Integrated report 2020
Exxaro report selector 2020
Exxaro Resources Limited
Integrated report 2020
REPORT SELECTOR
We concluded the decade to 2020 with a new strategy and started the next decade with a firm foundation for our journey towards a just transition. 2020 marked a milestone in the (near) conclusion and achievement of our prior strategic objectives, namely portfolio optimisation, ensuring a sustainable business, delivering operational excellence and product capital optimisation. We describe our performance against these objectives in the next section in the context of the following five material themes:
We have shifted and migrated from our original thinking of growing Exxaro through our Business of Tomorrow initiatives and responding to climate change threats. Instead, our Sustainable Growth and Impact strategy will transform Exxaro in a systematic and integrated manner into a diversified company that will transition from a coal-base to a renewable energy and minerals business that will thrive in a low-carbon future.
Our purpose, to power better lives in Africa and beyond, is fundamental to our business. As our context continues evolving, our purpose informs our strategic plans and where we should focus our efforts.
We have long understood the need to balance the country's socio-economic development, which relies on coal generated power, with the need to support the transition towards a low-carbon economy to reduce carbon emissions and the harmful impacts of climate change. This transition is changing life as we know it today and will impact energy and capital markets, value chains and the overall context for conducting business. These are major changes that will raise future challenges and increase external risks for those who do not adapt, but will present significant opportunities for those who are able to evolve.
We are committed to responsibly balancing these competing needs and delivering on our purpose, both now and into the future, through a thriving diversified business. Hence, our integrated strategic approach addresses the current state of play and positions our business for the future.
Renewable energy is a rapidly growing aspect of the energy mix across all major economies, including South Africa. In South Africa, the Integrated Resource Plan forecasts renewables' contribution to the energy mix to increase from about 10% today to between 45% to 50% in 2030. Our investment in Cennergi is our commitment to this future energy scenario.
Our new Sustainable Growth and Impact strategy has been developed through broad consultation, informed by the latest industry research. Key stakeholders have been engaged throughout the process to ensure we consider their legitimate needs. The strategy has been submitted to the board of directors for input, supported by a clear implementation plan.
In developing our Sustainable Growth and Impact strategy, we have further integrated sustainability, growth and impact because we understand that these elements of our business and operating environment are deeply connected.
Going forward, our business portfolio will shift to more sustainable businesses, with a focus on renewable energy and a continued review of minerals contributing to a low-carbon world. This scope will establish the base for our new multi-core business. This multi-core business will be built on the platform of skills and technology that is driving our coal business.
Our coal business remains critical and strategic in supporting South Africa's economic development in the foreseeable future. Consequently, we have prioritised responsible mining through our early value coal strategy, which is a key pillar of the Sustainable Growth and Impact strategy. Our early value coal strategy optimises our coal reserves, minimises stranded high-value reserves and moves our operations lower on the cost curve. We are also able to meet our long-term CSAs to ensure the energy supply that supports the country's socio-economic development.
Powering better lives in Africa and beyond
Resources powering a clean world
What does this mean?
We see ourselves as a company who will be providing resources (beyond
just commodities) critical to a low-carbon world. We see Exxaro as a
diversified organisation with energy and mineral resources capabilities
critical and relevant in a world of low carbon emissions.
Creating sustainable growth and impact
How will we achieve this vision?
To deliver on our vision, Exxaro will focus on efforts to transition at speed to further diversify our business with a focus on low-carbon minerals and energy businesses by making considered capital allocation decisions and divesting of assets that do not support our strategic aspirations.
To successfully operate in these growth areas, we understand that we need our people to thrive – this means creating an enabling work environment through effective operating models, enabling policies and ways of work. These will be built from the strong base that is the Exxaro culture and embodied values. Exxaro's strategic focus on diversity and inclusion is designed to address the country's legacy of exclusion by leveraging the power of diversity to create the requisite vibrancy and cultural representation needed to support our focus on innovation.
We aspire to grow our ability to catalyse economic growth by providing access to clean energy in our acquisitions and by building and enabling SMMEs.
Our roadmap to sustainable growth and impact
To create Sustainable Growth and Impact, we will focus on the following five objectives:
We will further evolve into a recognisable diversified minerals and energy business at a pace that will enable us to capture significant growth opportunities while ensuring a just transition.
We will enhance focus on our core delivery areas: minerals and energy by using a prudent portfolio management and capital allocation approach as well as operational excellence using innovation and technology.
Our people are equipped with the capabilities, mindset and passion to achieve our purpose.
Impact is intrinsic to our business investments and activities. We achieve diversity and inclusion, socio-economic impact as well as environmental stewardship in the delivery of our strategy.
Actively manage our scope 1 and scope 2 carbon emissions and reduce the volume of potable water consumed in our operations to achieve carbon-neutrality by 2050.
