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EXX - Exxaro Resources - Reviewed group interim financial results, unaudited

Release Date: 20/08/2009 07:05:08      Code(s): EXX
EXX - Exxaro Resources - Reviewed group interim financial results, unaudited    
physical information for the six-month period ended 30 June 2009 and interim    
dividend declaration                                                            
Exxaro Resources Limited                                                        
(Incorporated in the Republic of South Africa)                                  
Registration number: 2000/011076/06?                                            
JSE share code: EXX?                                                            
ISIN: ZAE000084992?                                                             
ADR code: EXXAY                                                                 
("Exxaro" or "the company" or "the group")                                      
Reviewed group interim financial results, unaudited physical                    
information for the six-month period ended 30 June 2009 and interim dividend    
Revenue increased by 23% to R7,1 billion                                        
Net operating profit up 18% to R953 million                                     
Headline earnings per share up 8% to 406 cents per share                        
Interim dividend of 100 cents per share                                         
Condensed group income statement                                                
                                          6 months   6 months   12 months       
ended      ended      ended            
                                         30 June    30 June    31 Dec           
                                         2009       2008       2008             
                                         Reviewed   Reviewed   Audited          
Rm         Rm         Rm               
Revenue                                    7 111      5 782      13 843         
Operating expenses                         (6 158)    (4 976)    (11 376)       
Net operating profit                       953        806        2 467          
Net financing costs (note 4)               (242)      (87)       (241)          
Share of income from investments and       886        753        1 665          
equity-accounted investments                                                    
Profit before tax (note 2)                 1 597      1 472      3 891          
Income tax expense                         (214)      (226)      (510)          
Profit for the period                      1 383      1 246      3 381          
Profit attributable to:                                                         
Owners of the parent                       1 390      1 244      3 405          
Non-controlling interests                  (7)        2          (24)           
Profit for the period                      1 383      1 246      3 381          
Group statement of comprehensive income                                         
                                          6 months   6 months   12 months       
ended      ended      ended            
                                         30 June    30 June    31 Dec           
                                         2009       2008       2008             
                                         Reviewed   Reviewed   Audited          
Rm         Rm         Rm               
Profit for the period                      1 383      1 246       3 381         
Other comprehensive income:                                                     
Exchange differences on translating        (183)      582        193            
foreign operations                                                              
Cash flow hedges                           (110)      143        520            
Share of comprehensive income of           (36)       42         187            
Share-based payment movement               60         62         92             
Income tax relating to components of other 78         (64)       (115)          
comprehensive income                                                            
Net (loss)/gain recognised in other        (191)      765        877            
comprehensive income                                                            
Total comprehensive income for the period  1 192      2 011      4 258          
Total comprehensive income attributable                                         
Owners of the parent                       1 258      2 005      4 117          
Non-controlling interests                  (66)       6          141            
Total comprehensive income for the period  1 192      2 011      4 258          
Ordinary shares (million)                                                       
- in issue                                 356        354        355            
- weighted average number of shares        345        343        343            
- diluted weighted average number of       361        359        361            
Attributable earnings per share (cents)                                         
- basic                                    403        363        993            
- diluted                                  385        347        943            
Condensed group statement of financial position                                 
At 30 June  At 30 June  At 31 Dec       
                                       2009        2008        2008             
                                       Reviewed    Reviewed    Audited          
                                       Rm          Rm          Rm               
Non-current assets                                                              
Property, plant and equipment            12 727      8 655       11 309         
Biological assets                        35          30          34             
Intangible assets                        90          95          79             
Investments in unlisted associates and   1 544       1 231       1 849          
joint ventures (note 5)                                                         
Deferred tax                             1 106       818         1 083          

Other financial assets (note 5)          1 457       1 115       1 577          
                                        16 959      11 944      15 931          
Current assets                                                                  
Inventories                              2 915       1 656       2 481          
Trade and other receivables              2 799       2 088       2 924          
Current tax receivable                   40                      2              
Cash and cash equivalents                2 713       1 664       1 769          
8 467       5 408       7 176           
Non-current assets classified as held    85          2           78             
for sale                                                                        
Total assets                             25 511      17 354      23 185         
EQUITY AND LIABILITIES                                                          
Capital and reserves                                                            
Equity attributable to owners of the     13 575      11 478      12 996         
Non-controlling interests                69          27          128            
Total equity                             13 644      11 505      13 124         
Non-current liabilities                                                         
Interest-bearing borrowings              4 918       1 283       3 650          
Non-current provisions                   1 842       1 442       1 746          
Financial liabilities                    33                      31             
Deferred tax                             1 437       1 204       1 257          
                                        8 230       3 929       6 684           
Current liabilities                                                             
Trade and other payables                 3 244       1 592       2 366          
Interest-bearing borrowings              250         141         500            
Current tax payable                      76          164         440            
Current provisions                       20          23          21             
                                        3 590       1 920       3 327           
Non-current liabilities classified as    47                      50             
held for sale                                                                   
Total equity and liabilities             25 511      17 354      23 185         
Net debt/(cash) (note 6)                 2 455       (240)       2 381          
Net asset value per share (cents)        3 814       3 242       3 661          
Capital expenditure                                                             
- incurred                               686         465         1 617          
- contracted                             393         418         433            
- authorised but not contracted          1 933       1 036       2 711          
