This investment marks a significant milestone in the company’s strategic journey – anchored in its strong coal resources, Exxaro is transitioning into a diversified minerals and energy-solutions business.

In a transformational transaction, Exxaro has entered into binding agreements to acquire shares and claims in Manganese assets held by Ntsimbintle Holdings and OM Holdings. The target assets consist of:

• 74% of Ntsimbintle Mining
• 19.99% of Jupiter
• 100% of Ntsimbintle Marketing and Trading
• 51% of Mokala, and
• 9% of Hotazel Manganese Mines

The target assets to be acquired from OM Holdings comprise 26% of Ntsimbintle Mining, resulting in Exxaro acquiring 100% of Ntsimbintle Mining through the transaction.

Through the acquisition Exxaro gains exposure into four operating mines, which includes 60,1% effective ownership in Tshipi Borwa Mine (including 50.1% marketing rights), 51% in Mokala, and 9% in Hotazel Manganese Mines which operate Mamatwan and Wessels mines.

“This transaction puts together two strong BEE companies who are both consistent dividend payers and positions Exxaro as formidable and diversified mining company of reference in South Africa and I am delighted that we can utilise our strong coal resources as a base to prudently accelerate our asset portfolio to include transition minerals and to grow our energy solutions business.

“This acquisition provides Exxaro with a strong entry point into the manganese sector. Manganese is essential to steelmaking and has a growing market in the battery and renewable technology supply chains. The acquisition will also see us deploy our operational and commercial expertise in bulk commodities, logistics, and deep knowledge of the South African mining landscape including the regulatory environment, to unlock sustained growth and stakeholder value in the Kalahari Manganese Field,” explains Exxaro CEO Ben Magara.

The unadjusted purchase price consideration of R11.67 billon is a prudent allocation of Exxaro’s capital and is value, earnings, and cashflow accretive from day one. As per Ntsimbintle Holdings and OM Holdings SPAs, the unadjusted price excludes the potential tag along rights of Mokala as well as agreed escalation based on the lock box structure.

“We believe this landmark transaction in terms of which Exxaro is acquiring Ntsimbintle’s portfolio of high-quality manganese assets is significant to the South African mining sector and reinforces Exxaro’s position as a South African mining champion. We are pleased that these assets will remain in South African hands as Exxaro is an excellent custodian that shares Safika and Ntsimbintle’s strong values of safety, sustainability and a social license to operate whilst providing certainty to our valued employees and host communities. The sale of our manganese assets is consistent with our long-term plan to continue to simplify and strengthen our portfolio to generate shareholder value,” states Saki Macozoma, Chairman of Safika and Ntsimbintle Holdings.

In the event Blue Falcon, who owns 49% of Mokala Mines, exercises their tag along rights inclusive of escalations, the maximum consideration could go up to R14.64 billion which is still within the company’s available cash reserves. Post transaction, Exxaro’s balance sheet will remain strong with a net cash position. Furthermore, it does not expect that this acquisition will deter Exxaro from continuing to be a consistent dividend payer.

The acquisition gives Exxaro unrivalled commodity diversity and strength with long life assets, well above its minimum target of 10-years, and upside brownfield expansion potential through a substantial mineral resource base. They have long-term contracts and a stable customer base predominantly in China and India tying in well with Exxaro’s existing exposure to these export markets.

The mines are in an established mining hub with good infrastructure. The bulk and open pit mining methods used at these operations are within Exxaro’s core strength and capabilities, thus providing technical synergies.

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This acquisition is a natural extension of Exxaro’s strategic commitment to building a sustainable, future-fit portfolio. It underscores the company’s transition into an energy mix, in addition to its coal resources. The broader strategy includes significant investments in renewable energy including, wind and solar, exploration of essential transition minerals like manganese and copper, and the use of innovative technologies to enhance operational efficiency and reduce environmental impact. Diversification remains a priority as Exxaro is positioned to lead in South Africa’s low-carbon economy, delivering long-term value for shareholders, communities, and the planet.

“Part of our considerations for the acquisition was ensuring that our investment aligns with our priorities of safe, efficient, and environmentally conscious operations, with a strong focus on beneficiation to enhance product value. Our approach ensures that our growth also uplifts local communities through job creation, skills development, and sustainable social impact — reinforcing our role as a purpose-driven, proudly South African company.

“We are looking forward to entering into new partnerships with established, reputable mining companies and strong management and employees in the Kalahari Manganese Field, and unlocking value for South Africa’s economy at large,” concludes Magara.

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