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Exx - Exxaro Resources Limited - Reviewed Group Interim Financial Results And

Release Date: 14/08/2008 07:05:31      Code(s): EXX
EXX - Exxaro Resources Limited - Reviewed group interim financial results and   
physical information for the six-month period ended 30 June 2008                
Exxaro Resources Limited                                                        
Registration number: 2000/011076/06                                             
JSE share code: EXX                                                             
ISIN code: ZAE000084992                                                         
ADR code: EXXAY                                                                 
Reviewed group interim financial results and physical information               
for the six-month period ended 30 June 2008                                     
- Record coal operating profit of R935 million                                  
- Headline earnings per share up 53%                                            
- Interim dividend of 175 cents per share                                       
- 14,6Mtpa coal supply to new Medupi power station agreed                       
Condensed group income statement                                                
                                          6 months   6 months  12 months        
ended      ended     ended            
                                          30 June    30 June   31 Dec           
                                          2008       2007      2007             
                                          Reviewed   Reviewed  Audited          
Rm         Rm        Rm               
Revenue                                     5 782      4 852     10 157         
Operating expenses                          (4 976)    (3 961)   (8 713)        
Net operating profit                        806        891       1 444          
Net financing costs (note 4)                (87)       (109)     (215)          
Share of income from investments and                                            
equity                                                                          
accounted investments                       753        401       730            
Profit before taxation (note 2)             1 472      1 183     1 959          
Income tax expense                          (226)      (330)     (512)          
Profit for the period                       1 246      853       1 447          
Profit attributable to:                                                         
Owners of the parent                        1 244      839       1 427          
Minority interest                           2          14        20             
Profit for the period                       1 246      853       1 447          
Ordinary shares (million)                                                       
- in issue                                  354        352       353            
- weighted average number of shares         343        341       341            
- diluted weighted average number of        359        354       355            
shares                                                                          
Attributable earnings per share (cents)                                         
- basic                                     363        246       418            
- diluted                                   347        237       402            
Group statement of comprehensive income                                         
6 months  6 months   12 months         
                                         ended     ended      ended             
                                         30 June   30 June    31 Dec            
                                         2008      2007       2007              
Reviewed  Reviewed   Audited           
                                         Rm        Rm         Rm                
Profit for the period                      1 246     853        1 447           
Other comprehensive income:                                                     
Exchange differences on translating        582       174        176             
foreign operations                                                              
Cash flow hedges                           143       (47)       (39)            
Share of comprehensive income of           42        33         46              
associates                                                                      
Share-based payment movement               62        38         133             
Income tax relating to components of       (64)                 2               
other comprehensive income                                                      
Other comprehensive income for the         765       198        318             
period, net of tax                                                              
Total comprehensive income for the         2 011     1 051      1 765           
period                                                                          
Total comprehensive income attributable                                         
to:                                                                             
Owners of the parent                       2 005     1 037      1 749           
Minority interest                          6         14         16              
Total comprehensive income for the         2 011     1 051      1 765           
period                                                                          
RECONCILIATION OF HEADLINE EARNINGS                                             
                                         Gross     Tax        Net               
Rm        Rm         Rm                
6 months ended 30 June 2008                                                     
Net profit attributable to owners of the                       1 244            
parent                                                                          
Adjusted for:                                                                   
- IAS 16: Impairment of property, plant   7                    7                
and equipment                                                                   
- IAS 16: Reversal of impairment of                                             
property, plant                                                                 
and equipment                             (1)                  (1)              
- IAS 16: Gains or losses on disposal of  58        (16)       42               
property, plant and equipment                                                   
Headline earnings                         64        (16)       1 292            
6 months ended 30 June 2007                                                     
Net profit attributable to owners of the                       839              
parent                                                                          
Adjusted for:                                                                   
- IAS 16: Impairment of property, plant   6                     6               
and equipment                                                                   
- IAS 16: Gains or losses on disposal of   2        (1)         1               
property, plant and equipment                                                   
- IAS 28: Share of associate`s IAS 16 -    (1)                  (1)             
gains or losses on disposal of property,                                        
plant and equipment                                                             
- IAS 36: Impairment reversal of assets    (6)                  (6)             
Headline earnings                         1         (1)        839              
Year ended 31 December 2007                                                     
                                                                                
Net profit attributable to owners of the                       1 427            
parent                                                                          
Adjusted for:                                                                   
- IAS 16: Impairment of property, plant   23                    23              
and equipment                                                                   
- IAS 16: Gains or losses on disposal of   17       (5)         12              
property, plant and equipment                                                   
- IAS 28: Share of associate`s IAS 16 -    (3)       1         (2)              
gains or losses on disposal of property,                                        
plant and equipment                                                             
- IAS 28: Share of associate`s IAS 39 -    (7)       1          (6)             
recycling of remeasurements from equity                                         
to the income statement, including a                                            
hedge of net investment in a foreign                                            
entity but excluding cash flow hedges                                           
- IAS 36: Impairment reversal of assets    (6)                  (6)             
Headline earnings                         24        (3)        1 448            
                                         6 months  6 months   12 months         
                                         ended     ended      ended             
                                         30 June   30 June    31 Dec            
2008      2007       2007              
                                         Reviewed  Reviewed   Audited           
                                         Rm        Rm         Rm                
Headline earnings per share (cents)                                             
- basic                                   377       246        425              
- diluted                                 360       237        408              
Condensed group statement of financial position                                 
                                    At       At         At                      
30 June   30 June     31 Dec                 
                                   2008      2007       2007                    
                                   Reviewed  Reviewed   Audited                 
                                   Rm        Rm         Rm                      
ASSETS                                                                          
Non-current assets                                                              
Property, plant and equipment       8 655     7 743      8 235                  
Biological assets                   30        26         30                     
Intangible assets                   95        74         76                     
Investments in unlisted associates  1 231     724        757                    
and joint ventures (note 5)                                                     
Deferred tax                        818       701        732                    
Other financial assets (note 5)     1 115     1 046      1 031                  
                                   11 944    10 314     10 861                  
Current assets                                                                  
Inventories                         1 656     1 645      1 531                  
Trade and other receivables         2 088     1 633      1 931                  
Cash and cash equivalents           1 664     857        850                    
                                   5 408     4 135      4 312                   
Non-current assets classified as    2         95         2                      
held for sale                                                                   
Total assets                        17 354    14 544     15 175                 
EQUITY AND LIABILITIES                                                          
Capital and reserves                                                            
Equity attributable to owners of    11 478    9 276      9 804                  
the parent                                                                      
Minority interest                   27        29         19                     
Total equity                        11 505    9 305      9 823                  
Non-current liabilities                                                         
Interest-bearing borrowings         1 283     1 299      1 259                  
Non-current provisions              1 442     1 168      1 329                  
Deferred tax                        1 204     1 097      1 077                  
3 929     3 564      3 665                   
Current liabilities                                                             
Trade and other payables            1 592     1 436      1 449                  
Interest-bearing borrowings         141       131        74                     
Current tax payable                 164       82         137                    
Current provisions                  23        26         27                     