- share of associates` and joint         584         297         456            
ventures` contracted capital                                                    
commitments not included above                                                  
Capital expenditure contracted relating  568         477         70             
to captive mines Tshikondeni, Arnot and                                         
Matla, which will be financed by                                                
ArcelorMittal SA Limited and Eskom                                              
Commitment relating to the acquisition               2 353                      
of Namakwa Sands and a 26% interest in                                          
Black Mountain Mining (Pty) Limited from                                        
Anglo Operations Limited, subject to                                            
price adjustments                                                               
Contingent liabilities (note 7)          633         496         587            
Contingent assets (note 8)               293         216         192            
Operating lease commitments              97          90          77             
Reconciliation of headline earnings                                             
Gross       Tax and     Net             
                                       Rm          non-        Rm               
6 months ended 30 June 2009 (reviewed)                                          
Profit attributable to owners of the                             1 390          
Adjusted for:                                                                   
- IAS 16: Gains or losses on disposal of 18          (6)         12             
property, plant and equipment                                                   
- IAS 28: Share of associates` IAS 16 -  (4)         1           (3)            
Gains or losses on disposal of property,                                        
plant and equipment                                                             
Headline earnings                        14          (5)         1 399          
6 months ended 30 June 2008 (reviewed)                                          
Profit attributable to owners of the                             1 244          
Adjusted for:                                                                   
- IAS 16: Impairment of property, plant  7                       7              
and equipment                                                                   
- IAS 16: Reversal of impairment of      (1)                     (1)            
property, plant and equipment                                                   
- IAS 16: Gains or losses on disposal    58          (16)        42             
of property, plant and equipment                                                
Headline earnings                        64          (16)        1 292          
Year ended 31 December 2008 (audited)                                           
Profit attributable to owners of the                             3 405          
Adjusted for:                                                                   
- IAS 16: Impairment of property, plant  21                      21             
and equipment                                                                   
- IAS 16: Gains or losses on disposal of 66          (20)        46             
property, plant and equipment                                                   
- IAS 16: Reversal of impairment of      (1)                     (1)            
property, plant and equipment                                                   
- IAS 27: Gains on disposal of           (7)                     (7)            
- IAS 28: Share of associates` IAS 16 -  2           (1)         1              
Gains or losses on disposal of property,                                        
plant and equipment                                                             
- IAS 28: Share of associates` IAS 39 -  4                       4              
Recycling of re-measurements  from                                              
equity to the income statement,                                                 
including a hedge of net investment in a                                        
foreign entity but excluding cash flow                                          
- IAS 28: Share of associates` IAS 16 -  161                     161            
Impairment of property, plant and                                               
Headline earnings                        246         (21)        3 630          
6 months    6 months    12 months       
                                       ended       ended       ended            
                                       30 June     30 June     31 Dec           
                                       2009        2008        2008             
Reviewed    Reviewed    Audited          
Headline earnings per share (cents)                                             
- basic                                  406         377         1 058          
- diluted                                388         360         1 006          
Condensed group statement of cash flows                                         
                                        6 months    6 months    12 months       
                                       ended       ended       ended            
                                       30 June     30 June     31 Dec           
2009        2008        2008             
                                       Reviewed    Reviewed    Audited          
                                       Rm          Rm          Rm               
Cash retained from operations            832         1 523       3 574          
- net financing costs                    (192)       (45)        (193)          
- tax paid                               (488)       (216)       (487)          
- dividends paid                         (700)       (348)       (984)          
Cash flows from investing activities                                            
- capital expenditure                    (686)       (465)       (1 617)        
- proceeds from disposal of property,    4           3           29             
plant and equipment                                                             
- investments acquired                   (50)        (69)        (179)          
- associate acquired                                             (221)          
- acquisition of subsidiaries and other              (30)        (2 757)        
business operations                                                             
- dividends from investments and equity- 1 124        352        1 044          
accounted investments                                                           
- other                                  (123)       86          (55)           
Net cash (outflow)/inflow                (279)       791         (1 846)        
Net cash flow from financing activities                                         
- shares issued                          20          17          31             
- increase in non-controlling interests` 8           1                          
- net borrowings raised                  1 195       5           2 734          
Net increase in cash and cash            944         814         919            
Cash and cash equivalents at beginning   1 769       850         850            
of period                                                                       
Cash and cash equivalents end of period  2 713       1 664       1 769          
Group statement of changes in equity                                            
                                        Other components of equity              
                      Share    Share    Foreign       Financial    Equity-      
capital  premium  currency      instruments  settled       
                     Rm       Rm       translations  revaluation  reserve       
                                     Rm            Rm           Rm              
Balance at 31 December 4        2 063    527           7            968         
Total comprehensive                       573           106          74         
Issue of share                  17                                              
interests additional                                                            
Dividends paid                                                                  
Balance at 30 June     4        2 080    1 100         113          1 042       
Total comprehensive                      (136)         32           39          
Issue of share                  14                                              
Liquidation dividend                                                            
from subsidiary                                                                 
Net profit on dilution                                                          
of interest in a                                                                
Dividends paid                                                                  
Balance at 31 December 4        2 094    964           145          1 081       
