Investor confidence in South Africa has surged in 2024, Exxaro’s financial director Riaan Koppeschaar reported on Tuesday, December 3.
The mining and renewable energy company expects further growth in investments, driven by energy and logistical improvements.
Koppeschaar highlighted key factors boosting sentiment, including renewable energy investments, Eskom’s improved maintenance, and progress in ports and rail reforms.
“It is anticipated that private investment in renewable energy, increased maintenance by Eskom, a smooth run without loadshedding, and transmission system developments, along with the continuation and acceleration in the implementation of the structural reforms in ports and rail, will result in further reducing energy and logistical constraints and positive improvements in investment sentiment towards South Africa,” he said.
Exxaro’s own renewable energy arm, Cennergi, is forecasted to generate 729 GWh of electricity this year. This is an increase from 727 GWh in 2023.
The company’s R1.56-billion Lephalale solar project is set to launch in early 2025. The project will generate 176 GWh annually, reduce emissions, and create jobs for 300 to 400 workers during construction.
Social Investments and Local Procurement Soar in South Africa
Exxaro’s social investment efforts have grown significantly. For the ten months up to October, the company spent R2.4-billion, a 26% increase from 2023. Local procurement for small, medium-sized, and microenterprises (SMMEs) made up 75% of this amount.
These initiatives supported 488 SMMEs through local procurement and enterprise development programs.
Exxaro’s coal production in 2024 is expected to fall to 40 million tonnes, down from 42 million tonnes in 2023. Similarly, coal sales are projected to drop to 39.8 million tonnes from last year’s 40.5 million tonnes. On the other hand, metallurgical sales are set to grow by 3%, fueled by domestic demand.
Iron-ore markets faced challenges due to China’s slow economic growth and property market struggles. Increased global supply and high inventories at Chinese ports weighed on pricing.
Progress in Logistics and Rail Operations
State-owned Transnet transported 42.1-million tonnes of coal to Richards Bay Coal Terminal from January to October. This marks an improvement in rail performance, with annualized volumes rising from 47 million to 50.5 million tonnes.
However, rail output from Grootegeluk averaged only three trains weekly compared to Mpumalanga’s eight.
Exxaro has advanced its decarbonisation strategy with a peer-reviewed roadmap aligned with international frameworks. Koppeschaar noted, “The review outcomes were positive.” The roadmap will be finalized by the first quarter of 2025.
The company is closely monitoring the Climate Change Act, signed into law in July, and potential changes to carbon tax regulations. Feedback on carbon budget allocation from the Department of Forestry, Fisheries and the Environment is also awaited.
Despite challenges in coal and iron-ore markets, Exxaro remains optimistic. The company forecasts stable global economic growth, moderating inflation, and favorable financial conditions in 2025.
With a strong focus on renewable energy, local community support, and sustainability, Exxaro aims to drive positive change in South Africa.