                                   1 920     1 675      1 687                   
Total equity and liabilities        17 354    14 544     15 175                 
Net (cash)/debt (note 8)            (240)     573        483                    
Net asset value per share (cents)   3 242     2 635      2 778                  
Capital expenditure                                                             
- incurred                          465       396        1 296                  
- contracted                        715       417        450                    
- authorised but not contracted     1 036     693        1 278                  
Capital expenditure contracted                                                  
relating to captive mines                                                       
Tshikondeni, Arnot and Matla, which                                             
will be financed by                                                             
ArcelorMittal SA Limited and Eskom  477       444        72                     
respectively                                                                    
Commitment relating to the          2 353     2 353      2 353                  
acquisition of Namakwa Sands and a                                              
26% interest in Black Mountain                                                  
(Pty) Limited from Anglo Operations                                             
Limited, subject to price                                                       
adjustments                                                                     
Contingent liabilities (note 9)     496       166        201                    
Contingent assets (note 10)         216                                         
Operating lease commitments          90       122        127                    
Condensed group statement of cash flows                                         
                                    6 months 6 months   12 months               
                                    ended    ended      ended                   
30 June  30 June    31 Dec                  
                                    2008     2007       2007                    
                                    Reviewed Reviewed   Audited                 
                                    Rm       Rm         Rm                      
Cash retained from operations        1 523    1 199      2 308                  
- net financing costs                (45)     (64)       (116)                  
- tax paid                           (216)    (309)      (462)                  
- dividends paid (note 6)            (348)    (4)        (223)                  
Cash used in investing activities                                               
- capital expenditure                (465)    (396)      (1 296)                
- proceeds from disposal of          3        10         50                     
property, plant and equipment                                                   
- acquisition of subsidiary          (30)     (8)        (8)                    
(note 7)                                                                        
- investments acquired               (69)     (184)      (249)                  
- dividends from investments and     352      71         379                    
equity accounted investments                                                    
- other                              86       (5)        5                      
Net cash inflow                      791      310        388                    
Net cash flow from financing                                                    
activities                                                                      
- cash flows from issue of shares    17       100        114                    
- increase in minority loans         1                                          
- borrowings raised/(repaid)         5        (468)      (567)                  
Net increase/(decrease) in cash and  814      (58)       (65)                   
cash equivalents                                                                
Special purpose entities                      9          9                      
consolidated                                                                    
Cash and cash equivalents at         850      906        906                    
beginning of period                                                             
Cash and cash equivalents at end of  1 664    857        850                    
period                                                                          
Group statement of changes in equity                                            
                                                  Share     Share               
                                                  capital   premium             
                                                  Rm        Rm                  
Balance at 31 December 2006                        4         5 135              
Total comprehensive income                                                      
Issue of share capital(1)                                    9                  
Share placement(2)                                           91                 
- issue                                                      640                
- re-purchase                                                (460)              
- expenses                                                   (89)               
Prior year dividend in specie reclassification               (3 186)            
Special purpose entities now consolidated                                       
Minority share buy-out                                                          
Balance at 30 June 2007                            4         2 049              
Total comprehensive income                                                      
Dividends paid                                                                  
Issue of share capital(1)                                    14                 
Special purpose entities now consolidated                                       
Transfer to retained income                                                     
Minority share buy-out                                                          
Balance at 31 December 2007                        4         2 063              
Total comprehensive income                                                      
Dividends paid                                                                  
Issue of share capital(1)                                    17                 
Minority share additional contributions                                         
Balance at 30 June 2008                            4         2 080              
                                                                                
Dividend paid per share (cents) in respect of      160                          
the previous financial year                                                     
Dividend declared per share (cents) in respect     175                          
of this interim period(3)                                                       
(1) Issued to the Kumba Resources Management Share Trust due to options         
exercised.                                                                      
(2) Re-purchase of 10 million shares from Anglo South Africa Capital            
(Pty) Limited on 13 April 2007 at R45.99 per share and subsequent re-           
issue of 10 million new Exxaro shares at R64 per share. Secondary Tax           
on Companies (STC) on the share re-purchase of R57.5 million is                 
included in profit for the period.                                              
(3) The STC payable on dividends will be nil after taking into account          
STC credits.                                                                    
Group statement of changes in equity (continued)                                
                       Other components of equity                               
                       Foreign      Financial   Equity                          
currency     instrument  settled  Insuranc               
                                    s                    e                      
                       translation  revaluatio  reserve  reserve                
                       s            n                                           
Rm           Rm          Rm       Rm                     
Balance at 31 December  379          24          802                            
2006                                                                            
Total comprehensive     174          (48)        72                             
income                                                                          
Issue of share                                                                  
capital(1)                                                                      
Share placement(2)                                                              
- issue                                                                         
- re-purchase                                                                   
- expenses                                                                      
Prior year dividend in                                                          
specie                                                                          
reclassification                                                                
Special purpose                                                                 
entities now                                                                    
consolidated                                                                    
Minority share buy-out                                                          
Balance at 30 June      553          (24)        874                            
2007                                                                            
Total comprehensive     (26)         31          110                            
income                                                                          
Dividends paid                                                                  
Issue of share                                                                  
capital(1)                                                                      
Special purpose                                                                 
entities now                                                                    
consolidated                                                                    
Transfer to retained                             (16)                           
income                                                                          
Minority share buy-out                                                          
Balance at 31 December  527          7           968                            
2007                                                                            
Total comprehensive     573          106         74                             
income                                                                          
Dividends paid                                                                  
Issue of share                                                                  
capital(1)                                                                      
Minority share                                                                  
additional                                                                      
contributions                                                                   
Balance at 30 June      1 100        113         1 042                          
2008                                                                            
Dividend paid per                                                               
share (cents) in                                                                
respect of the                                                                  
previous financial                                                              
year                                                                            
Dividend declared per                                                           
share (cents) in                                                                
respect of this                                                                 
interim period(3)                                                               
(1) Issued to the Kumba Resources Management Share Trust due to                 
options exercised.                                                              
(2) Re-purchase of 10 million shares from Anglo South Africa                    
Capital (Pty) Limited on 13 April 2007 at R45.99 per share and                  
subsequent re-issue of 10 million new Exxaro shares at R64 per                  
share. Secondary Tax on Companies (STC) on the share re-purchase                
of R57.5 million is included in profit for the period.                          
