Integrated report 2020
Exxaro report selector 2020
Exxaro Resources Limited
Integrated report 2020
REPORT SELECTOR
While the operating context remained challenging in 2020, Exxaro strived to leverage the opportunities presented by the new normal and ensure our focus remained steadfast — delivering on our purpose to create and preserve value for our stakeholders, through the responsible use of our capitals.
Please refer to Our business model for more information about how we differentiate ourselves through delivering on our
purpose. Our response to
COVID-19 is here.
Our value distribution (as shown below) reflects our contribution to our stakeholders, with the impacts on the capitals we rely on reflected below.
(2019: R80 million)
GreenShare employee scheme (previously phantom employee scheme)
R51 million
(2019: R95 million)
Community investments and volunteerismR143 million
(2019: R1 391 million)
Dividend paid to external shareholders of EyesizweR978 million
(2019: R1 315 million)
Employees’ taxR1 223 million
(2019: R558 million)
Cost of financeR1 305 million
(2019: R1 690 million)
Payments to government: taxation contributionR1 947 million
(2019: R4 209 million)
Salaries, wages and benefitsR3 795 million
(2019: R5 812 million)
Cash dividend paidR3 034 million
 |
Improvement in performance/ value created |
 |
Unchanged performance/ value preserved |
 |
Deterioration in performance/ value preserved |
| Natural capital |  |
Trend | Target | 2020 | 2019 | |||||
| Reportable environmental incidents (levels 2 and 3) | |
0 level 3s 6 level 2s |
0 | 0 | ||||||
| Carbon intensity (scope 1) (kt CO2e) | |
Actual for previous year less 5% |
5.5% improvement |
7% improvement |
||||||
| Carbon intensity (scope 2) (kt CO2e) | |
Actual for previous year less 5% |
13.7 | 2% improvement |
||||||
| Water intensity (kL/run of mine) | |
0.20 | 0.182 | 0.11 | ||||||
| Rehabilitation funding adequacy of commercial mines, including guarantees (%) | |
80% to 100% | 69 | 68 | ||||||
| Human and intellectual capital |  |
|||||||||
| Fatalities (as of 2 March 2021) | |
0 | 0 | 0 | ||||||
| Lost-time injury frequency rate (LTIFR) | |
0.11 | 0.05 | 0.12 | ||||||
| Occupational health incident frequency rate (OHIFR) | |
0.31 | 0.19 | 0.24 | ||||||
| Skills provision (% of appointment from within)* | |
60 | 88.44 | 47.90 | ||||||
| Social and relationship capital |  |
|||||||||
| B-BBEE contribution level | |
1 | 2 | 2 | ||||||
| Black ownership (%) | |
30.1 | 38.22 | 30 | ||||||
| Social and labour plans (SLPs) project delivery (time variance) (%) | |
0 | (11) | (11) | ||||||
| SLPs project delivery (cost variance) (%) | |
0 | (59) | (58) | ||||||
| Manufactured capital |  |
|||||||||
| Capital project delivery measure (time variance) (%) | |
0 | 11.1 | 5 | ||||||
| Capital project delivery measure (cost variance) (%) | |
0 | 6.3 | 3.1 | ||||||
| Financial capital |  |
|||||||||
| Core operating margin (%) | |
20 | 17 | 15.24 | ||||||
| Annualised return on capital employed (ROCE) (%) | |
>20 | 27 | 27.51 | ||||||
| Net debt to core EBITDA2 (times) | |
<1.5 | 1.0 | 0.6 | ||||||
| 1 | HEPS is headline earnings per share. |
| 2 | Earnings before interest, tax, depreciation and amortisation (EBITDA) is net operating profit before interest, tax, depreciation, amortisation, impairment charges/reversals and net loss or gain on the disposal of assets and investments (including translation differences recycled to profit or loss). |
| * | 2019 figures cannot be compared to 2020 due to a change in the definition. |
Refer to strategic dashboard in the ESG report for more information.
