ENVIRONMENT | Environmental liabilities and rehabilitation | Next: Social

Environmental liabilities and rehabilitation

We uphold our licence to operate through

  • Mine closure and ongoing rehabilitation procedures
  • Integrated mine closure plans
  • Financial provision
  • Closure objectives (management plans)
  • Mine closure impact assessments
  • Ongoing rehabilitation, monitoring and reporting
  • Closure and ongoing efficiency reports
  • Land management procedures
  • Operational land management plan
  • Land disposal strategy
  • Land management efficiency reports

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:

  • Set measurable targets
  • Avoid backlogs and related liabilities
  • Enable managers to implement plans without cash flow constraints
  • Include concurrent rehabilitation in operational tracking

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
Arnot 830 830 241 226
Belfast 679 479 145
Dorstfontein East 556 544 551 17 17 17
Dorstfontein West 61 61 61
Forzando North 275 275 275
Forzando South 209 209 209
Leeuwpan 1 294 1 202 3 739 56 56 47
Matla 1 163 1 073 1 073 356 356 356
Strathrae 223 223 223 161 161 161
Grootegeluk 3 677 3 677 3 544
Tshikondeni 198 198 298 139 139 115
Durnacol 334 334 334 147 147 142
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

1 Arnot is excluded in 2020 due to the divestment process to Arnot OpCo Proprietary Limited.

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:

  • Two income building blocks benchmarked to cash rates and investing in government treasury bills, banks and corporate paper
  • Three growth building blocks targeting inflation-linked returns and investment in insurance and bank-guaranteed products
  • Equity-driven portfolios without explicit investment guarantees but portfolio managers controlling capital risk by managing volatility

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
closure  cost 
Trust fund
shortfall to be 
covered over
remaining  LoM 
Grootegeluk (including reductants area) Limpopo  3 713  321  594  1 226  2 214  37 
Thabametsi  Limpopo  156  885  (1 040)
Tshikondeni  Limpopo  10  22  197  49  (215)
Belfast  Mpumalanga  484  49  133  400  11 
Dorstfontein East  Mpumalanga  909  41  275  16 
Dorstfontein West  Mpumalanga  51  95  184  239  397  20 
Eerstelingsfontein  Mpumalanga  (3)
Forzando North  Mpumalanga  53  272  101 
Forzando South  Mpumalanga  141  18  94  304  (15)
Inyanda  Mpumalanga 
Leeuwpan mining rights 157 and 171  Mpumalanga  655  79  162  277  296 
Paardeplaats  Mpumalanga  88  (88)
Strathrae  Mpumalanga  29  69  103  (4)
Tumelo  Mpumalanga  14  (6)
Matla Eskom-tied mine:     642  294  89  972  (125) 18 
Durnacol  KwaZulu-Natal  263  14  277 
Hlobane  KwaZulu-Natal  131  93  224 
Newcastle  KwaZulu-Natal 
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 
Gravelotte  Limpopo  35  (35)
Headquarters: Inactive sites  37  10  34  13 
Cennergi: Amakhala  Western Cape  52  52  26 
Cennergi: Tsitsikamma  Eastern Cape  31  31  26 
FerroAlloys  Gauteng 
OTHER TOTAL  124  34  13 
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.

  • Ensuring operational closure is inclusive and within legal framework parameters
  • Proactively managing environmental impacts to minimise residual liabilities
  • Leaving a positive legacy of alternative sustainable land use for employees and local communities
  • Allocating financial resources required to ensure process conclu
  • Managing Exxaro land according to agreed strategy

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.

Integrated stages of mining and mine closure planning

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.

  • Embed rehabilitation and mine closure in our day-to-day management of BUs
  • Focus on rehabilitation standards that ensure sustainable alternative post-mining land use
  • Set clear measurable concurrent and ongoing rehabilitation targets
  • Build accountability into operational management KPIs
  • Reduce or maintain financial environmental liability levels

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.

Social closure principles

The social aspects of mine closure are among our engineering and associated financial planning considerations:

  • Equip employees with portable skills to pursue alternative employment and participation in meaningful economic activity
  • Develop and implement a communication plan for employees
  • Employee training to implement and manage mine closure plans
  • Address health and safety issues as well as employment opportunities for communities
  • Socio-economic activities that must continue after mine closure
  • Identify the needs and expectations of stakeholders and socio-economic impacts
  • Assist host communities to acquire skills for commercial activities and infrastructure use after mine closure
  • Ensure opportunities are available to improve quality of life
  • Align closure with community expectations to honour SLPs commitments
  • Develop and implement plans for engagement with communities, government and NGOs among others
  • Help mine owners and operators achieve liability-free closure within a reasonable timeframe
  • Management committed to implementing the closure plan

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.

Leeuwpan plant