Total comprehensive                      (196)         (8)          72          
Issue of share                  21                                              
interests contribution                                                          
Dividends paid                                                                  
Balance at 30 June     4        2 115    768           137          1 153       
Dividend paid per      375                                                      
share (cents) in                                                                
respect of the                                                                  
previous financial                                                              
Dividend paid per      100                                                      
share (cents) in                                                                
respect of this                                                                 
interim period(2)                                                               
(1)?Issued to the Kumba Resources Management Share Trust due to options         
(2)?The STC on these dividends will amount to Rnil after taking into            
account STC credits.                                                            
Group statement of changes in equity                                            
                             Retained  Attributable   Non-        Total         
                            income    to owners of   controlling equity         
Rm        the parent     interests   Rm             
                                     Rm             Rm                          
Balance at 31 December 2007   6 235     9 804          19          9 823        
Total comprehensive income    1 252     2 005          6           2 011        
Issue of share capital(1)               17                         17           
Non-controlling interests                              2           2            
additional contributions                                                        
Dividends paid                (348)     (348)                      (348)        
Balance at 30 June 2008       7 139     11 478         27          11 505       
Total comprehensive income    2 177     2 112          135         2 247        
Issue of share capital(1)               14                         14           
Liquidation dividend from     1         1                          1            
Net profit on dilution of                              (7)         (7)          
interest in a subsidiary                                                        
Dividends paid                (609)     (609)          (27)        (636)        
Balance at 31 December 2008   8 708     12 996         128         13 124       
Total comprehensive income    1 390     1 258          (66)        1 192        
Issue of share capital(1)               21                         21           
Non-controlling interests                              7           7            
Dividends paid                (700)     (700)                      (700)        
Balance at 30 June 2009       9 398     13 575         69          13 644       
Dividend paid per share                                                         
(cents) in respect of the                                                       
previous financial year                                                         
Dividend paid per share                                                         
(cents) in respect of this                                                      
interim period(2)                                                               
(1)?Issued to the Kumba Resources Management Share Trust due to                 
options exercised.                                                              
(2)?The STC on these dividends will amount to Rnil 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 (IAS) 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 were               
early adopted in 2008.                                                        
  This condensed interim report complies with IAS 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 2008. During              
  2009 the following accounting pronouncements became effective:                
  Amended IFRS 2 Share-based Payments, Revised IAS 23 Borrowing                 
  Costs, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements              
for the Constructions of Real Estate, IFRIC 16 Hedges of Net                  
  Investments in a Foreign Operation, Improvements to Financial                 
  Reporting Standards 2008 (amendments to 35 various standards).                
  These pronouncements had no material impact on the accounting of              
transactions or the disclosure thereof.                                       
                                         6 months   6 months    12 months       
                                       ended      ended       ended             
                                       30 June    30 June     31 Dec            
2009       2008        2008              
                                       Reviewed   Reviewed    Audited           
                                       Rm         Rm          Rm                
2.  Profit before tax is arrived at                                             
after including:                                                             
   Depreciation, and amortisation of     (531)      (415)       (898)           
  intangible assets                                                             
   Financing costs                       (328)      (141)       (394)           
Interest received                     86         54          153             
   Net realised foreign currency         (434)      107         476             
  exchange (losses)/gains                                                       
   Net unrealised foreign exchange       (76)       (17)        39              
   Derivative instruments held for       335        25          (69)            
  trading gains/(losses)                                                        
   Fair value adjustment on financial    11         (7)         (26)            
instruments gains/(losses)                                                    
   Impairment charges (note 3)                      (6)         (20)            
   Net surplus on disposal of                                   7               
Net deficit on disposal of property,  (22)       (58)        (66)            
  plant and equipment                                                           
3.  Impairment charges                                                          
   Impairment of property, plant and                (7)         (21)            
   Reversal of impairment of property,              1           1               
  plant and equipment                                                           
   Total impairments before and after               (6)         (20)            
4.  Net financing costs                                                         
   Interest expense and loan costs       245        67          283             
   Finance leases                        33         31          63              
Interest income                       (86)       (54)        (153)           
   Net interest expense                  192        44          193             
   Interest adjustment on non-current    50         43          48              
Net financing cost as per income      242        87          241             
5.  Investments                                                                 
   Unlisted investments in associates                                           
- directors` valuation                14,001     14,338      13,162          
   Unlisted investments included in                                             
  other financial assets                                                        
   - directors` valuation                413        360         387             
6.  Net debt/cash                                                               
   Net debt/cash is calculated as being interest-bearing borrowings             
  less cash and cash equivalents.                                               
7.  Contingent liabilities                                                      
Include 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 and 2009 is mainly attributable to guarantees to the                  
Department of Minerals and Energy in respect of environmental                 
  liabilities on immediate closure of mining operations.                        
8.  Contingent assets                                                           
   An outstanding insurance claim of R237 million 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 2009.                  
  A surrender fee of R56 million in exchange for the exclusive right            
  to prospect, explore, investigate and mine for coal within a                  
designated area in central Queensland and Moranbah, Australia,                
  conditional on the grant of a mining lease.                                   
