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Exx - Exxaro Resources Limited - Audited Group Financial Results And

Release Date: 23/02/2012 07:05:46      Code(s): EXX
EXX - Exxaro Resources Limited - Audited group financial results and            
unaudited physical information for the year ended 31 December 2011              
Exxaro Resources Limited                                                        
Registration Number: 2000/011076/06                                             
JSE Share code: EXX                                                             
ISIN: ZAE000084992                                                              
ADR code: EXXAY                                                                 
("Exxaro" or "the company" or "the group")                                      
Audited group financial results and unaudited physical information for the      
year ended 31 December 2011                                                     
Highlights                                                                      
Lost time injury frequency rate (LTIFR) down 20% to 0,20                        
MPower scheme testimony to meaningful employee empowerment, distributing over   
R1 billion to 9 694 beneficiaries                                               
Revenue increased by 24% to R21,3 billion                                       
Net operating profit up 53% to R4 billion, excluding the impact of impairment   
reversals and charges                                                           
Headline earnings per share up 40% to 2 098 cents per share                     
Final dividend of 500 cents per share; total dividend of 800 cents per share    
for 2011                                                                        
Lowlights                                                                       
Regrettably, three fatalities                                                   
Cessation of zinc production at the Zincor refinery                             
Condensed group income statement (audited)                                      
                                                         2011     2010          
For the year ended 31 December                            Rm       Rm           
Revenue                                                   12 471   10 116       
Operating expenses                                        (9 663)  (7 628)      
Net operating profit                                      2 808    2 488        
Interest income (note 4)                                  159      116          
Interest expense (note 4)                                 (590)    (432)        
Income from investments                                   4        2            
Share of income from equity-accounted investments         4 668    3 717        
Profit before tax (note 2)                                7 049    5 891        
Income tax expense (note 5)                               (986)    (732)        
Profit for the year from continuing operations            6 063    5 159        
Profit for the year from discontinued operations (note 6) 1 594    76           
Profit for the year                                       7 657    5 235        
Profit attributable to:                                                         
Owners of the parent                                      7 653    5 208        
- continuing operations                                   6 073    5 167        
- discontinued operations                                 1 580    41           
Non-controlling interests                                 4        27           
- continuing operations                                   (10)     (8)          
- discontinued operations                                 14       35           
Profit for the year                                       7 657    5 235        
Condensed group statement of comprehensive income (audited)                     
2011     2010          
For the year ended 31 December                            Rm       Rm           
Profit for the year                                       7 657    5 235        
Other comprehensive income:                                                     
Exchange differences on translating foreign operations    800      (44)         
Cash flow hedges                                          (40)     204          
Share of comprehensive income of associates               (254)    40           
Share of comprehensive income of non-controlling                                
interests                                                 35       (57)         
Net gain recognised in other comprehensive income         541      143          
Total comprehensive income for the year                   8 198    5 378        
Total comprehensive income attributable to:                                     
Owners of the parent                                      8 159    5 408        
- continuing operations                                   6 641    5 167        
- discontinued operations                                 1 518    241          
Non-controlling interests                                 39       (30)         
- continuing operations                                   (6)      (12)         
- discontinued operations                                 45       (18)         
Total comprehensive income for the year                   8 198    5 378        
Ordinary shares (million)                                                       
- in issue                                                354      358          
- weighted average number of shares                       348      347          
- diluted weighted average number of shares               353      361          
Attributable earnings per share continuing operations                           
(cents)                                                                         
- basic                                                   1 745    1 489        
- diluted                                                 1 720    1 432        
Attributable earnings per share discontinued operations                         
(cents)                                                                         
- basic                                                   454      12           
- diluted                                                 448      11           
Aggregate attributable earnings per share (cents)                               
- basic                                                   2 199    1 501        
- diluted                                                 2 168    1 443        
Condensed group statement of cash flows (audited)                               
                                                         2011     2010          
For the year ended 31 December                            Rm       Rm           
Cash flows from operating activities                                            
- cash retained from operations                           6 503    4 106        
- net financing costs                                     (94)     (256)        
- tax paid                                                (502)    (430)        
- dividends paid                                          (2 123)  (1 056)      
Cash flows from investing activities                                            
- capital expenditure                                     (4 926)  (2 677)      
- proceeds from disposal of property, plant and equipment 496      60           
- investments in intangible assets                        (119)                 
