Exxaro Resources is betting on its coal mining expertise to become a diversified bulk miner, focusing on the long-term fundamentals of manganese, CEO Ben Magara said.
Speaking at the Joburg Indaba on Thursday, Magara said the company's strategy in acquiring manganese assets is grounded in long-term market fundamentals rather than short-term prices.
“These are well-capitalised mines, I've been there. They’re smart projects, and the long-term fundamentals of manganese are robust,” he said. “Exxaro’s expertise in bulk mining, built in coal, allows us to become the real diversified bulk miner in that space.”
In May, Exxaro announced the acquisition of manganese assets in SA’s Kalahari Manganese field, including a 60.1% stake in the Tshipi Borwa Mine, the country’s largest and the fourth largest globally.
The deal, which also covers Mokala Manganese, Hotazel Manganese Mines, and full marketing rights through Ntsimbintle Marketing and Trading, is valued at about R11.67bn ($637m) and is expected to close in the first quarter of next year.
‘Long-term fundamentals’
Magara acknowledged that the deal could appear costly at current market prices. “At today’s prices, it’s easy to ask whether we overpaid. But we buy with a view to long-term fundamentals, and that’s why we see value in manganese,” he said.
Renewable energy is another focus for Exxaro, which is developing more than 1, 000MW of capacity to supply both its operations and external customers. The company plans to fund about 25% of the projects with equity, with the remainder financed by banks and other investors.
Despite its diversification, coal remains central to Exxaro. Magara said the company was exploring life-extension options to keep its coal mines operational beyond 2050. Exxaro also continues to benefit from its 20% stake in Kumba Iron Ore through its investment in Sishen Iron Ore mine and from its zinc-lead operations at Black Mountain, which generate cash flow to support expansion into new sectors.
“Coal remains a core pillar for Exxaro. It will remain a key part of SA’s energy mix. But we are also preparing for the future — growing renewables, manganese and other transition metals,” Magara said.
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