Ben Magara, Chief Executive Officer of Exxaro, explains how the mining company defines its material issues, key performance indicators (KPIs) and targets, and how these are linked to incentives to ensure operationalisation.
The business case for sustainability in mining is often framed as risk mitigation; does this limit the ambition?
Framing sustainability only as risk mitigation caps ambition: a project justified solely by the harm it avoids will only ever be sized to that harm, never to the opportunity. At Exxaro, our standard is value creation.
Our Lephalale Solar Project reduces emissions and saves more than R100 million a year, while advancing our diversified resources strategy. Framed as risk avoidance, it would have been minimised. Framed as value creation, it becomes part of our growth strategy.
For assets such as water infrastructure or community development, we anchor the case in value creation like social licence, regional economic viability and climate resilience. Investment committee approval does require an underpinning of risk mitigation and operational efficiency.
Do your material sustainability issues have defined KPIs and time-based targets?
Exxaro’s material sustainability issues are identified through a double materiality process. These are supported by KPIs linked to our Sustainable Growth and Impact (SG&I) strategy. Where appropriate, issues are measured against time-based targets. For example, water targets are set annually and linked to employee performance incentives. Decarbonisation targets are tied to renewable energy projects, operational efficiency initiatives and technology replacement strategies, with the organisation’s goal of carbon neutrality by 2050.
Material matters and KPIs are reviewed annually in response to evolving strategy, stakeholder expectations and regulatory requirements, and are scrutinised and approved by Exxaro’s board.
Are KPIs for material issues benchmarked against peer organisations?
We regularly benchmark our material sustainability issues and KPIs against local and international peers to understand our relative performance and identify opportunities for improvement.
Benchmarking forms part of our annual materiality review and draws on peer disclosures, stakeholder insights, our enterprise risk register, the World Economic Forum Global Risks Report and the Institute of Risk Management South Africa, among other sources.
While Exxaro’s targets are designed around our strategic priorities and operating context, peer benchmarking ensures our ambitions remain relevant, disclosures meet evolving stakeholder expectations and performance is assessed against leading industry practice.
Reporting systems are generally backward-looking. What early warning systems do you have in place?
Safety is embedded in all that we do at Exxaro. I always say to employees: “Not in my name – if it is not safe, do not do it.” We emphasise leading indicators such as control effectiveness, Visible Felt Leadership (VFL) engagements and timely close-out of actions. Repeated exposures, underperforming controls or unresolved actions signal rising risk.
Rehabilitation KPIs track backfill volumes and areas rehabilitated against target, with slippage signalling rising environmental liability and financial provisions.
In a water-scarce country, we monitor water quality and usage intensity proactively. Air quality and dust are our most visible community impacts and provide an early read on our social licence to operate.
Exxaro has extensive environmental, social and governance (ESG) metrics; which ones have changed business decisions and which are primarily for reporting?
Exxaro’s ESG metrics include the lost-time injury frequency rate (LTIFR), occupational health injury rate, communicable and non-communicable disease, and greenhouse gas emissions.
Reporting on communicable diseases, particularly the human immunodeficiency virus (HIV) and tuberculosis (TB), led our Aga Setshaba Foundation to partner with the South African National AIDS Council Private Sector Forum, screening host communities and connecting them to care under a Department of Health Memorandum of Understanding.
Reporting on emissions has elevated decarbonisation as a strategic priority, accelerating our roadmap and informing renewable energy investment. The Lephalale Solar Project cuts our scope 2 emissions by 17% and saves the Grootegeluk mine over R100 million a year while lowering our carbon tax exposure.
ESG targets are embedded in your remuneration structures. How material are they to financial performance and do they create genuine behavioural change?
The ESG performance conditions have been strengthened from the 2026 Long-Term Incentive Plan (LTIP) awards through the replacement of the FTSE Russell ESG Index with operationally measurable sustainability targets, namely decarbonisation and rehabilitation.
The decarbonisation measure supports Exxaro’s commitment to carbon neutrality by 2050, with a target to reduce scope 1 and 2 emissions by 40% by 2030. The LTIP target tracks the reduction in absolute emissions relative to the 2022 baseline, reflecting contributions from renewable energy projects and operational decarbonisation initiatives.
Rehabilitation performance measures the achievement of planned backfill volumes across Exxaro’s opencast operations. Concurrent rehabilitation reduces long-term environmental liabilities and forms a key component of Exxaro’s responsible mining practices.