- dividends from investments and equity-accounted                               
investments                                               3 525    1 817        
- increase in investments                                 (325)    (149)        
- other                                                   37                    
Net cash inflow                                           2 472    1 415        
Net cash flows from financing activities                                        
- shares issued                                           15       29           
- increase in non-controlling interests` loans            11       6            
- net borrowings repaid                                   (631)    (304)        
Net increase in cash and cash equivalents                 1 867    1 146        
Cash and cash equivalents at beginning of year            2 140    1 023        
Translation difference on movement in cash and cash                             
equivalents                                               158      (29)         
Cash and cash equivalents at end of year                  4 165    2 140        
Cash and cash equivalents classified as non-current                             
assets held for sale at end of year                       3 100                 
Cash and cash equivalents per Statement of Financial                            
Position                                                  1 065    2 140        
Cash and cash equivalents at end of year                  4 165    2 140        
Condensed group statement of financial position (audited)                       
                                                         2011     2010          
At 31 December                                            Rm       Rm           
Assets                                                                          
Non-current assets                                                              
Property, plant and equipment                             10 695   13 305       
Biological assets                                         66       46           
Intangible assets                                         128      75           
Investments in unlisted associates (note 8)               4 764    3 880        
Deferred tax                                              228      726          
Financial assets                                          1 538    1 375        
17 419   19 407        
Current assets                                                                  
Inventories                                               589      3 120        
Trade and other receivables                               2 763    3 752        
Current tax receivable                                    105      105          
Cash and cash equivalents                                 1 065    2 140        
                                                         4 522    9 117         
Non-current assets classified as held for sale (note 7)   14 979   85           
Total assets                                              36 920   28 609       
Equity and liabilities                                                          
Capital and reserves                                                            
Equity attributable to owners of the parent               23 588   17 437       
Non-controlling interests                                 20       (23)         
Total equity                                              23 608   17 414       
Non-current liabilities                                                         
Interest-bearing borrowings                               2 202    3 644        
Non-current provisions                                    2 166    2 097        
Post-retirement employee benefits                         133      96           
Deferred tax                                              1 845    1 353        
                                                         6 346    7 190         
Current liabilities                                                             
Trade and other payables                                  3 334    3 057        
Interest-bearing borrowings                               866      716          
Current tax payable                                       50       147          
Current provisions                                        151      33           
                                                         4 401    3 953         
Non-current liabilities classified as held for sale                             
(note 7)                                                  2 565    52           
Total equity and liabilities                              36 920   28 609       
Reconciliation of headline earnings (audited)                                   
                                                       Gross  Tax   Net         
For the year ended 31 December 2011                     Rm     Rm    Rm         
Profit for the year attributable to owners of the                               
parent                                                               7 653      
Adjusted for:                                                                   
- impairment of property, plant and equipment           516          516        
- reversal of impairment of property, plant and                                 
equipment                                               (869)        (869)      
- gains on disposal of subsidiaries                     (1)          (1)        
- gains or losses on disposal of property, plant and                            
equipment                                               3      (2)   1          
- share of associates` gains or losses on disposal of   2            2          
property, plant and equipment                                                   
Headline earnings                                       (349)  (2)   7 302      
Headline earnings from continuing operations            (34)   9     6 048      
Headline earnings from discontinued operations          (315)  (11)  1 254      
For the year ended 31 December 2010                                             
Profit for the year attributable to owners of the                               
parent                                                               5 208      
Adjusted for:                                                                   
- impairment of property, plant and equipment           4      (1)   3          
- gains or losses on disposal of property, plant and                            
equipment                                               (26)         (26)       
- share of associates` gains or losses on disposal of                           
property, plant and equipment                           1            1          
Headline earnings                                       (21)   (1)   5 186      
Headline earnings from continuing operations            (39)         5 128      
Headline earnings from discontinued operations          18     (1)   58         
For the year ended 31 December                             2011    2010         
Headline earnings per share aggregate (cents)                                   
- basic                                                    2 098   1 495        
- diluted                                                  2 069   1 437        
Headline earnings per share from continuing operations                          
(cents)                                                                         
