The annual estimation and reporting process is managed through the Exxaro geosciences policy and associated Coal Resource and Coal Reserve reporting and LoM procedures. The documents dictate technical requirements for estimation and reporting, and include guidelines on methodologies, templates and assurance.

The policy and procedures are aligned with the guidelines of the SAMREC Code and, for South African coal reporting, SANS 10320:2004. Processes and calculations associated with the estimation process have been audited by internal competent persons and external consultants when deemed applicable. For mines or projects in which Exxaro does not hold the controlling interest, figures have been compiled by competent persons from the applicable companies and are not audited by Exxaro.

Coal Resource estimations are based on the latest available geological models, which incorporate all new validated geological information and, if applicable, revised seam, Resource definitions and Resource classifications. For Exxaro operations and projects, we use a systematic review process that measures the level of maturity of exploration work done, extent of geological potential, mineability, licence-to-operate considerations and associated geological risks/opportunities to establish eventual extraction. We have enhanced our methodology to ensure that all factors for reasonable and realistic prospects for eventual and economic extraction, as outlined in Table 1 (4.3) of the SAMREC Code, have been reasonably considered.

For Exxaro's Coal Resources, the location, quantity, quality and continuity of geology are known to varying degrees of confidence and continuously tested through exploration activities such as geophysical surveys, drilling and bulk sampling. Coal Resources are classified into Inferred, Indicated or Measured categories, based on the degree of geological confidence. Distribution of points of observation (drilling positions and trenches, among others), quality assurance and quality control in sample collection and evaluation of structural complexities are considered in classifying Resources. An annually compiled exploration strategy outlines activity planned to investigate areas of low confidence and/or geological or structural complexities to ensure Resources of a high level of geological confidence are considered for mine planning.

Coal Reserves are estimated using relevant modifying factors at the time of reporting (mining, metallurgical, processing, infrastructure, economic, marketing, legal, environmental, social and governance requirements). Modifying factors are reviewed before and after Reserve estimation by the persons responsible for ensuring all factors are timeously and appropriately considered. Signed-off Reserve fact packs that record losses, recoveries/yields, cost, commodity prices, exchange rates and other required factors applied, are documented in each LoM plan and independent competent person's report.

Exxaro aims to create maximum stakeholder value through its LoM planning. In the drive for early value, the highest margin and net value product, as well as the highest value mining sequence were re-examined to ensure that all exploitation strategies are optimally suited for current mining practices and market conditions. This was done while ensuring that medium and long-term objectives were not compromised. Strategic marketing objectives were overlain on this analysis to produce plans that minimise market risk and are robust under expected fluctuations in the underlying economic factors.

Reported Coal Reserves are derived from Indicated and Measured Coal Resources, although limited Inferred Resources may be included in the LoM plan at the discretion of the competent person but not converted to Coal Reserves. These inclusions are scrutinised, tested, documented and their impacts are known and quantified.

Environmental management, including applicable authorisations that support our estimates, closure plans, allocated funding and associated risks are discussed in detail in Exxaro's ESG report available online under the investors tab.