Exxaro Resources, a prominent coal producer in South Africa, is broadening its quest for critical mineral assets beyond established ventures. The move is part of the company’s strategic shift away from coal and toward diversification.
Despite being a leading coal producer, Exxaro has interests in iron ore and renewable energy. It now aims to acquire manganese and copper assets, essential minerals in the global shift from polluting fossil fuels to cleaner energy sources.
Among its pursuits was an interest in acquiring Botswana’s Khoemacau copper mine, home to one of Africa’s largest copper deposits, though the $1.88 billion mine was eventually acquired by Chinese miner MMG Ltd.
Richard Lilleike, Exxaro’s chief growth officer leading their mergers and acquisitions drive, highlighted their interest in production assets but also emphasized considering development projects, given the current inflated asset prices.
Lilleike mentioned the capital market’s challenge and Exxaro’s standing to partner with new or developing assets amid these conditions.
Exxaro disclosed a net cash balance of 13.5 billion rand ($728.3 million) as of October’s end, amassing funds up to 15 billion rand for potential acquisitions.
The company is divesting its ferroalloys unit, aligning with its long-term strategy. The unit produces ferrosilicon primarily used in steelmaking, with plans to finalize the sale by June 2024.
Regarding coal production, Exxaro expects it to remain steady at 43 million metric tons by December 31, consistent with previous guidance.
Similarly, export sales are projected to remain flat, just surpassing 5 million tons, attributing this stability to persistent challenges in freight rail logistics.