(3) The STC payable on dividends will be nil after taking into                  
account STC credits.                                                            
Group statement of changes in equity (continued)                                
                                    Attributab                                  
                                    le                                          
Retained     to owners   Minorit Total                   
                                    of          y                               
                       income       the parent  interes equity                  
                                                t                               
Rm           Rm          Rm      Rm                      
Balance at 31 December  1 798        8 142       27      8 169                  
2006                                                                            
Total comprehensive     839          1 037       14      1 051                  
income                                                                          
Issue of share                       9                   9                      
capital(1)                                                                      
Share placement(2)                   91                  91                     
- issue                              640                 640                    
- re-purchase                        (460)               (460)                  
- expenses                           (89)                (89)                   
Prior year dividend in  3 186                                                   
specie                                                                          
reclassification                                                                
Special purpose         (3)          (3)                 (3)                    
entities now                                                                    
consolidated                                                                    
Minority share buy-out                           (12)    (12)                   
Balance at 30 June      5 820        9 276       29      9 305                  
2007                                                                            
Total comprehensive     597          712         2       714                    
income                                                                          
Dividends paid          (208)        (208)       (11)    (219)                  
Issue of share                       14                  14                     
capital(1)                                                                      
                                                                                
                                                                                
Special purpose         10           10                  10                     
entities now                                                                    
consolidated                                                                    
Transfer to retained    16                                                      
income                                                                          
Minority share buy-out                           (1)     (1)                    
Balance at 31 December  6 235        9 804       19      9 823                  
2007                                                                            
Total comprehensive     1 252        2 005       6       2 011                  
income                                                                          
Dividends paid          (348)        (348)               (348)                  
Issue of share                       17                  17                     
capital(1)                                                                      
Minority share                                   2       2                      
additional                                                                      
contributions                                                                   
Balance at 30 June      7 139        11 478      27      11 505                 
2008                                                                            
Dividend paid per                                                               
share (cents) in                                                                
respect of the                                                                  
previous financial                                                              
year                                                                            
Dividend declared per                                                           
share (cents) in                                                                
respect of this                                                                 
interim period(3)                                                               
(1) Issued to the Kumba Resources Management Share Trust due to                 
options exercised.                                                              
(2) Re-purchase of 10 million shares from Anglo South Africa                    
Capital (Pty) Limited on 13 April 2007 at R45.99 per share and                  
subsequent re-issue of 10 million new Exxaro shares at R64 per                  
share. Secondary Tax on Companies (STC) on the share re-purchase                
of R57.5 million is included in profit for the period.                          
(3) The STC payable on dividends will be nil after taking into                  
account STC credits.                                                            
Notes to the reviewed financial statements                                      
1.  Basis of preparation                                                        
   The format of the condensed interim report has been revised to               
   bring it in line with the amendments to International Accounting             
   Standard 34, Interim Financial Reporting. IAS 34 has been amended            
following the revision of IAS 1, Presentation of Financial                   
   Statements and IFRS 8, Operating Segments. These amendments have             
   been early adopted.                                                          
   This condensed interim report complies with International                    
Accounting Standard 34, Interim Financial Reporting, and schedule            
   4 part iv of the South African Companies Act. The group financial            
   results have been prepared on the historical cost basis excluding            
   financial instruments and biological assets, which are fair                  
valued, and conform to International Financial Reporting                     
   Standards. The accounting policies adopted are consistent with               
   those applied in the annual financial statements for the year                
   ended 31 December 2007, except for the early adoption of IFRS 8,             
Operating Segments and IAS 1, Presentation of Financial                      
   Statements.                                                                  
   The implementation of IFRS 8 has led to differences in the basis             
   of segmentation compared to previous periods. As a result, new               
operating segments have been identified. IAS 1 and IFRS 8 are                
   disclosure standards and have no other impact on the measurement             
   or recognition of items included in the condensed interim report             
   and accordingly the adoption thereof has had no effect on the                
profit or equity for the period.                                             
                                          6 months  6 months  12                
                                                              months            
                                          ended     ended     ended             
30 June   30 June   31 Dec            
                                          2008      2007      2007              
                                          Reviewed  Reviewed  Audited           
                                          Rm        Rm        Rm                
2.  Profit before tax is arrived at after                                       
   including:                                                                   
   Depreciation and amortisation          (415)     (368)     (763)             
   Financing costs                        (141)     (153)     (311)             
Interest income                        54        44        96                
   Net realised foreign currency          107       (2)       (42)              
   exchange gains/(losses)                                                      
   Net unrealised foreign exchange        (17)      (41)      (32)              
losses                                                                       
   Derivative instruments held for        25        (4)       61                
   trading                                                                      
   Fair value adjustment on financial     (7)       29        51                
instruments                                                                  
   Impairment charges (note 3)            (6)                 (17)              
   Net deficit on disposal of property,   (58)      (2)       (17)              
   plant and equipment                                                          
3.  Impairment charges                                                          
   Impairment of property, plant and      (7)       (6)       (23)              
   equipment                                                                    
   Reversal of impairment of property,    1                                     
plant and equipment                                                          
   Reversal of impairment of other                  6         6                 
   investments                                                                  
   Total impairments before and after     (6)                 (17)              
tax                                                                          
4.  Net financing costs                                                         
   Interest expense and loan costs        67        78        153               
   Finance leases                         31        30        59                
Interest income                        (54)      (44)      (96)              
   Net interest expense                   44        64        116               
   Interest adjustment on non-current     43        45        99                
   provisions                                                                   
Net financing cost as per income       87        109       215               
   statement                                                                    
5.  Investments                                                                 
   Unlisted investments in associates                                           
- directors` valuation                 14 338    8 900     9 110             
   Unlisted investments included in                                             
   other financial assets                                                       
   - directors` valuation                 360       333       328               
6.  Dividends paid                                                              
   Cash dividends                         348                 211               
   Cash dividends paid to minorities                4         12                
   relating to previous year                                                    