9.  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              
10. JSE Limited Listings Requirements                                           
   The interim announcement has been prepared in accordance with the            
  JSE Limited Listings Requirements.                                            
11. 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.                                                         
12. 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            
                                       2009       2008        2008              
- Power station                          18 583     18 118      36 700          
??* Tied operations(1)                   8 704      8 962       18 095          
??* Commercial operations                9 879      9 156       18 605          
- Coking                                 922        1 370       2 560           
??* Tied operations                      129        171         327             
??* Commercial operations                793        1 199       2 233           
- Other                                  3 061      2 427       5 574           
Total                                    22 566     21 915      44 834          
- Eskom                                  18 494     17 880      36 255          
??* Tied operations                      8 700      8 942       18 054          
??* Commercial operations                9 794      8 938       18 201          
- Other domestic                         1 920      2 607       5 481           
??* Tied operations                      130        200         352             
??* Commercial operations                1 790      2 407       5 129           
- Export(2)                              2 389      1 284       3 276           
Total                                    22 803     21 771      45 012          
KZN Sands                                                                       
- Ilmenite                               185        133         229             
- Zircon                                 18         16          34              
- Rutile                                 10         7           19              
- Pig iron                               54         29          50              
- Scrap pig iron                         7          8           16              
- Chloride slag                          51         56          95              
- Sulphate slag                          9          10          18              
- Ilmenite                                          20          40              
- Zircon                                 4          22          36              
- Rutile                                 3          7           14              
- Pig iron                               17         39          64              
- Scrap pig iron                         4          6           7               
- Chloride slag                          30         49          101             
- Sulphate slag                          13         6           17              
Namakwa Sands(3)                                                                
- Ilmenite                               141        159         315             
- Zircon                                 64         65          130             
- Rutile                                 15         13          27              
- Pig iron                               41         52          103             
- Scrap pig iron                                    2           6               
- Chloride slag                          53         64          135             
- Sulphate slag                          10         14          24              
- Zircon                                 37         64          135             
- Rutile                                 11         14          27              
- Pig iron                               47         58          82              
- Scrap pig iron                                                1               
- Chloride slag                          37         77          145             
- Sulphate slag                          1          5           26              
Australia Sands(4)                                                              
- Ilmenite                               98         85          174             
- Zircon                                 15         13          29              
- Rutile                                 8          6           13              
- Synthetic rutile                       54         56          113             
- Leucoxene                              7          6           16              
- Pigment                                25         22          43              
- Zircon                                 6          14          35              
- Rutile                                 5          5           14              
- Synthetic rutile                       24         27          62              
- Leucoxene                              1          8           17              
- Pigment                                23         24          44              
Base metals                                                                     
- Zinc concentrate                       53         51          109             
??* Rosh Pinah                           47         47          94              
??* Black Mountain(5)                    6          4           15              
- Zinc metal                             54         60          110             
??* Zincor                               44         47          87              
??* Chifeng(6)                           10         13          23              
- Lead concentrate                       20         18          37              
??* Rosh Pinah                           12         12          20              
??* Black Mountain(5)                    8          6           17              
Zinc metal sales                         58         66          126             
- Domestic                               44         51          93              
- Export                                 14         15          33              
Lead concentrate sales                                                          
- Export                                 6          7           22              
(1)?Tied operations refer to mines that supply their entire production          
to either Eskom or ArcelorMittal SA Limited in terms of contractual             
(2)?Includes steam coal exports from Exxaro`s 50% share of the Mafube           
expansion project.                                                              
(3)?Namakwa Sands has been included from 1 January 2008, for comparable         
(4)?Exxaro Sands Australia`s 50% interest in its Tiwest joint venture           
is disclosed.                                                                   
(5)?Exxaro`s 26% interest in Black Mountain Mining (Pty) Limited has            
been disclosed from 1 January 2008, for comparable purposes.                    
(6)?Exxaro`s effective interest in the Chifeng refinery is disclosed.           
OPERATING RESULTS                                                               
Comments are based on a comparison of the group`s reviewed financial results and
unaudited physical information for the six-month periods ended 30 June 2009 and 
2008 respectively. The earnings reported for the six-month period to 30 June    
2009 includes results from Namakwa Sands and the 26% interest in Black Mountain 
Mining (Pty) Limited (Black Mountain) which were acquired on 1 October 2008 and 
1 November 2008 respectively.                                                   
The coal business reported a 10% increase in net operating profit to R1 032     
million due to higher sales volumes to Eskom and the export market, offset by   
lower international steam coal prices, lower local non-Eskom sales volumes, and 
higher production costs. The base metals business delivered significantly lower 
operating results in line with zinc prices 42% lower than the corresponding     
period in 2008. The mineral sands business reported a consolidated net operating
loss as the loss at KZN Sands, primarily from lower demand, more than offset the
profitable contributions from Namakwa Sands and Australia Sands.                
Revenue increased by 23% to R7 111 million while net operating profit increased 
by R147 million to R953 million, notwithstanding lower profits in the base      
metals business and a further, albeit lower, consolidated loss in the mineral   
sands business. Although the consolidated operating results show an improvement 
when compared with the previous year, the group was adversely affected by the   
vagaries of the current global economic downturn.                               
A weaker average exchange rate of R9,40 to the US dollar was realised on revenue
compared to R7,54 for the corresponding period in 2008, however, the timing of  
the volatility of the local currency to the US dollar on repatriation of foreign
currency proceeds, led to lower realised currency gains than anticipated.       