Exxaro monitored and responded to the unfolding pandemic from the first report of the disease by the World Health Organization in 2019. Guided by leading global and local authorities, we continued protecting our people’s health and safety throughout the pandemic.
| Total employees screened | 35 293 | |
| Total tests | 11 621 | |
| Total confirmed cases | 2 780 | |
| Active cases | 14 | |
| Recoveries | 2 754 | |
| Lives lost : | 12 |
| BUs | Confirmed cases | Active cases | Recoveries | Lives lost | ||||||||
| Belfast | 99 | 0 | 99 | 0 | ||||||||
| Leeuwpan | 265 | 0 | 265 | 0 | ||||||||
| Matla | 842 | 5 | 834 | 3 | ||||||||
| Grootegeluk | 1 095 | 4 | 1 088 | 3 | ||||||||
| Tshikondeni | 2 | 0 | 2 | 0 | ||||||||
| ECC | 205 | 0 | 201 | 4 | ||||||||
| The conneXXion | 55 | 1 | 53 | 1 | ||||||||
| FerroAlloys | 22 | 0 | 22 | 0 | ||||||||
| Durnacol | 5 | 0 | 5 | 0 | ||||||||
| Hlobane | 0 | 0 | 0 | 0 | ||||||||
| Cennergi | 15 | 0 | 15 | 0 | ||||||||
| MaFube | 175 | 4 | 170 | 1 | ||||||||
| Total | 2 780 | 14 | 2 754 | 12 |
As the festive season approached, the second wave gained momentum. Considering the increase in safety incidents during this season, compounded by panic about the negative impact of COVID-19, Exxaro launched the Keep On communication campaign to convey messages of compliance, encouragement and caution. Hygiene kits (face masks, sanitiser, multivitamins and awareness material) were given to employees to share with family and friends.
The campaign encourages employees and our host communities to keep wearing masks, maintain social distance, wash hands and look out for COVID-19-related symptoms. If anyone shows symptoms, they are informed of easy, safe and free COVID-19 testing at one of our stations. Daily reminders are sent to employees via the LetsConnect app.
When the South African government declared a state of national disaster, we implemented crisis management and business continuity plans including health and safety controls. The rise in local cases activated the next phase of risk management — focusing on three objectives:
DELAY INFECTION WHERE POSSIBLE
MANAGE RISKS ASSOCIATED WITH INFECTED CASES AS THEY ARISE
Regrettably, we have lost 12 colleagues to COVID-19 complications as of 1 March 2021. Our sincerest condolences go to their families, friends and teams.
In September 2020 when cases declined, and anticipating the second wave seen in parts of the northern hemisphere, Exxaro introduced new interventions to bolster preventive efforts. These included closer management of employees with comorbidities, driving COVID-19 compliance and our employee assistance programme (EAP), and providing oximeters and a COVID-19 call centre to people in self-isolation. We also decided to continue amended business processes so that restrictions were only eased to allow international travel.
Measures that remain in place include:
As a member of the Minerals Council South Africa, Exxaro collaborates with other mining houses in preparing for the COVID-19 vaccine roll out. We will use our existing healthcare facilities to vaccinate employees and host community members.
Despite COVID-19, Exxaro reported resilient results for the year ended 31 December 2020. We returned a total dividend of 2 429 cents per share to shareholders in 2020.
Our capital allocation framework, given the impact of COVID-19 on the economy, remains prudent in returning cash to shareholders, managing debt and selectively reinvesting for the growth of our business. To manage COVID-19 uncertainty, Exxaro acquired a short-term overdraft facility of R1.75 billion. In total, R1 billion was repaid in July 2020 and R750 million in October 2020. We also activated R2 billion, which is available under our R10 billion facility with a consortium of banks.
COVID-19 accelerated responsible investing momentum and exerted pressure on capital markets to commit to carbon reduction targets. We are confident that attaining our carbon-neutrality target for scope 1 and scope 2 emissions by then, while making our portfolio resilient in a low-carbon world through our energy and minerals strategies ( Our strategy: Positioning Exxaro for sustainable growth and impact), will mitigate the financial impact of our carbon exposure risk.
With the just transition as our pathway, our considered social interventions include sustainable impact strategies that involve, among others, regenerative rehabilitation and repurposing relevant assets, such as our land, to develop new industries beyond coal mining for local communities. COVID-19 impacted the initiation of some planned Impact Catalyst projects ( Combined assurance for effective governance in the ESG report). We experienced a two-month delay in progress due to lockdown but we used this time to refine our approach.
In addition to measures implemented to combat the spread of COVID-19, Exxaro has sufficient liquidity to withstand interruptions and will remain a going concern for the foreseeable future.
CARE AND SAFETY
BUSINESS CONTINUITY
LONG-TERM RESILIENCE
COVID-19 sanitising procedures
| Stakeholders | Short term | Long term | ||||
|
|
|
||||
|
|
|
||||
|
|
|
||||
|
|
|
||||
|
|
|
Refer to stakeholder management on Stakeholder management for detailed information on our stakeholder engagement during this time.
COVID-19 food parcel donation at Leeuwpan mine
