Exxaro CEO Ben Magara says the company’s next growth phase is anchored in a diversified portfolio that combines a strong coal base with expansion into manganese, renewable energy and selective exploration projects.
“The new growth phase is about us having become a significant producer of manganese. The mine we have brought in is the fourth-largest manganese mine in the world, with a resource in excess of 180- to 190-million tonnes. Our growth is driven by our appetite for energy minerals, including manganese,” Magara said.
The acquisition is linked to the Tshipi Borwa mine in the Northern Cape. Manganese is a critical input in steelmaking and is gaining importance in battery technologies.
While coal remains a major contributor to Exxaro’s earnings, Magara said the company is pursuing diversification to balance commodity cycles and capture growth in other resources.
He stressed that coal continues to play a central role in the portfolio: “Even beyond 2050, with all the aggressive movements in climate action and emissions reduction, coal remains a significant contributor to the energy mix because it provides baseload power, both domestically and globally.”
He highlighted Exxaro’s position in the Waterberg, where the company controls 9-billion tonnes of coal and operates Grootegeluk, the world’s largest beneficiation complex.
“We are one of the lowest-cost producers globally, able to withstand low prices and benefit from high prices when they come. With the improved Transnet performance, exports from Grootegeluk could exceed 10-million tonnes over the long term though our guidance for the coming year is 7.3- to 8-million tonnes,” Magara said.
He said the company is pursuing life-extension opportunities across its existing coal mines, identifying deposits beyond present boundaries that can be developed using existing infrastructure.
“Diversified earnings reflect commodity cycles. There will be periods when coal prices are lower and manganese or iron ore prices are higher. Supplying Eskom provides an annuity supporting our earnings. That’s why we have maintained 46 consecutive dividends. The more we diversify the more we can sustain these benefits,” he said.
Magara said selective exploration remains another driver of growth, including potential copper projects. “We can pursue these opportunities using our internal expertise and exploration teams, moving up the value curve without large upfront investments.”
In its financial results, Exxaro declared a final dividend of R10 a share, up 15% from a year earlier, taking total payouts to R18.43 a share, or R6.3bn. This comes as profit for the year to end-December fell 7% to R7.1bn and earnings before interest, tax, depreciation and amortisation (ebitda) eased 2% to R10.2bn.
Revenue rose 3% to R41.8bn, supported by slightly higher coal production and exports. However, a 14% drop in export coal prices to $90 a tonne offset much of that growth.
HEPS rose 8% to R32.47.
On renewable energy, the company has doubled its capacity from 200MW to 500MW. “By the end of 2027, all the projects we have announced are going to take us to 900MW. So that’s also quite a meaningful contribution to our earnings,” Magara said.
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