Total dividends paid                   348       4         223               
7.  Business combinations                                                       
   On 11 April 2008, the group acquired                                         
   76% of the issued share capital of                                           
Exxaro Madencilik Sanayi Ve Ticaret                                          
   A.S., Turkey, which is included in                                           
   the other segment results.                                                   
   The acquired business contributed                                            
neither revenue nor operating profits                                        
   to the group for the period from 11                                          
   April 2008 to 30 June 2008.                                                  
   Details of assets acquired are as                                            
follows:                                                                     
   - cash paid on acquisition             (30)                                  
   - fair value of assets acquired        30                                    
   Fair value of assets acquired                                                
- intangible assets                    30                                    
   Fair value of net assets               30                                    
   Total purchase consideration           (30)                                  
   Cash outflow on acquisition of         (30)                                  
subsidiary                                                                   
8.  Net cash/debt                                                               
   Net cash/debt is calculated as being interest-bearing borrowings             
   less cash and cash equivalents.                                              
9.  Contingent liabilities                                                      
   Includes guarantees in the normal course of business from which it           
   is anticipated that no material liabilities will arise. This                 
   includes guarantees to banks and other institutions. The increase            
in 2008 is mainly attributable to guarantees issued to the                   
   Department of Minerals and Energy in respect of environmental                
   liabilities on immediate closure of mining operations.                       
10. Contingent asset                                                            
An outstanding insurance claim for the Furnace 2 incident at                 
   Exxaro TSA Sands (Pty) Limited for which it is probable that                 
   settlement will be received in the second half of 2008.                      
11. Related party transactions                                                  
The company and its subsidiaries, in the ordinary course of                  
   business, entered into various sale and purchase transactions with           
   associates and joint ventures. These transactions were subject to            
   terms that are no less favourable than those arranged with third             
parties.                                                                     
12. Post-balance sheet event                                                    
   During June 2008 the group announced an empowerment deal involving           
   Rosh Pinah Zinc Corporation (Pty) Limited, whereby Exxaro`s                  
effective interest is reduced from 93,9% to 50,04% in favour of a            
   number of Namibian shareholder groupings. The effective date of              
   the empowerment transaction is 1 July 2008.                                  
13. JSE Limited requirements                                                    
The interim announcement has been prepared in accordance with the            
   listing requirements of the JSE Limited.                                     
14. Corporate governance                                                        
   The group complies in all material respects with the Code of                 
Corporate Practice and Conduct published in the King II Report on            
   Corporate Governance.                                                        
15. Auditors` review                                                            
   The interim results have been reviewed by the company`s auditors,            
Deloitte & Touche. Their unmodified review opinion is available              
   for inspection at the company`s registered office.                           
Unaudited physical information (`000 tonnes)                                    
                                       6 months   6 months  12 months           
ended      ended     ended               
                                       30 June    30 June   31 Dec              
                                       2008       2007      2007                
Coal                                                                            
Production                                                                      
- Power station                         18 118     16 830    34 246             
*Tied mines(1)                         8 962      8 353     16 732              
*Commercial mines                      9 156      8 477     17 514              
- Coking                                1 370      1 479     2 962              
*Tied mines                            171        242       463                 
*Commercial mines                      1 199      1 237     2 499               
- Other commercial operations           2 427      2 016     4 112              
Total                                   21 915     20 325    41 320             
Sales                                                                           
- Eskom                                 17 880     16 604    34 226             
*Tied mines                            8 942      8 337     16 699              
*Commercial mines                      8 938      8 267     17 527              
- Other domestic                        2 607      2 572     5 237              
*Tied mines                            200        214       449                 
*Commercial mines                      2 407      2 358     4 788               
- Export commercial operations          1 284      813       1 821              
Total                                   21 771     19 989    41 284             
Mineral Sands - RSA                                                             
Production                                                                      
- Ilmenite                              133        187       367                
- Zircon                                16         19        34                 
- Rutile                                7          9         17                 
- Pig iron                              29         48        90                 
- Scrap pig iron                        8          9         20                 
- Chloride slag                         56         77        150                
- Sulphate slag                         10         14        26                 
Sales                                                                           
- Ilmenite                              20         30        50                 
- Zircon                                22         14        27                 
- Rutile                                7          9         18                 
- Pig iron                              39         45        91                 
- Scrap pig iron                        6          4         8                  
- Chloride slag                         49         81        163                
- Sulphate slag                         6          8         29                 
Mineral Sands - Australia(2)                                                    
Production                                                                      
- Ilmenite                              85         111       216                
- Zircon                                13         19        36                 
- Rutile                                6          8         17                 
- Synthetic rutile                      56         48        100                
- Leucoxene                             6          8         16                 
- Pigment                               22         26        54                 
Sales                                                                           
- Ilmenite                                         10        20                 
- Zircon                                14         16        29                 
- Rutile                                5          2         16                 
- Synthetic rutile                      27         21        57                 
- Leucoxene                             8          7         17                 
Base metals                                                                     
Production                                                                      
- Zinc concentrate                      47         53        95                 
- Zinc metal                            60         61        124                
- Zincor                                47         51        101                
- Chifeng(3)                            13         10        23                 
- Lead concentrate                      12         11        22                 
Zinc metal sales                                                                
- Domestic                              51         45        93                 
- Export                                15         12        29                 
Total                                   66         57        122                
Lead concentrate sales                                                          
- Export                                7          7         19                 
(1) Tied mines refer to mining operations that supply their entire              
production to either Eskom or ArcelorMittal SA Limited in terms of              
contractual agreements.                                                         
(2) The production and sales tonnes reflect Exxaro Sands Australia`s            
50% interest in the Tiwest joint venture with Tronox Inc., Western              
Australia.                                                                      
(3) The effective interest in the physical information for the Chifeng          
(Hongye) refinery has been disclosed.                                           
COMMENTS                                                                        
OPERATING RESULTS                                                               
Comments are based on a comparison of the group`s reviewed financial results and
physical information for the six-month periods ended 30 June 2008 and 2007      
respectively.                                                                   
The coal business continued to benefit from strong demand, higher sales volumes 
and significant price increases. The base metals business delivered lower       
operating profit in line with declining zinc prices while generally depressed   
mineral sands prices, lower volumes and a persistent strong Australian dollar   
had a major adverse effect on the operating results of the mineral sands        
business.                                                                       
Revenue increased by 19% to R5 782 million while net operating profit decreased 
by R85 million to R806 million due to lower profits in the base metals business 
and a significant loss in the mineral sands business.                           
