Mpumalanga and Waterberg regions, had been noted in the second quarter of 2025. The Richards Bay Coal Terminal handled 54.45-million tonnes per annum, up from 52-million tonnes per annum the previous year.
Exxaro has acquired manganese assets from Ntsimbintle Holdings and OM Holdings Mauritius in a deal valued between R9bn and R14.64bn. The acquisition gives Exxaro control of Ntsimbintle Mining, buying 74% from Ntsimbintle and 26% from OM Holdings.
This move supports Exxaro’s shift to a diversified minerals and energy-solutions business, helping to reduce its dependence on coal and capitalise on growth opportunities in the manganese sector amid evolving energy markets.
The company will release interim results on August 21.
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