We uphold our licence to operate through
Our business operations review mine closure and rehabilitation financial provisions every year. Rehabilitation plans and closure objectives are amended after environmental management programme performance assessments. Cost estimates of activities in the concurrent and final closure rehabilitation programme are reviewed and adjusted. External auditors visit our sites, review documents and audit the provisions twice a year.
In 2020, we appointed consultants to compile reports on financial provisions for mine closure and rehabilitation. Except for ECC and Leeuwpan, our operations were assessed in line with the regulation (GNR 1147) published in December 2015 and amended in September 2018 by the Department of Environment, Forestry and Fisheries to extend the transition period to June 2021.
Assessments of ECC and Leeuwpan, assessed in 2019, will be conducted again in 2021. From 2022, all BUs will be assessed annually.
Each BU has five-year conceptual concurrent rehabilitation plans, schedules and associated budgets to:
The annual environmental liabilities update is illustrated below.
|Land disturbed (ha)||Land rehabilitated (ha)|
|Land disturbed versus land rehabilitated1||2020||2019||2018||2020||2019||2018|
|Leeuwpan||1 294||1 202||3 739||56||56||47|
|Matla||1 163||1 073||1 073||356||356||356|
|Grootegeluk||3 677||3 677||3 544|
|Hlobane||1 220||1 220||1 220||1 105||1 105||1 105|
|Total||9 889||10 325||12 502||1 981||2 222||2 169|
Disturbed area is the footprint of disturbed area and includes all buildings, roads and mining areas that need to be rehabilitated according to the Environmental Management Programme (EMPR). Rehabilitated area is the area rehabilitated up to the required standard of the EMPR and the final Land Use Plan, at which point only maintenance and monitoring is needed.
We are committed to rehabilitation beyond compliance. We believe it is our moral responsibility to conduct concurrent rehabilitation in a changing regulatory, economic and operating landscape.
At 31 December 2020, total land disturbed was 9 889ha and total rehabilitated 1 981ha. Exxaro's Environmental Rehabilitation Fund (EERF) and additional bank guarantees provide for new developments and cover shortfalls in financial provisions.
The EERF's assets are managed in terms of asset and liability modelling aligned with risk, return and liability on each site. The objective is to maximise investment growth in the cost of liability provisions. An external specialist supports EERF trustees with technical skills required to profile and identify suitable structures for assessment by the trustees.
Current implementation includes:
Quarterly contributions to the trust are based on closure cost estimates at LoM without considering any guarantees in place.
The trust funds earned R249 million in 2020, including cash contributions, interest on investments and fair value adjustments. The fund has grown by 12.1% from an opening balance of R2 052 million in January 2020 to R2 301 million in December 2020. In addition, Exxaro had bank guarantees of R4 242 million in place at year end. Updating these provisions twice a year highlights potential rehabilitation alternatives that could decrease the long-term closure liabilities of operations.
Calculation of rehabilitation cost is governed by relevant legislation (GNR 1147). It is conducted by independent technical and financial specialists, and our internal sustainability and finance departments, with expertise and experience in environmental management.
In 2020, our total closure costs were R9 536 million.
|Operations in annual financial statements at 31 December 2020||DMRE
shortfall to be
|Grootegeluk (including reductants area)||Limpopo||3 713||321||594||1 226||2 214||37|
|Leeuwpan mining rights 157 and 171||Mpumalanga||655||79||162||277||296||8|
|Matla Eskom-tied mine:||642||294||89||972||(125)||18|
|TOTAL OPERATIONAL MINES||6 017||877||1 581||3 154||2 158|
|Coal mines in closure||438||206||300||52||291|
|COAL TOTAL||7 097||1 376||1 970||4 206||2 296|
|Headquarters: Inactive sites||37||10||34||1||13|
|Cennergi: Amakhala||Western Cape||52||52||26|
|Cennergi: Tsitsikamma||Eastern Cape||31||31||26|
|EXXARO TOTAL||7 221||1 386||2 004||4 242||2 362|
Five Exxaro operations were in active closure in 2020: Tshikondeni, Durnacol, Hlobane, Strathrae and Gravelotte.
We understand that operational closure, concurrent rehabilitation and land management activities directly connect employees, communities, the environment, government and infrastructure.
Our land management goals for 2020 included transferring 90% of post-mining land to emerging farmers in local communities by 2026. We continued to create strategic partnerships with farmers to advance agri-economies in support of government's land redistribution policies.
Operational closure, concurrent rehabilitation and land management are part of Exxaro's operating philosophy and moral responsibility. We actively plan our operations with closure in mind, ensuring adequate financial resources are available to meet our rehabilitation commitments.
We also strive to integrate land and liability management in day-to-day mine planning. We thus minimise final closure costs for each operation and optimise final land use after closure. All operations report concurrent rehabilitation KPIs every month on Exxaro's Middle Eye platform.
The diagram below shows the 11 aspects that must be taken into account when closing a mine.
The social aspects of mine closure are among our engineering and associated financial planning considerations:
Cennergi reviews their financial provisions for facility closure and rehabilitation every year, and consider amendments to rehabilitation plans and closure objectives based on periodic environmental management programme performance assessments. The cost estimates of activities in the concurrent and final closure rehabilitation programme are reviewed and adjusted where necessary.