A weaker average exchange rate of R7,54 to the US dollar was realised compared  
to R7,33 for the corresponding period in 2007. The continued strengthening of   
the Australian dollar to the US dollar, from an average of 0,81 US cents in the 
six-month period to 30 June 2007 to 0,93 US cents in the period under review,   
however, impacted negatively on the financial results of the mineral sands      
operation in Australia.                                                         
EARNINGS                                                                        
Attributable earnings, which includes the group`s 20% interest in the after-tax 
profits of Sishen Iron Ore Company (Pty) Limited (SIOC) amounting to R735       
million, increased by 48% from R839 million to R1 244 million or 363 cents per  
share.                                                                          
Headline earnings of R1 292 million are 54% higher than for the corresponding   
period of R839 million while headline earnings per share increased from 246     
cents to 377 cents.                                                             
CASH FLOW                                                                       
Cash retained from operations of R1 523 million was primarily used to fund      
taxation payments of R216 million, the final dividend for the 2007 financial    
year of R348 million and capital expenditure of R465 million. R221 million of   
this amount was invested in new capacity and R244 million applied to sustaining 
and environmental capital.                                                      
Net cash inflow was R481 million higher at R791 million compared to the         
corresponding period in 2007 resulting from higher cash generation from         
operations and a R352 million dividend receipt from SIOC in March 2008.         
Net debt of R483 million at 31 December 2007 has changed into a net cash        
position of R240 million at 30 June 2008 due to the delays in effecting the     
committed payment of R2 353 million, subject to the disclosed price adjustments,
for the acquisition of the net assets of Namakwa Sands and a 26% interest in    
Black Mountain/Gamsberg on completion of the conversion and cession process of  
their mining rights to the group.                                               
SAFETY, HEALTH AND ENVIRONMENT (SHE)                                            
The group remains committed to achieving a working environment that is fatality 
and injury free. Its safety awareness and preventative programmes have been     
enhanced by a strong focus on hazard identification and visible felt leadership.
Regrettably, despite ongoing interventions, two fatalities were suffered during 
the period under review. Improvement of the average lost time injury frequency  
rate (LTIFR) per two hundred thousand man-hours worked of 0,45 for the year to  
date against a target of 0,21 and compared to 0,36 achieved at the end of 2007, 
remains a key objective.                                                        
The group is further committed to achieving industry health sector targets by   
2013. Following an assessment of its operations, programmes to ensure mitigation
of risks from noise and dust are being implemented. In line with the HIV/Aids   
strategy, the current focus is to improve voluntary counselling and testing     
(VCT) enrolment by creating a conducive environment for disclosure and treatment
participation. VCT participation increased to 42% of employees with the         
prevalence rate unchanged at 13%.                                               
All the group`s operations have fully compliant Environmental Management        
Programmes required under the Mineral and Petroleum Resources Development Act   
(MPRDA) and the National Environmental Management Act (NEMA) which is one of the
key indicators of ensuring that Exxaro remains a sustainable business. 71% of   
operations are certified under both the international health and safety         
certification (OHSAS 18001) and environmental certification (ISO 14001). The    
target to have all operations fully compliant by December 2008 is on track.     
REPORTED SEGMENT RESULTS                                                        
Implementation of a new International Financial Reporting Standard (IFRS 8) on  
operating segments has led to differences in the basis of disclosure of         
segmentation compared to previous periods. The revised segments are based on the
group`s different products and operations as well as the physical location of   
these operations and associated products.                                       
Segment results                                                                 
                                 6 months    6 months  12 months                
ended      ended      ended                    
                                 30 June    30 June    31                       
                                                       December                 
                                 2008       2007       2007                     
Reviewed   Reviewed   Audited                  
                                 Rm         Rm         Rm                       
Revenue                                                                         
Coal                              3 597      2 319      5 087                   
Tied operations                  1 106      838        1 768                    
Commercial operations            2 491      1 481      3 319                    
Mineral Sands                     1 035      1 040      2 172                   
KZN Sands                        460        480        984                      
Australia Sands                  575        560        1 188                    
Base Metals                       1 063      1 416      2 732                   
Rosh Pinah                       244        577        941                      
Zincor                           1 032      1 358      2 558                    
Inter-segmental                  (213)      (519)      (767)                    
Other                             87         77         166                     
Total - external revenue          5 782      4 852      10 157                  
Net operating profit/(loss)                                                     
Coal                              935        393        885                     
Tied operations                  72         50         88                       
Commercial operations            863        343        797                      
Mineral Sands                     (166)      8          (97)                    
KZN Sands                        (27)       (28)       (157)                    
Australia Sands                  (139)      36         60                       
Base Metals                       89         502        688                     
Rosh Pinah                       57         330        457                      
Zincor                           69         192        298                      
Other                            (37)       (20)       (67)                     
Other                             (52)       (12)       (32)                    
Total                             806        891        1 444                   
OPERATIONS                                                                      
Coal                                                                            
Production of power station coal was 1 288kt higher at 18,1Mt than for the      
comparative period in 2007 with both the Eskom tied and the commercial mines    
achieving higher production. Matla, after obtaining regulatory approval of a    
river diversion and through improved efficiencies, increased production by 299kt
to offset the impact of the second half of 2007 face break which negatively     
affected production in the first quarter of 2008. Arnot in turn increased       
production by 311kt as an optimisation project focusing on throughput that      
commenced in February 2008, has already shown positive results.                 
