Exxaro Resources, one of South Africa’s largest coal producers, is setting its sights on becoming a significant player in the country’s manganese mining industry.
After losing out on a copper mine acquisition in Botswana last year, CEO Nombasa Tsengwa has shifted focus toward manganese as part of Exxaro’s diversification strategy.
South Africa, the world’s leading exporter of mid- to high-grade manganese ores primarily used in steelmaking, offers ample opportunity in this sector.
Although Exxaro currently doesn’t own any manganese mines, Tsengwa stated that the company has expressed interest in acquiring projects in the field.
Key players like South32, Anglo American, and African Rainbow Minerals already hold stakes in manganese mining ventures, especially in the Northern Cape province.
“We believe that the manganese industry needs a South African champion,” Tsengwa said. Exxaro is looking to acquire “a strong asset or two” and also plans to explore new prospects.
The steel industry accounts for 93% of global manganese demand and is expected to remain the primary consumer of the metal.
However, batteries, including those used in electric vehicles, are projected to triple their share of manganese consumption to over 7% by 2040, according to Tanisha Schultz, a senior research analyst at Project Blue, a Cape Town-based firm specializing in critical minerals market intelligence.
Founded in 2006 from coal, zinc, and titanium assets split from Anglo American, Exxaro has already diversified into renewable energy projects, such as wind farms.
The company is also eager to expand into copper mining, foreseeing increased demand driven by electric vehicles, artificial intelligence, and renewable energy.
Exxaro had reached the final stage of bidding for the Khoemacau copper mine in Botswana, but lost out to China’s MMG, which secured the acquisition for $1.9 billion last November.
Despite this, Exxaro remains interested in copper mining, although Tsengwa emphasized the need for partnerships due to high costs.
The company is also exploring copper opportunities in Botswana, the Democratic Republic of Congo, and Zambia.
Exxaro continues to be a top coal supplier to South Africa’s state-owned utility Eskom, having sold nearly 41 million tons last year, with about 13% exported.
The company could potentially export up to 10 million tons annually, but is constrained by the underperformance of state-owned rail and freight operator Transnet, according to Tsengwa.