- basic                                                    1 738   1 478        
- diluted                                                  1 714   1 421        
Headline earnings per share from discontinued operations                        
(cents)                                                                         
- basic                                                    360     17           
- diluted                                                  355     16           
Group statement of changes in equity (audited)                                  
                                         Other components of equity             
Foreign     Financial                  
                                Share    currency    instruments  Equity-       
                                capital  translation revaluation  settled       
                                Rm       Rm          Rm           Rm            
Balance at 1 January 2010        2 141    802         3            1 241        
Profit for the year                                                             
Other comprehensive income                (43)        203                       
Share of associates`                                                            
comprehensive income                      (43)        10                        
Issue of share capital 1         29                                             
Share-based payments movements                                     148          
Non-controlling interests                                                       
additional contributions                                                        
Dividends paid 2                                                                
Balance at 31 December 2010      2 170    716         216          1 389        
Profit for the year                                                             
Other comprehensive income                800         (40)                      
Share of associates`                                                            
comprehensive income                      72          20                        
Issue of share capital 1         15                                             
Employee share scheme (MPower)                                                  
vesting issue of shares          174                                            
Share-based payments movement                                      23           
Non-controlling interests                                                       
additional contributions                                                        
Transfer to distributable                                                       
reserve                                   (3)                                   
Dividends paid 2                                                                
Balance at 31 December 2011      2 359    1 585       196          1 412        
Final dividend paid per share                                                   
(cents) in respect of the 2010                                                  
financial year                   300                                            
Dividend paid per share (cents)                                                 
in respect of the 2011 interim                                                  
period                           300                                            
Final dividend payable per                                                      
share (cents) in respect of                                                     
2011 financial year              500                                            
1 Issued to the Kumba Resources Management Share Trust due to options           
exercised.                                                                      
2 The STC on these dividends amounts to Rnil million after taking into          
account STC credits.                                                            
Group statement of changes in equity (audited)                                  
                                                             Attributable       
Other     Retained to owners of       
                                          reserves  income   the parent         
                                          Rm        Rm       Rm                 
Balance at 1 January 2010                            8 721    12 908            
Profit for the year                                  5 208    5 208             
Other comprehensive income                                    160               
Share of associates` comprehensive income            73       40                
Issue of share capital 1                                      29                
Share-based payments movements                                148               
Non-controlling interests additional                                            
contributions                                                                   
Dividends paid 2                                     (1 056)  (1 056)           
Balance at 31 December 2010                          12 946   17 437            
Profit for the year                                  7 653    7 653             
Other comprehensive income                                    760               
Share of associates` comprehensive income  9         (355)    (254)             
Issue of share capital 1                                      15                
Employee share scheme (MPower) vesting                                          
issue of shares                                               174               
Share-based payments movement                                 23                
Non-controlling interests additional                                            
contributions                                                                   
Transfer to distributable reserve                             (3)               
Dividends paid 2                                     (2 217)  (2 217)           
Balance at 31 December 2011                9         18 027   23 588            
Final dividend paid per share (cents) in                                        
respect of the 2010 financial year                                              
Dividend paid per share (cents) in respect                                      
of the 2011 interim period                                                      
Final dividend payable per share (cents)                                        
in respect of 2011 financial year                                               
1 Issued to the Kumba Resources Management                                      
Share Trust due to options exercised.                                           
2 The STC on these dividends amounts to                                         
Rnil million after taking into account STC                                      
credits.                                                                        
Group statement of changes in equity (audited)                                  
                                                     Non-                       
                                                     controlling  Total         
                                                     interests    equity        
Rm           Rm            
Balance at 1 January 2010                             1            12 909       
Profit for the year                                   27           5 235        
Other comprehensive income                            (57)         103          
