As a developing country, South Africa depends on reliable energy to fuel its growth. However, coal has a noticeable impact on environmental systems. As the frequency and scale of climate change-related events continue to grow, so has the imperative to transition to a low-carbon economy.

We support this imperative, but we are also mindful that structural economic transitions take time. Without adequate planning, transitions like these have historically had negative impacts on the most vulnerable in society.

Our purpose is to power better lives in Africa and beyond. To achieve this, we continue carefully considering the critical trade-offs of the economy's immediate and affordable energy needs along with the growing and urgent need to reduce carbon emissions to sustain our environmental systems.

Our Sustainable Growth and Impact strategy is designed to balance these seemingly competitive needs, ensuring we participate in the just transition to a low-carbon economy while delivering on our early value coal strategy in a prudent and responsible manner.

For more information, see Our environment: stewardship and compliance.

Balancing short-term shareholder performance expectations while continuing to invest in future growth can be challenging. Many of our strategic investments are long-term initiatives that require significant time and financial investment. These include our digitalisation and innovation journey, investments in renewable energy and capital expansion projects. Conversely, shareholders have a reasonable expectation to receive returns through dividends and capital appreciation.

We are committed to navigating this challenge through transparency and communication, and ensuring our strategy aligns with shareholder expectations.

Our board-approved dividend policy offers shareholders clarity about dividend expectations and our growth plans. Our revised strategy, and focus on building our renewable energy and minerals businesses, necessitated a review of our dividend policy during the year. The board of directors has approved cover ratios (2.5 times to 3.5 times) to be applied to the Exxaro adjusted group earnings and not only coal earnings. Our current dividend policy, which has been clearly communicated to shareholders, now entails:

• A pass through of the SIOC dividend received
• A dividend based on a cover ratio of 2.5 to 3.5 times Exxaro adjusted group earnings, to include earnings contributions from Cennergi

Furthermore, we continue engaging with stakeholders to help them understand our strategic growth strategy and, in turn, ensure we align with and understand their expectations.

For more information, see Stakeholder management.