EXXARO RESOURCES: Balancing Coal and Sustainability in SA’s Energy Landscape

In South Africa, a nation still largely powered by coal but firmly committed to sustainable development, the role of Exxaro Resources cannot be overstated. This is a company that walks a delicate tightrope: supplying a fossil fuel essential to both domestic and global economies while investing heavily in technology, renewables, and responsible business practices.

Since its establishment in 2006 through the unbundling of Kumba Resources, Exxaro has grown into one of the largest and most influential black-empowered mining companies in the country. With a strong coal portfolio, an expanding renewable energy division, and a deep-rooted belief in socio-economic development, Exxaro continues to play a pivotal role in the country’s energy security and economic resilience.

Its influence stretches beyond tonnes and turbines. In March 2025, a new era began with the appointment of seasoned mining executive Ben Magara as Chief Executive Officer. His arrival signals continuity in Exxaro’s core values — empowerment, sustainability, and growth — with fresh vigour and experience at the helm.

“Ben Magara brings a wealth of mining leadership, global board, and governance experience to Exxaro along with a reputation for driving operational excellence and providing strategic leadership at multiple large mining operations,” said Chairman Geoffrey Qhena.

Magara added: “I am excited to have the opportunity to utilise our strong coal foundation as a base from which to expand our portfolio towards the critical low-carbon minerals essential for the future. This is in line with our diversification strategy which I have been part of as Exxaro’s Non-Executive Director and Investment Committee chairman. I believe this strategy will enable us to deliver enhanced value to all our stakeholders while balancing enduring profitability with environmental and social sustainability.”

Ben Magara, CEO Exxaro Resources & Dan Marokane, Group Chief Executive, Eskom

MODERNISING COAL

Coal is not going away — not yet. The International Energy Agency (IEA) reports that global coal demand in 2024 is projected to grow by 1%, reaching a record 8.77 billion tonnes. This trend is largely driven by Asia’s rapidly industrialising economies.

“After having grown by more than 1.2 billion tonnes since 2020, global coal demand is set to plateau in the next three years, reaching around 8.87 billion tonnes by 2027,” the IEA states in its Coal 2024 executive summary.

This global context places Exxaro in a strategically important position. It supplies more than 40 million tonnes of coal annually, with a focus on high-quality, low-sulphur thermal coal — particularly sought after by buyers in India and southeast Asia. As global coal demand steadies, and cleaner, more efficient plants come online in developing countries, Exxaro remains a critical supplier. A number of critical mega projects are underway to ensure the company retains its status.

“From initiatives dedicated to incorporating diverse stakeholder perspectives and strengthening our existing human resources to upgrading existing sites to be more modern and efficient, Exxaro’s Mega Projects are geared toward ensuring a more sustainable tomorrow. These investments have several objectives: to grow the coal business, to expand and increase production volumes more sustainably, and to lead the way towards greater sustainability and community development,” the company says.

But the company is doing more than just mining coal. It’s rethinking how coal fits into a lower-carbon economy. Its operations have become increasingly digitised and optimised using data and automation. It is aggressively pursuing environmental compliance, while safety performance has improved year-on-year.

The company’s FY2024 results were a showcase of this balance — strong profitability and exports, zero major environmental incidents, and a safety record reflecting 28 consecutive months without work-related fatalities. For a company with thousands of employees in high-risk environments, this is no small achievement.

“At the heart of everything we do is our people. We prioritise health, safety and the environment,” said Riaan Koppesschar, Acting CEO and Finance Director. “Our commitment to zero harm continues to be reflected in our safety performance.”

DRIVING GREEN GROWTH

Exxaro is also one of the few coal mining companies in the world making substantial investments in renewable energy — and delivering on them. Its energy business, Cennergi, has become a serious player in South Africa’s renewables space. It currently operates two wind farms and is expanding rapidly.

In January 2024, Exxaro and G7 Renewable Energies announced the conclusion of a 20-year Power Purchase Agreement with Northam Platinum. The deal will see the Karreebosch Wind Farm deliver 140MW of clean energy to Northam’s operations — a move that underlines the mining sector’s own shift towards decarbonisation.

“Reaching financial close with our partners G7 and Northam reaffirms Exxaro’s commitment to decarbonisation and diversification as set out in its Sustainable, Growth, and Impact strategy,” said Leon Groenewald, Managing Director of Cennergi.

And this is only the beginning. Exxaro has mapped out a long-term Decarbonisation Roadmap, aiming for carbon neutrality by 2050. The roadmap features energy efficiency measures, renewable investments, and operational changes across its coal and energy operations. The company refers to this process as an “impactful transition” — reflecting the need for South Africa’s energy transition to also be socially and economically just.

In April, Exxaro and Eskom signed an agreement around reducing emissions across all scopes and improving air quality across as part of a wider national goal.

“This collaboration marks a significant step forward in our commitment to enabling a just transition (known as an impactful transition at Exxaro) and building a climate-resilient, and low-carbon future,” said Magara

That collaboration is a Memorandum of Understanding between Exxaro and Eskom to explore initiatives aimed at reducing carbon emissions and improving air quality. The agreement includes a focus on renewable energy, repurposing of old coal infrastructure, and retraining workers to adapt to a changing energy sector.

COMMUNITY AND RESPONSIBILITY

Beyond energy, Exxaro’s impact reaches into the communities around its mines. Education, infrastructure, and local business development are central to its ESG strategy. In 2023 alone, Exxaro spent more than R200 million on community development initiatives — from bursaries and school upgrades to enterprise supplier development programmes.

With a workforce that is over 85% black and more than 20% female, the company is not just empowering in theory — it’s transforming lives. Leadership from the boardroom to the pit continues to be representative of the country’s broader transformation goals.

The newly appointed CEO is expected to build on this momentum. Magara, a Zimbabwe-born South African mining veteran, has long advocated for responsible leadership and inclusive industry practices.

Thankfully, Magara and Exxaro are not blind to national challenges in community and economy. South Africa’s rail bottlenecks have affected export logistics, electricity shortages impact productivity, and global pressure to shift away from coal continues to grow. Yet, the company is positioning itself not as a victim of transition — but as a leader in it.

With thermal coal still forming more than 70% of the country’s electricity mix, companies like Exxaro will remain central to South Africa’s power puzzle for the foreseeable future. What sets Exxaro apart is that it’s not only delivering coal but also helping the country and continent shift towards a more sustainable model — without abandoning the workers and communities that rely on fossil fuel industries.

Coal may be “dirty” by nature, but Exxaro is proving it can be delivered responsibly, while preparing for a cleaner, more inclusive future. In many ways, this is what the just transition really looks like on the ground — complex, pragmatic, and filled with opportunity for those willing to innovate.