Unrealised foreign currency losses on the revaluation of monetary items in      
foreign currency resulted from the relative strength of the local currency on 30
June 2009. The weaker Australian dollar to the US dollar, from an average of US 
93 cents in the six-month period to 30 June 2008 to US 71 cents in the period   
under review, together with favourable hedging of US dollar receivables,        
impacted positively on the financial results of the mineral sands operation in  
Attributable earnings, inclusive of Exxaro`s 20% interest in the post-tax       
profits of Sishen Iron Ore Company (Pty) Limited (SIOC) amounting to R868       
million, increased by 12% from R1 244 million to R1 390 million or 403 cents per
Headline earnings were R1 399 million or 406 cents per share. This represents an
8% increase on the comparative 2008 earnings of R1 292 million or 377 cents per 
CASH FLOW                                                                       
Cash retained from operations was R832 million. Taxation payments of R488       
million, the final dividend for the 2008 financial year of R700million and      
capital expenditure payments of R686 million were made. A total of R347 million 
of the capital expenditure was invested in new capacity and R339 million applied
to sustaining and environmental capital.                                        
A net cash outflow of R279 million was recorded after accounting for            
R1124million dividend receipts from associate companies.                        
Net debt of R2 381 million at 31 December 2008 increased to R2 455 million at 30
June 2009 at a debt to equity ratio of 18%, and includes the R2662million and   
R221 million paid for Namakwa Sands and a 26% interest in Black Mountain in the 
latter half of 2008 respectively.                                               
Subsequent to the interim date, Exxaro paid R1 032 million for its investment in
the Mafube joint venture with Anglo Coal.                                       
The significant reduction in cash retention and net cash outflow position       
compared with the corresponding period in 2008, can partly be ascribed to higher
inventory holding as demand decreased while customers were destocking during the
global recessionary environment.                                                
SAFETY, HEALTH AND ENVIRONMENT                                                  
Safety and health of all employees continues to be an overriding priority for   
Exxaro. Regrettably a non-reportable fatality occurred in a public road accident
in June 2009. The average lost time injury frequency rate (LTIFR) per 200 000   
man-hours worked improved significantly to 0,30 from the previous year`s 0,45 in
the first half of 2008 and the 0,39 for the full year of 2008.                  
Further safety improvements were identified during the CEO Safety Summit held in
March 2009 and are being focused on for feedback on progress at the next summit 
planned for October 2009.                                                       
The reviewed HIV/Aids strategy which focuses on improved employee understanding 
of preventative behaviour as well as voluntary counselling and testing (VCT)    
participation, has increased VCT participation since inception of the HIV/Aids  
Ten business units are now ISO 14001 and OHSAS 18001 certified. The remaining   
five business units have programmes in place to be certified by the end of 2009.
REPORTED SEGMENT RESULTS                                                        
Reported segments are based on the group`s different products and operations as 
well as the physical location of these operations and associated products.      
                                     Reviewed 6 months       Audited            
ended 30 June           12 months           
                                                           31 December          
                                     2009         2008        2008              
Rm           Rm          Rm                 
Coal                                  4 797        3 597       9 040            
?Tied operations                      1 276        1 106       2 492            
?Commercial operations                3 521        2 491       6 548            
Mineral Sands                         1 550        1 035       2 776            
?KZN Sands                            273          460         974              
?Namakwa Sands                        644                      491              
?Australia Sands                      633          575         1 311            
Base Metals                           674          1 063       1 829            
?Rosh Pinah                           206          244         436              
?Zincor                               630          1 032       1 733            
?Inter-segmental                      (162)        (213)       (340)            
Other                                 90           87          198              
Total - external revenue              7 111        5 782       13 843           
Segment net operating profit/(loss)                                             
Coal                                  1 032        935         2 654            
?Tied operations                      71           72          83               
?Commercial operations                961          863         2 571            
Mineral Sands                         (67)         (166)       104              
?KZN Sands                            (110)        (27)        31               
?Namakwa Sands                        24                       155              
?Australia Sands                      19           (139)       (82)             
Base Metals                           9            89          (172)            
?Rosh Pinah                           35           57          (14)             
?Zincor                               3            69          (95)             
?Inter-segmental and other            (29)         (37)        (63)             
Other                                 (21)         (52)        (119)            
Total                                 953          806         2 467            
Total production of power station coal was 465kt higher than the corresponding  
period last year. Higher demand from Eskom resulted in increased production from
the Grootegeluk and Leeuwpan operations while NBC started mining new reserves   
which yielded increased product volumes of 392kt.                               
The Eskom tied collieries recorded lower net production volumes mainly due to   
802kt lower production volumes from Matla resulting from water ingress from     
surface cracks after seasonal rains as well as other production challenges.     
