Exxaro Grows Earnings, Lifts Dividend as Manganese Acquisition Moves Forward
Exxaro Resources reported resilient results for the six months to end-June, posting a 13% increase in headline earnings and raising its interim dividend, as management concentrated on completing the company’s landmark manganese acquisition announced in May.
Newly appointed CEO Ben Magara said finalizing the deal with Ntsimbintle Holdings—owner of a 50.1% stake in the 3.4Mt/year Tshipi Borwa mine—remained his top priority.
The transaction will cost between R11.7 billion and R14.7 billion in cash, depending on whether related parties exercise tag-along and pre-emptive rights.
A key benefit for shareholders, Magara added, is that Exxaro does not plan to rebuild its sizeable cash reserves—R12.4bn net cash as of June—once the manganese acquisition is completed. This suggests the group could increase future dividend payouts.
CFO Riaan Koppeschaar told a media briefing that management was awaiting confirmation of the final purchase price before reviewing its capital allocation framework.
“That will also include reviewing our dividend policy to assess whether there is scope to increase shareholder returns,” he said.
Magara confirmed that steps toward completing the acquisition were “well advanced” and that the deal was on track to close in the first quarter of 2026.
Ntsimbintle shareholders have already approved the transaction, while Exxaro has lodged submissions with both the South African Competition Authority and the Mineral and Petroleum Resources Ministry for approval.
Asked if the manganese deal marked the end of Exxaro’s diversification strategy, Magara responded: “We are still looking for opportunities, but we don’t think we need to do anything as big as manganese.
Our focus is on reviewing capital allocation and enhancing shareholder returns—we don’t expect to rebuild the same cash buffer.”
Group coal sales to Eskom fell 5% to 13.2Mt (from 13.9Mt in the same period in 2024), while coal exports rose 3% to 3.4Mt. Current export volumes, annualized at 6.8Mt, remain well below the 12Mt peak of 2021.
Koppeschaar said Exxaro believes exports could return to 10–12Mt annually within three to five years, depending on upgrades to rail infrastructure between Lephalale, Ogies, and Richards Bay.
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