Various on-mine initiatives at the commercial operations of Grootegeluk and     
Leeuwpan aimed at meeting the increased demand of 679kt from Eskom, were        
complemented by the mining of new reserves at the North Block Complex (NBC)     
which delivered increased product volumes of 251kt.                             
Lower coking coal production of 109kt compared to the corresponding period in   
2007, was due to challenging geological and mining conditions at Tshikondeni.   
Production of steam coal was 20% higher at 2 427kt due to the accelerated start-
up of Inyanda in the latter part of 2007 to mitigate the loss of production at  
New Clydesdale (NCC) following the closure of the underground operations during 
2007. Higher steam coal production at Leeuwpan mine of 98kt resulted from       
increased overburden removal with a view to additional run of mine production   
for 2008.                                                                       
Sales to Eskom increased by approximately 1,3Mt on the back of increased demand 
while other domestic sales remained largely in line with the comparative period 
in 2007.                                                                        
Export sales increased by 58% on higher international demand supported by       
increased export allocation at the Richards Bay Coal Terminal (RBCT). Two new   
mines, Inyanda and Mafube, are in the process of ramping-up and have already    
contributed to increased production and sales.                                  
The 32% increase in revenue from the tied mines for the period under review     
results from increased volumes and the higher operating cost that is            
recoverable, while the 68% increase in revenue from the commercial mines is due 
to higher local and international selling prices, increased volumes and a weaker
local currency.                                                                 
On the back of the substantially higher revenue the coal business achieved a    
record operating income of R935 million for the six months ended 30 June 2008 at
an operating margin of 26%, a 138% improvement on the same period in 2007       
despite inflationary pressures primarily in the cost of fuel, labour and        
electricity.                                                                    
Mineral Sands                                                                   
KZN Sands                                                                       
KZN Sands reported lower production volumes following the significant damage    
caused to Furnace 2 after the water ingress incident at the end of February 2008
as previously reported. Furnace 1, however, delivered good production results.  
More than 50kt of slag was tapped in the period under review representing an    
equivalent of 93% of cold feed design capacity, a new record. Low manganese pig 
iron production was lower resulting from the decreased slag throughput while    
ilmenite production was aligned with the lower smelter feed requirements        
compared to the comparative period in 2007. Zircon and rutile production were   
marginally lower than the comparative period due to declining mineral grades in 
the mine area while awaiting approval of the mining rights for adjacent mining  
areas.                                                                          
Revenue was R20 million lower while net operating profit remained in line with  
the corresponding period in 2007, at a loss of R27 million as a result of the   
loss of production from the furnace outage. The net operating loss includes the 
derecognition of damaged Furnace 2 assets of R52 million and a write-down of the
crude ilmenite stockpile by R14 million.                                        
The originally planned four-month maintenance shut on Furnace 2 has been brought
forward following the water ingress incident. Current estimates suggest that the
repairs to the furnace will result in additional downtime. Completion is        
scheduled for December 2008 with first metal tap in January 2009. The proceeds  
of an insurance claim have not been recognised in the results under review.     
Continued investigations into optimising the hearth technology at KZN Sands are 
ongoing, with feasibility study results expected at the end of 2008.            
Australia Sands                                                                 
With the dredge mining operations proceeding through a lower grade area of the  
mine during 2008, production of heavy mineral concentrate (HMC) was lower than  
that of the corresponding period in 2007. As a result of the restricted HMC     
supply, mineral production is also lower. Initiatives to improve recoveries of  
both zircon and rutile have partially assisted in countering the impact of the  
lower HMC production.                                                           
Synthetic rutile (SR) production was higher in the period under review following
the SR kiln shut in the first half of 2007. The benefits of that shut have since
been realised with stable operating conditions being experienced which in turn  
have yielded an increase in production.                                         
Pigment production was lower in the period under review due to plant downtime   
associated with the rebuild of all four chlorinators at the Kwinana pigment     
plant and an interruption in gas supply during the first quarter of 2008.       
Various initiatives currently underway should result in an improvement of       
production in the second half of 2008.                                          
Substantial price increases in process chemicals and energy consumables, as well
as a regional gas supply crisis which resulted in higher gas prices, offset     
somewhat by slightly higher pigment prices, resulted in net operating profit    
declining significantly from a profit of R36 million in the previous comparative
period to a loss of R139 million. In addition, the strength of the Australian   
dollar against the US dollar continues to negatively impact on the profitability
of the business. This was partially offset by currency hedging gains of A$2,6   
million (R17,6 million) during the period under review. Currency hedging of     
US$40 million at an average rate of US cents 94 to the Australian dollar is in  
place for the remainder of 2008.                                                
Base Metals                                                                     
Production of zinc concentrate at the Rosh Pinah mine was 47kt, 11% lower than  
the comparative period in 2007. The lower production volumes were mainly the    
result of plant stoppages and instability due to equipment failures at the      
crushing and flotation circuits of the plant. A capital replacement programme   
for the flotation circuit is planned for early 2009 while that for the crushing 
circuit is planned for completion during the second half of 2008.               
Production of zinc metal at the Zincor refinery was 47kt, 8% lower than the     
comparative period in 2007. This was as a direct result of electricity load     
shedding and power rationing that also led to instability in plant operating    
conditions. The group expects that zinc production in the second half of 2008   
will continue to be affected by power rationing as well as the planned rebuild  
of the two smaller roasters and major maintenance at the cell house. Zinc metal 
sales were 10% higher when compared to the previous period in 2007 due to good  
local demand.                                                                   
Revenue for the six months to 30 June 2008 decreased some 25% mainly as a result
of lower zinc prices. The average zinc price realised for the period under      
review was US$2 272 per tonne, approximately 36% lower than the price recorded  
in the previous comparative period in 2007.                                     