Higher production from Arnot of 544kt was achieved due to the benefits realised 
from the production optimisation project implemented during March 2008, which is
now fully operational.                                                          
Lower coking coal production for the six months ended 30 June 2009 of 448kt was 
due mainly to a management decision to cut back on coking coal production at    
Grootegeluk due to lower demand. Lower coking coal production at Tshikondeni    
mine was caused by continued difficult geological conditions in the area being  
Production of steam coal was 26% higher with the Inyanda mine now fully         
operational. The joint venture agreement with Anglo Coal for the Mafube mine was
signed with an effective date of 1 June 2009 and resulted in additional steam   
coal production of 106kt. Higher production results from NBC from the mining of 
additional reserves were offset by lower production from Leeuwpan and           
Grootegeluk due to lower market demand in current market conditions, as well as 
lower coal production from NCC with lower yields achieved on different sources  
of run-of-mine tonnages treated through the beneficiation plant.                
Sales to Eskom increased based on higher demand. However, lower non-Eskom sales 
to domestic customers resulted from lower demand in the current market          
conditions albeit at higher negotiated prices.                                  
Export sales volumes increased substantially from a fully ramped-up Inyanda mine
and additional export coal from Mafube, however, was recorded at lower          
international steam coal prices and a weaker local currency.                    
As a result revenue increased by 33% to R4 797 million.                         
Net operating income for the six months ended 30 June 2009 increased by 10% at  
an operating margin of 22%. The operating margin decreased from the 26% in the  
previous period due to increased labour and contractor costs after the          
implementation of a seven-day work week at Grootegeluk mine, increased mining   
cost at Leeuwpan mine from the high stripping ratios due to the area mined      
during the period, higher coal buy-in prices for NCC and for Mafube export coal,
and higher railage tariffs for coal destined for export.                        
Mineral Sands                                                                   
KZN Sands                                                                       
KZN Sands reported increased production for the six months to 30 June 2009. Both
furnaces were fully operational for the entire period under review, as opposed  
to the same period in 2008, when furnace 2 was down after damage by a water     
ingress incident at the end of February 2008. In excess of 100kt of slag was    
tapped in the six months, the best production from the furnaces since inception.
Low manganese pig iron (LMPI) production was also higher resulting from the     
increased slag throughput, while zircon and rutile production were both higher  
than the comparative period due to higher grade recoveries.                     
Stability in the furnaces is impacting positively on production from the KZN    
Sands business.                                                                 
Revenue was, however, R187 million lower and a net operating loss of R110million
compared to a loss of R27 million in 2008 was reported attributable to lower    
demand as a result of the global economic slow down, lower LMPI prices and      
unrealised foreign currency revaluation losses in this reporting period.        
Namakwa Sands                                                                   
Slag and iron production was adversely affected by the furnace 1 water ingress  
incident towards the end of March 2009 and the subsequent decision to delay the 
reline to March 2010 as a result of market conditions.                          
The global economic crisis had a major impact on the markets for Namakwa Sands` 
products in the first half of 2009. Demand dropped sharply across all sectors as
customers and end-users focused on reducing inventories and cutting back on new 
Namakwa Sands` revenue for the reporting period was R644 million with a net     
operating profit of R24 million. The net operating profit was severely affected 
by the sudden decline in sales volumes towards the latter part of the first     
quarter. This downward trend was softened by significantly better sales tonnage 
of zircon, chloride slag and pig iron in the second quarter.                    
The positive impact of a weaker local currency to the US dollar on revenue      
recorded was reduced by foreign currency losses on repatriation of foreign      
currency proceeds due to the timing of the volatility on the relative exchange  
Subsequent to the acquisition of Namakwa Sands in October 2008, management has  
embarked on an exercise to re-define the mine plan by December 2009.            
Australia Sands                                                                 
Higher grades at the dredge mine led to higher concentrate and therefore higher 
mineral production. Successful improvement initiatives continue to favourably   
impact mineral production.                                                      
Production of synthetic rutile (SR) was slightly lower during the period under  
review as a result of maintenance-related problems occurring during the second  
quarter. These problems have been resolved and performance should improve in the
second half of 2009.                                                            
Pigment production improved substantially following the successful              
implementation of various initiatives and a successful shut in May 2008.        
Although increased maintenance cost was incurred at the SR plant, the           
significant increases in 2008 in the cost of process chemicals and energy       
consumables was not experienced during the period under review.                 
Net operating profit improved from a loss of R139 million in the corresponding  
period in 2008 to a profit of R19 million for the current period, attributed to 
an improved production performance, a weaker average Australian dollar against  
the US dollar and higher sales prices on average, albeit partially offset by    
lower sales volumes as a result of the economic slowdown. Hedging of US dollar  
receivables had a positive impact on operating results. Currency hedging of     
US$22 million at an average rate of US 63 cents to the Australian dollar is in  
place for the remainder of 2009.                                                
Base Metals                                                                     
Production of zinc metal at the Zincor refinery of 44kt was 6% lower. The       
shortfall can be attributed to downtime on the acid plant and throughput        
limitations on the purification circuit. Downtime on the acid plant negatively  
affected the rest of the operation. The challenges with the acid plant have     
since been resolved.                                                            
Zinc metal sales were 17% lower than the equivalent period in 2008 mainly due to
lower demand.                                                                   
Production at Rosh Pinah was in line with 2008 but yielded higher metal content.
The flotation cell replacement project is only marginally behind schedule and is
expected to come into operation late in 2009.                                   
