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EXX - Exxaro Resources Limited - Exxaro plans to cease production of Zinc,

Release Date: 29/07/2011 10:30:01      Code(s): EXX
EXX - Exxaro Resources Limited - Exxaro plans to cease production of Zinc,      
Contemplates Base Metals Retrenchments                                          
EXXARO RESOURCES LIMITED                                                        
(Incorporated in the Republic of South Africa)                                  
Registration Number:  2000/011076/06                                            
JSE share code:  EXX                                                            
ISIN:  ZAE000084992                                                             
ADR code:  EXXAY                                                                
Diversified South African-based resources group Exxaro announced today that the 
board of directors of Exxaro as well as the board of directors of Exxaro Base   
Metals (Pty) Ltd have taken an in-principle decision to permanently cease       
production of zinc at the Zincor refinery in Springs, Gauteng.                  
As a result, the retrenchment of employees at the operation is contemplated, in 
the event that no feasible alternative can be found or there not being          
sufficient suitable vacant positions available for the redeployment of employees
to the rest of the Exxaro Group.                                                
As previously communicated to stakeholders since 2009, Exxaro has, as part of   
its strategic plan, been considering options to optimise its zinc assets with a 
view to ultimately divest from them. The decision was made in context of the    
difficult conditions of the zinc market, including its cyclical nature, low     
margins as well as the significant impact of higher electricity prices and the  
exchange rate.                                                                  
Exxaro`s current portfolio of zinc assets includes the Zincor refinery, a 50,04%
interest in the Rosh Pinah zinc and lead mine, a 26% interest in Black Mountain 
(Pty) Ltd, which owns the Black Mountain zinc and lead mine and the Gamsberg    
zinc project, as well as an effective 22% interest in the Chifeng zinc smelter  
in China.                                                                       
"We have been investigating a range of options to find a suitable buyer for our 
zinc portfolio businesses. We have ideally wanted to sell all the zinc assets to
a single buyer, however, to date we have been unsuccessful in attracting        
investor interest in Zincor," said Sipho Nkosi, Exxaro`s chief executive        
"Issues that have influenced the decision of the board of directors of Exxaro to
take an in-principle decision to permanently cease zinc production at Zincor    
include the fact that Zincor as a zinc-making operation has proved to be un-    
saleable to potential investors; continued zinc-making is financially           
unsustainable with Zincor incurring mounting financial losses; and turn-around  
and improvement interventions have proved fruitless and are unlikely to get     
Zincor on to a sustainable financial performance level," added Nkosi.           
Exxaro has today informed its labour unions of the decision and will start a    
consultation process in accordance with labour legislation and under the        
auspices of the CCMA.                                                           
"We are taking all feasible steps to provide the most suitable options to       
employees and other stakeholders," said Nkosi.                                  
The sale of Exxaro`s shareholding in Rosh Pinah and Chifeng is ongoing and      
Exxaro is in discussions with interested parties. Stakeholders will be kept     
updated at the appropriate time.                                                
For more information, investor and media stakeholders are invited to take part  
in an Exxaro teleconference taking place today (29 July 2011) from 12h00 - 13h00
SA time.                                                                        
To access the teleconference, dial one of the following numbers:                
South Africa - Johannesburg: 011 535 3600 / 011 581 2002                        
South Africa - Cape Town: 021 819 0900                                          
South Africa (Toll-Free): 0 800 200 648                                         
Australia (Toll-Free): 1 800 350 100                                            
UK (Toll-Free): 0 800 917 7042                                                  
USA 1 866 752 6302 (callers to press *0 for Operator)                           
Other Countries (Intl Toll): +27 11 535 3600                                    
A playback will be available for 72 hours. Dial one of the following numbers    
using Code 18301#                                                               
South Africa (Telkom): 011 305 2030                                             
UK (Toll-Free): 0 808 234 6771                                                  
USA: +1 412 317 0088                                                            
Other Countries (Intl Toll): +27 11 305 2030                                    
Editor`s Note:                                                                  
Exxaro is one of the largest South African-based diversified resources groups,  
with interests in the coal, mineral sands, base metals, industrial minerals and 
iron ore commodities. www.exxaro.com                                            
Wim de Klerk                                                                    
Finance director                                                                
Tel: + 27 12 307 4848                                                           
Mobile: +27 82 652 5145                                                         
Email: wim.deklerk@exxaro.com                                                   
29 July 2011                                                                    
Deutsche Securities (SA) (Proprietary) Limited                                  
Date: 29/07/2011 10:30:01 Supplied by www.sharenet.co.za                     
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