Net operating profit declined significantly as a result of lower revenue coupled
with higher operating cost. The cost increases were driven by higher than       
inflation increases in electricity, fuel and labour as well as higher           
maintenance costs. Zinc metal inventories were written down to net realisable   
value by R45 million for the period under review.                               
Production at the Chifeng refinery in which the group owns an effective 22%     
interest has been fully ramped up to beyond its name plate capacity of 110ktpa. 
Equity accounted income increased by R11 million to R18 million compared to the 
corresponding period in 2007 due to additional production and sales volumes.    
The divestment of a 43% interest in Rosh Pinah Zinc Corporation (Pty) Limited   
(RPZC) to Namibian shareholder groupings, reducing the group`s shareholding to  
an effective 50,04% from 1 July 2008, was completed in June 2008.               
In terms of the transaction, RPZC declared a dividend of R435 million of which  
R405 million is payable to the group. Shareholders` loans of R80 million were   
extended to Rosh Pinah of which Exxaro provided R75 million.                    
As part of the transaction, an employee empowerment participation scheme        
entitling eligible employees to share in 3% of RPZC`s future dividend payments, 
has been created.                                                               
At 30 June 2008, a total of 12kt representing 40% of Rosh Pinah`s projected lead
sales and 63kt representing 47% of the projected zinc sales, were hedged.       
Subsequent to the end of the period the hedging programme to accommodate the    
stand alone bank funding, was completed. A total of 20,1kt of lead sales are    
hedged forward until 2011 at an average price per tonne of US$1 756 and 93kt of 
zinc sales at an average price per tonne of US$2 187.                           
GROWTH OPPORTUNITIES                                                            
Coal                                                                            
In July 2008 Eskom and the coal business reached agreement on the supply for 45 
years of 14,6Mtpa of power station coal from Grootegeluk mine to Eskom`s        
adjacent Medupi power station which is currently under construction. This       
agreement is inclusive of the 8,5Mtpa of power station coal to the Medupi power 
station which was agreed to in March 2007. The agreement is subject to the final
approval by the Eskom board. Exxaro board approval for the coal supply agreement
and the implementation of the project to expand the Grootegeluk mine at a       
capital cost of R9 billion, was given on 12 August 2008.                        
Construction of the Sintel char plant at the Grootegeluk mine for the production
of reductants for the ferroalloy industry at a total capital cost of R389       
million is behind schedule. This is due to delays experienced with the          
construction contractors. Ramp-up of the facility commenced in August 2008 with 
full production of 160ktpa estimated to be reached in the first half of 2009.   
A feasibility study to investigate the viability of producing high quality      
market coke from semi-soft coking coal produced at Grootegeluk mine is          
progressing well with first results expected by the end of 2008.                
Commissioning of the beneficiation plant at the R290 million Inyanda mine was   
successfully completed in the second quarter of 2008. It is expected that full  
production of up to 1,5Mtpa of product mostly for the export market, will be    
achieved by the end of 2008.                                                    
Commissioning of the Mafube expansion project at a capital cost of R1,9 billion 
in which the group is a 50:50 joint venture partner with Anglo Coal, has been   
completed and ramp-up to full capacity is expected to be reached by the end of  
2008. At full production the mine will produce 3Mtpa of export steam coal and   
2Mtpa of power station coal.                                                    
All mining authorisations and regulatory approvals for mining of the            
Eerstelingsfontein reserves near Belfast to supply 1Mtpa of product to the local
market have been obtained. Production is planned to commence in the third       
quarter of 2008, with full production expected by the first quarter of 2009.    
Exploration of the hard coking coal resource on the adjacent properties of      
Moranbah South and Grosvenor South in Queensland, Australia, continues to       
progress according to schedule. Exploration is mainly focused on geophysical    
work to delineate long-wall mining resources although the potential for other   
mining methods has not been excluded. Moranbah South has the potential to       
produce large volumes of premium quality hard coking coal.                      
Implementation of the development of the Diepspruit reserve at New Clydesdale   
(NCC) has commenced with the aim to produce its first coal by the end of 2008.  
The R136 million project will produce 1,3Mtpa run of mine coal for beneficiation
at NCC for supply to the export steam coal market.                              
As part of the group`s long-term strategy to leverage the strategic advantage   
that it enjoys in the Waterberg coal field, exploration programmes have been put
in place and discussions continue with potential high volume long term off-     
takers of coal.                                                                 
Several on-site power generation projects are being investigated.               
Mineral Sands                                                                   
The Toliara Sands project`s feasibility study for the Ranobe deposit in south-  
western Madagascar is progressing. Further process and metallurgical test work  
is being undertaken on the ilmenite product from this deposit. An aerial        
radiometric and a magnetic survey is planned for the northern Monombo-Marombe   
area.                                                                           
Implementation of the Tiwest Kwinana pigment plant expansion project for an     
additional 40ktpa production has been approved by the board and will be         
completed by 2010. The group will fund 100% of the A$100 million expansion      
project. Tronox Inc., the group`s Tiwest joint venture partner has the option to
contribute its share of the capital at its discretion throughout the project    
until a date two years from commissioning of the expansion.                     