A total of 60% of Rosh Pinah`s projected zinc and lead concentrate sales were   
hedged during the previous financial year for the period July 2008 to December  
2011 at forward prices ranging from US$2 431 to US$1 887 for zinc and US$2 940  
to US$ 900 for lead per tonne as part of the partial divestment to facilitate a 
Namibian empowerment transaction. In the first half of 2009, a portion of the   
hedging programme was ineffective and resulted in losses of R42 million being   
accounted for in profit or loss.                                                
Revenue for the six months to 30 June 2009 decreased by 37% mainly as a result  
of lower zinc prices. The average zinc price for the six months of US$1 329 is  
42% lower than the equivalent period in 2008 and was only partially offset by   
the weaker local currency.                                                      
Net operating profits declined substantially as lower revenues coupled with     
higher operating costs resulted from higher than inflation increases in         
electricity and maintenance expenses as well as higher distribution costs.      
Production at the Chifeng refinery was 23% lower due to low prices and market   
demand. Prices and demand recovered at the end of the second quarter, with a    
positive outlook for annual performance. Exxaro`s proportionate share of the    
post-tax earnings of Chifeng decreased by 89% to R2 million compared to the     
equivalent period in 2008 mainly due to the lower production and high raw       
material prices eroding margins.                                                
Exxaro exercised its option to acquire 26% in Black Mountain during the last    
quarter of 2008. In the current period Exxaro equity accounted R15million as its
share of Black Mountain`s post-tax earnings.                                    
Industrial Minerals                                                             
Production volumes of ferrosilicon at the FerroAlloys plant show a modest       
increase, however, sales volumes were lower as a result of lower market demand. 
The group plans to finalise the proposed divestment of its interest in the Glen 
Douglas dolomite mine during the second half of 2009.                           
CAPITAL EXPENDITURE AND PROJECT PIPELINE                                        
Exxaro has completed the review and prioritisation of its capital expenditure   
and project pipeline subsequent to the global economic downturn. The group will 
focus on the successful implementation of committed expansions and projects     
which meet its investment hurdle rate within a board approved mandate.          
The expansion of the Grootegeluk mine to supply Eskom`s Medupi power station    
with 14,6Mtpa of power station coal for 40 years, is progressing in line with   
the planned schedule to supply the first coal during the last quarter of 2011.  
Full production from 2014 onwards is envisaged. The project, at an estimated    
capital cost of R9 billion, is in the detailed engineering design phase and     
orders will be placed during the next six months for long lead capital items.   
The pre-feasibility study and geological exploration work on a potential        
greenfields mine adjacent to the Grootegeluk mine (Thabametsi mine) with the    
capability of supplying the market with power station and metallurgical coal is 
being progressed with planned completion by the end of 2009. The development is 
aligned with Eskom`s request for proposals for Independent Power Producers for  
base-load power stations.                                                       
An integrated infrastructure plan is being implemented for the Waterberg coal   
fields together with the relevant stakeholders focusing on the supply of        
housing, water, rail and road infrastructure.                                   
Exxaro entered into a prospecting joint venture agreement with Sasol Mining     
(Pty) Limited (Sasol) for the development of a new coal mine in the Waterberg to
supply Sasol`s new potential inland coal-to-liquids project (Project Mafutha).  
The development is in the pre-feasibility stage with the mining of a bulk sample
being planned before the end of 2009 for large-scale testing at the Sasol       
Synfuels Secunda plant.                                                         
Exxaro concluded an option agreement with Coal of Africa Limited which affords  
Exxaro a minority participation right in the Makhado coking coal project in the 
Limpopo province. The exercise of the option is subject to a detailed technical 
and economical due diligence on the project.                                    
Two of the four retorts of the Sintel Char plant at Grootegeluk mine for the    
production of reductants for the ferroalloy industry that had been delayed after
the failure of the refractory lining, have been commissioned with the first char
produced during June 2009. The other two retorts will be commissioned by the end
of October 2009 with full production of 140ktpa of char estimated to be reached 
during 2010. The quality of the product is in line with market expectations and 
the entire production offtake has been secured.                                 
The potential bord-and-pillar mining operation pre-feasibility study of the hard
coking coal resource on the Moranbah South properties in Queensland, Australia, 
has commenced with exploration drilling being prioritised to finalise this study
during the first half of 2010. Exploration work on the potential long-wall      
mining project is also progressing according to plan to confirm that Moranbah   
South can produce premium quality hard coking coal in conjunction with our joint
venture partner Anglo Coal Australia.                                           
Mineral Sands                                                                   
The approval of the mining right for the Fairbreeze C Extension portion of the  
Fairbreeze project, which in the past prevented this project from proceeding,   
was granted. However, in light of prevailing market conditions, the project is  
currently under review.                                                         
The feasibility study of the Port Durnford project, located to the south-west of
Hillendale mine, was completed during the first half of 2009. This mine could   
supply the KZN furnaces for longer than 20 years, however, current economic     
conditions are impacting negatively on the financial viability of the project.  
This project is therefore currently also under review.                          
The development of a mine in Madagascar (Toliara Sands project) will not be     
economically viable due to the deposit size, grades, location and infrastructure
development required. Exxaro does not plan any further exploration in this area 
and is in the process of exiting from the option agreement.                     
