Exxaro's share price surges as it declares dividend and acquires manganese assets

Exxaro Resources’ share price shot up over 10% on Thursday after the mining and renewable energy group declared its 45th consecutive dividend of R8.43 per share for the six months to June 30 and following the acquisition of manganese assets for up to R14 billion.

Headline earnings a share were up by 13% to R17.24. Revenue increased 8% to R20.6bn. Net cash of R12.4bn increased by 27% year-on-year, while earnings before interest, tax, depreciation, and amortisation was up 10% to R5.6bn. The dividend was 6% up on the same period a year before. The share price traded at R182.07 Thursday afternoon, up from R166.10 a year ago.

On May 3, 2025, Exxaro announced two separate agreements to acquire manganese assets from Ntsimbintle Holdings and OMH (Mauritius) Corporation. The price was estimated to be between R9bn and R14.64bn. Regulatory approvals and other conditions remain in progress, with completion targeted for early 2026.

Production for the group, with interests in coal, energy, and ferrous markets, was up 1%, and export sales increased by 3%. Wind energy generation was in line with seasonality at 337 GWh compared to 339 GWh in the first half of 2024.

Coal and iron ore prices had trended lower from the second half of 2024. Lower seaborne thermal coal prices were due to higher European stockpiles and weather patterns. Australian coal prices fell to a four-year low at $90/t. Volatile and weaker iron ore prices were driven by low Chinese construction activity.

Lower coal sales at Grootegeluk were due to lower power station’ offtake and Leeuwpan product mix optimisation. Belfast coal sales were enabled by improved production, while Mafube improved efficiency delivered on market demand. Increased exports at Grootegeluk occurred despite rainfall and rail wash-away.

The export sales mix optimisation was impacted by rain and logistics challenges - the Richards Bay Coal Terminal remained the most optimal value route.

CEO Ben Magara, who has been in his post for four months, said he had visited all the operations and engaged with employees, organised labour, government, industry bodies, partners, local and international customers, and shareholders.

“I am confident that, together, we are accelerating the delivery of Exxaro’s strategy and stakeholder expectations.. This great mining industry has shaped my leadership approach, with safety as the foundation, strong relationships at the core, and a focus on delivering exceptional performance through operational efficiency and capital discipline,” he said.

He said the group’s Sustainable Growth and Impact Strategy remains intact and aims to transform Exxaro into a diversified natural resources group.

“Our coal portfolio remains well-capitalised, and we have invested significantly in building high-quality infrastructure, with enhanced safety, efficiency, and reliability. These investments are anchored on Exxaro’s substantial coal resources to sustain long life-of-mine profiles, providing a solid foundation to create value well into the future.”

He said coal demand was forecasted to remain resilient even beyond 2050. The energy solutions business, Cennergi, was being “prudently scaled up.” The commissioning of the Lephalale Solar Project (LSP) had been delayed, and the first electrons were expected in the first half of 2026.

The Karreebosch project saw financial close on February 17, and this project would add 140 MW capacity to Cennergi’s 297 MW, accelerating clean energy delivery solutions to customers, Exxaro’s scope 3 emissions decarbonisation plan, and which would contribute meaningfully to South Africa’s just energy transition. The project was expected to generate electrons in 2027.

As a result of the manganese acquisition, the previously maintained cash retention buffer of R12bn to R15bn would not be needed, he said. “I am pleased with our invigorated pace in delivering our diversification strategy,” he said.

Leeuwpan, the thermal coal mine impacted by market and operational challenges, formally initiated a Section 189 consultation process in June. “We are pursuing a turnaround plan that prioritises long-term employment, contributes to local development, and ensures the well-being of our employees and surrounding communities,” he said.

“Exxaro delivered a robust performance, underpinned by operational and marketing efficiency, despite a challenging macro-economic environment, offtake, and ongoing logistics constraints,” he said.

BUSINESS REPORT