The Dongara feasibility study which forms part of the Tiwest joint venture is in
process and will be completed during 2009. As a result of the increased life    
expectancy of the Tiwest current dry mine operation at Cooljarloo, production at
Dongara is planned to commence in 2011. The Dongara deposit has the potential to
provide feedstock for the Tiwest mineral separation plant for six years. Further
exploration at Cooljarloo West has also been approved by the joint venture      
partners.                                                                       
Construction of the Fairbreeze mine south of the existing Hillendale mine in    
KwaZulu-Natal, can commence on approval of the mining right. Current estimates  
for production start-up is for late 2010. The feasibility study of the Port     
Durnford deposit located to the south-west of the current Hillendale operations 
will be completed in 2009. This mine could supply the KZN furnaces for longer   
than 20 years, if proven viable.                                                
A drilling campaign to confirm previous drill results at the Centane deposit in 
the Eastern Cape is currently underway.                                         
Base Metals                                                                     
An investment was made in exploration assets in Turkey. The exploration area    
includes zinc, lead, copper and iron ore prospects. A total of R56 million was  
expensed for the period on acquisition and exploration costs. The acquisition   
cost of the investment was allocated to intangible assets (exploration rights)  
and subsequently expensed as the exploration activities are still in the early  
stages.                                                                         
The feasibility study to expand the Chifeng refinery by a further 100ktpa was   
completed during the six months to June 2008. The group reviewed the prospect   
and concluded that the planned expansion does not meet its investment criteria  
culminating in a decision not to participate in the expansion project.          
AlloyStream                                                                     
The completion of the pre-feasibility study for Furnace 1, which is designed to 
demonstrate the technology on commercial ferromanganese production, has been    
delayed from its scheduled completion in the second half of 2008 as a result of 
the power shortages in South Africa. The project will have to be relocated to a 
site where sufficient power is available and supply guaranteed. The Coega       
Industrial Development Zone is a potential alternative location that is         
currently under investigation.                                                  
ACQUISITION OF NAMAKWA SANDS AND BLACK MOUNTAIN                                 
The conversion applications for Namakwa Sands, Black Mountain and Gamsberg were 
approved after the reporting period based on submissions by Anglo American to   
the Department of Minerals and Energy (DME).                                    
The group will acquire a 26% interest in Black Mountain/Gamsberg and assume     
operational control of Namakwa Sands on completion of the registration and      
cession of the mining rights.                                                   
CONVERSION OF MINING RIGHTS                                                     
Conversion of the group`s former Kumba Resources old order mining rights was    
granted subsequent to the end of the reporting period enabling the group to     
process the registration of the rights.                                         
Regular engagement with the DME takes place to ensure the approval of the       
applications for conversion of the former Eyesizwe old order mining rights which
were submitted to the DME in June 2008 as well as the approval of applications  
for new order mining rights for a number of mineral sands and coal deposits.    
CHANGES TO THE BOARD                                                            
Mrs PKV Ncetezo resigned from the board with effect from 30 April 2008. The     
board wishes to thank her for her services as a director and member of the      
Transformation Remuneration Human Resources and Nominations committee of the    
board.                                                                          
Mr MJ Kilbride will retire as chief operating officer and executive director on 
31 August 2008. The board expresses its appreciation for his contribution to the
group.                                                                          
The board welcomes Ms SEA Mngomezulu, nominated by Basadi ba Kopane Investments 
(Pty) Limited of the empowerment women`s group consortium, who has been         
appointed to the board as non-executive director subsequent to the end of the   
reporting period.                                                               
The board is also pleased to announce that Mr J van Rooyen has been appointed as
an independent non-executive director and member of the Audit, Risk and         
Compliance committee on 13 August 2008.                                         
OUTLOOK                                                                         
The group will benefit from higher coal volumes to leverage off the current     
buoyant coal prices. Improved mineral sands price prospects are expected to be  
offset by a continued strong Australian dollar and the impact of the rebuild of 
Furnace 2 at KZN Sands. Operating results from the base metals business are not 
expected to improve in the second half of 2008 due to lower zinc prices.        
Significant increases in labour, fuel and electricity costs will continue to    
have an adverse effect on the operating results of the businesses under the     
group`s management. Nevertheless, the group should deliver significantly        
improved earnings in the second half of 2008 mainly due to the favourable coal  
and iron ore market conditions. A strengthening rand will negatively impact on  
US dollar denominated income.                                                   
INTERIM DIVIDEND                                                                
The directors have declared an interim dividend number 11 of 175 cents per share
in respect of the 2008 interim period. The dividend has been declared in South  
African currency and is payable to shareholders recorded in the records of the  
company at close of business on Friday, 19 September 2008.                      
In compliance with the electronic statement system of JSE Limited, the following
dates are applicable:                                                           
Last date to trade cum dividend         Friday, 12 September 2008               
Shares trade ex dividend                Monday, 15 September 2008               
Record date                             Friday, 19 September 2008               
Payment date                            Monday, 22 September 2008               
Share certificates may not be dematerialised or rematerialised between 15       
September 2008 and 19 September 2008 both days inclusive.                       
On Monday, 22 September 2008 the interim dividend will be electronically        
transferred to the bank accounts of all certificated shareholders where this    
facility is available. Where electronic fund transfer is not available or       
desired, cheques dated 22 September 2008 will be posted on that date.           
Shareholders who have dematerialised their share certificates will have their   
accounts at their CSDP or broker credited on Monday, 22 September 2008.         
On behalf of the board                                                          
SA Nkosi                                                                        
(Chief Executive Officer)                                                       
DJ van Staden                                                                   
(Chief Financial Officer)                                                       
13 August 2008                                                                  
REGISTERED OFFICE                 TRANSFER SECRETARIES                          
Exxaro Resources Limited          Computershare Investor Services               
Roger Dyason Road                 (Pty) Limited                                 
Pretoria West, 0183               Ground Floor, 70 Marshall Street              
Johannesburg, 2001                             
                                 PO Box 61051, Marshalltown, 2107               
Tel no: +27 12 307 5000                                                         
Fax no: +27 12 307 4080                                                         
DIRECTORS: SA Nkosi (Chief Executive Officer)*, PM Baum,                        
JJ Geldenhuys, U Khumalo, MJ Kilbride*, Dr D Konar,                             
SEA Mngomezulu, VZ Mntambo, RP Mohring, NL Sowazi, J van Rooyen,                
DJ van Staden*, D Zihlangu                                                      

*Executive                                                                      
                                                                                
COMPANY SECRETARY: MS Viljoen                                                   

CORPORATE AFFAIRS AND STRATEGY:                                                 
Trevor Arran (+27 12 307 3292)                                                  
Sponsor:                                                                        
JP Morgan (+27 11 507 0300)?                                                    
Date: 14/08/2008 07:05:16 Supplied by www.sharenet.co.za                     
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