The 100% funded Exxaro pigment plant expansion at Kwinana, at an expected cost  
of AU$100 million, remains on track and on budget for commencement in the first 
half of 2010.                                                                   
As a result of the increased life expectancy of Tiwest`s current dry mine       
operation at Cooljarloo, Australia, existing dry mining operations will now only
cease in 2011. A pre-feasibility study of the Dongara mine was completed in     
2008. However, in the current economic circumstances, the project payback period
is insufficient to warrant investment. As an alternative, a pre-feasibility     
study to replace the dry mining capacity with an expansion of the Cooljarloo    
dredge operation is underway and will be completed in the fourth quarter of     
An exploration programme to identify an inferred or indicated resource on the   
Tiwest Cooljarloo West tenements will involve the drilling of 25 000 metres in  
the second half of 2009 to confirm initial exploration results.                 
Base Metals and Ferrous Metals                                                  
The commercialisation of the AlloyStream(TM) technology for the beneficiation of
manganese ore was progressed to pre-feasibility level for a site at Coega.      
Further work on forming strategic alliances is continuing to optimise the       
business case for the development of the manganese project. A successful        
campaign on the beneficiation of nickel ore was also completed. Optimisation    
studies to fast track the development of both the manganese and nickel projects 
are in progress.                                                                
CONVERSION OF MINING RIGHTS                                                     
Engagement with the Department of Minerals and Energy (DME) continued in order  
to process the registration of new order mining rights granted as well as the   
converted old order mining rights of the former Kumba Resources Limited.        
Approval of the conversion of the old order mining rights of the former Eyesizwe
Coal (Pty) Limited submitted to the DME in 2008, is also still in process.      
CHANGES TO THE BOARD                                                            
As previously announced, Mr WA de Klerk replaced Mr DJ van Staden as finance    
director on 1 March 2009.                                                       
Mr CI Griffith was appointed on 16 July 2009 in place of Mr PM Baum who had     
resigned on 15 July 2009. The board expresses its appreciation for MrBaum`s     
significant contribution to the group.                                          
Demand for power station coal should remain similar to that experienced in the  
current reporting period.                                                       
The group expects similar levels of steam coal exports in the second half of    
2009 albeit at lower international prices. However, such performance remains    
dependant on the availability of logistical infrastructure.                     
A significant decline in domestic steam and coking coal prices are anticipated  
in the second half of 2009 due to contractual pricing arrangements.             
Demand for the mineral sands products will continue to be affected by the       
depressed economic environment combined with the additional downside of a       
possible strong Australian dollar to the US dollar in the Australian operations.
Zinc markets are expected to remain depressed with downward pressure on prices  
due to the expected oversupply of metal.                                        
The equity-accounted contribution from SIOC will be impacted by the lower       
benchmark iron ore prices with effect from 1 April 2009.                        
Due to the continued lower economic activity and its impact on demand and       
prices, it is inevitable that earnings for the second half of 2009 will be      
adversely impacted. The relative strength of the local currency, and its        
volatility, will also impact on the results for the second half of 2009.        
The financial information on which the outlook statement is based has not been  
reviewed or reported on by the company`s auditors.                              
INTERIM DIVIDEND                                                                
The board of directors have declared an interim cash dividend number 13 of 100  
cents per share in respect of the 2009 interim period. The dividend has been    
declared in South African currency and is payable to shareholders recorded in   
the register of the company at close of business on Friday, 25September 2009.   
In compliance with the requirements of Strate, the electronic and custody system
used by the JSE, the following dates are applicable:                            
Last date to trade cum dividend   Thursday, 17 September 2009                   
Shares trade ex dividend          Friday, 18 September 2009                     
Record date                       Friday, 25 September 2009                     
Payment date                      Monday, 28 September 2009                     
Share certificates may not be dematerialised or rematerialised during the period
Friday, 18 September 2009 and Friday, 25 September 2009, both days inclusive.   
On Monday, 28 September 2009 the interim cash 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 28 September 2009 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, 28 September 2009.         
On behalf of the board                                                          
SA Nkosi                                                                        
Chief Executive Officer                                                         
WA de Klerk                                                                     
Finance Director                                                                
19 August 2009                                                                  
REGISTERED OFFICE            TRANSFER SECRETARIES                               
Exxaro Resources Limited     Computershare Investor Services (Pty) Limited      
Roger Dyason Road            Ground Floor, 70 Marshall Street                   
Pretoria West, 0183          Johannesburg, 2001                                 
Tel no +27 12 307 5000       PO Box 61051                                       
Fax no +27 12 323 3400       Marshalltown, 2107                                 
DIRECTORS Dr D Konar (Acting Chairman), SA Nkosi (Chief Executive               
Officer)*, WA de Klerk*, JJ Geldenhuys, CI Griffith, U Khumalo,                 
SEAMngomezulu, VZ Mntambo, RP Mohring, NL Sowazi, J van Rooyen, DZihlangu       
COMPANY SECRETARY MS Viljoen                                                    
INVESTOR RELATIONS RA de Beer +27 12 307 4189                                   
If you have any queries regarding your shareholding in Exxaro Resources Limited,
please contact the Transfer Secretaries at +27 11 370 5000.                     
This report is available at: www.exxaro.com                                     
20 August 2009                                                                  
Deutsche Securities (SA) (Pty) Limited                                          
Date: 20/08/2009 07:05:06 Supplied by www.sharenet.co.za                     
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