EXXARO
EXXARO
Mining King
Spreads Its Wings PRODUCTION: Timothy Reeder
For the longest time, Exxaro Resources has been known for responsibly investing in its primary commodity - coal - to fuel the future. Now, it has begun taking steps that will take the company beyond coal and even beyond mining toward renewable energy, water and the food security businesses. www.enterprise-africa.net / 3
INDUSTRY FOCUS: MINING
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The Exxaro vision has remained unwavering throughout the 12 years since the Kumba and Eyesizwe Coal merger brought it into being: to make a positive impact on the world. Until now, this has been solely centred around powering better lives in Africa and beyond by investing with care in commodities that will sustain life on the continent. It has always relied on coal to take care of ensuring fuel for the future, but Exxaro has recognised that diversity is now key. Through growth and innovation, it wants to become an unstoppable source of endless possibilities.
// WE CANNOT GROW AS A COMPANY AND A NATION UNLESS WE EMPOWER ALL SOUTH AFRICANS //
4 / www.enterprise-africa.net
Exxaro has grown to become one of the largest and foremost black-empowered coal and heavy mineral companies in South Africa, and crafted a footprint with business interests around the world in Europe, the USA and Australia. As well as its coal operations, Exxaro’s asset portfolio spans investments in iron ore, pigment manufacturing, residual base metals and, now for the first time, renewable energies. BROADENING HORIZONS Coal will still remain the bedrock of all things Exxaro moving forward, and it continues to invest heavily in its longterm coal-mining business which has a 40-year horizon ahead of it. In the second half of 2017, Exxaro embarked on an expansion programme of roughly R13-billion in coal in Limpopo and Mpumalanga. However, Exxaro Resources has been in fervent dialogue concerning a future beyond coal, and is in talks for possible acquisitions in
renewable energy, water and the food security businesses. “We have to start thinking beyond just coal,” declared Exxaro CEO Mxolisi Mgojo to Mining Weekly of the company’s expanding focus, “we have to start thinking beyond mining. “We’re looking at capital-light, fast growing areas of high return that can be rapidly developed with others.” Exxaro Executive Head Strategy and Stakeholder Affairs, Mzila Mthenjane gave a stark reminder of the consequences of failing to implement necessary change. “Delivering on a strategy of yesteryear is hardly sufficient for the future success of any company. We have an option to either embrace change or, if I can be dramatic, be annihilated by change.” This comes after Exxaro reported 23% higher operational cash generation, of R6.8-billion, and 17% higher net operating profit to R6.1-billion in 2017. Mgojo said the company was currently in
EXXARO
// WE’RE LOOKING AT CAPITAL-LIGHT, FAST GROWING AREAS OF HIGH RETURN THAT CAN BE RAPIDLY DEVELOPED WITH OTHERS // active negotiations for a potential investment that would present additional future earnings potential. “We’re exploring new business opportunities that will impact positively on people’s lives,” he said. “Including our mainstay core business, being our coal business, we’ve also come to understand some of the big global challenges that are impacting not only ourselves, but the continent and the world at large.” FUTURE-PROOFING Much of what drives Exxaro’s unique forward motion comes from its new Business of Tomorrow (BoT) unit. It is a department dedicated to scouring the globe for innovative and disruptive business opportunities that will help achieve Exxaro’s ambition of becoming an African champion, one that powers both better lives and the possibilities that are waiting to be explored. It is a mindset which has already resulted in the branching into renewable energy and water, and which keeps throwing up opportunities which would otherwise never have been unearthed. Similar seeds are being sown all the time, not least in Exxaro’s sponsoring 67CEOs Foundation’s Global Entrepreneurship Week workshop in a bid to promote entrepreneurship in South Africa by imparting practical advice and information to SMMEs. Mxolisi Mgojo explained that Exxaro chose to sponsor the workshop because of its priority on
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Enterprise Supplier Development. “We cannot grow as a company and a nation unless we empower all South Africans,” he expanded. “It is proven that SMMEs provide the foundation for growing an economy and Exxaro is determined to power South Africa by creating the right environment and conditions to help small and mediumsized conditions survive and thrive.” Continuing the embracing of innovation and talent nurturing, Exxaro also welcomed the launch of the South Africa Scenarios 2030 Indlulamithi project in Johannesburg in June this year, which aims to create a socially-cohesive South Africa by 2030 and create a people-centred state which prioritises the economic and social wellbeing of its citizens. “Exxaro is proud to do its part to reinvigorate our search, as a nation,
for ways to create a society where all people experience a sense of belonging and solidarity,” outlined Mzila Mthenjane. “The continued growth of our coal business will be essential to providing not only essential energy, but also employment opportunities, education and funding to help achieve the 2030 vision,” he finished. “But we also have to look beyond coal, as both the country and the world respond to the challenge of climate change, and doing so is a primary focus of our strategy – one that will enable the transition to a low-carbon future.”
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ENTERPRISE AFRICA
DECEMBER 2018