Share of associates` comprehensive income                          40           
Issue of share capital 1                                           29           
Share-based payments movements                                     148          
Non-controlling interests additional contributions    6            6            
Dividends paid 2                                                   (1 056)      
Balance at 31 December 2010                           (23)         17 414       
Profit for the year                                   4            7 657        
Other comprehensive income                            35           795          
Share of associates` comprehensive income                          (254)        
Issue of share capital 1                                           15           
Employee share scheme (MPower) vesting issue of                                 
shares                                                             174          
Share-based payments movement                         2            25           
Non-controlling interests additional contributions    8            8            
Transfer to distributable reserve                                  (3)          
Dividends paid 2                                      (6)          (2 223)      
Balance at 31 December 2011                           20           23 608       
Final dividend paid per share (cents) in respect of                             
the 2010 financial year                                                         
Dividend paid per share (cents)in respect of the 2011                           
interim period                                                                  
Final dividend payable per share (cents)in respect of                           
2011 financial year                                                             
1 Issued to the Kumba Resources Management Share Trust due to options           
exercised.                                                                      
2 The STC on these dividends amounts to Rnil million after taking into          
account STC credits.                                                            
Salient features                                                                
2011   2010         
                                                            Rm     Rm           
Net asset value per share (Rand)                             67     49          
Capital expenditure                                                             
- incurred                                                   4 926  2 677       
- contracted                                                 8 029  6 475       
- authorised but not contracted                              2 738  2 490       
Capital expenditure contracted relating to captive mines,                       
Tshikondeni, Arnot and Matla, which will be financed by                         
ArcelorMittal South AfricaLimited (AMSA Limited) and Eskom   90     1           
respectively                                                                    
Contingent liabilities (note 10)                             1 198  1 007       
Contingent assets (note 11)                                  82     63          
Operating lease commitments                                  60     132         
Operating sublease rentals receivable                        4      6           
Calculation of movement in net debt                                             
2011   2010         
                                                            Rm     Rm           
Net cash inflow                                              2 472  1 415       
- shares issued                                              15     29          
- loans from non-controlling interests                       11     6           
- share-based payments                                       (2)                
- investmentcapitalised to joint venture loan                21                 
- finance lease                                              125                
- non-cash flow movements in net debt applicable to currency                    
translation differences of transactions denominated in                          
foreign currency                                             (8)    187         
- non-cash flow movements in net debt applicable to currency                    
translation differences of net debt items of foreign                            
entities                                                     (151)  (126)       
Decrease in net debt                                         2 483  1 511       
Notes to the group financial results (audited)                                  
1. Basis of preparation                                                         
This condensed report for the year ended 31 December 2011 has been prepared     
under the supervision of WA de Klerk (CA)SA, South African Institute of         
Chartered Accountants (SAICA) Registration number: 00133273, in accordance      
with the International Accounting Standard (IAS) 34 Interim Financial           
Reporting, the requirements of the South African Companies Act, No 71 of        
2008, as amended, the AC 500 standards issued by the Accounting Practices       
Board or its successor and in compliance with the Listings Requirements of      
the JSE Limited.                                                                
The group financial statements have been prepared on the historical cost        
basis excluding financial instruments and biological assets, which are fairly   
valued, and conform to International Financial Reporting Standards (IFRS).      
The accounting policies adopted are in terms of IFRS and are consistent with    
those applied in the annual financial statements for the year ended 31          
December 2010.                                                                  
During 2011 the following accounting pronouncements became effective:           
Amended IFRS 1 First-time Adoption of International Financial Reporting,        
Amended IFRS 7 Financial Instruments: Disclosures, Amended IAS 1 Presentation   
of Financial Statements, Amended IAS 24 Related Party Disclosures and Amended   
IAS 34 Interim Financial Reporting. These pronouncements had no material        
impact on the accounting of transactions or the disclosure thereof.             
The accounting standards, amendments to issued accounting standards and         
interpretations, which are relevant to the group, but not yet effective at 31   
December 2011, have not been adopted. It is expected that, where applicable,    
these standards and amendments will be adopted on each respective effective     
date, except where specifically identified. The group continuously evaluates    
the impact of these pronouncements.                                             
2. Profit before tax                                                            
2011   2010         
For the year ended 31 December                               Rm     Rm          
Profit before tax is arrived at after:                                          
Continuing operations                                                           
Depreciation, and amortisation of intangible assets          (735)  (663)       
Net realised foreign currency exchange gains/(losses)        177    (30)        
Net unrealised foreign exchange (losses)/gains               (20)   6           
(Losses)/gains on derivative instruments held for trading    (154)  152         
Fair value gains adjustment on financial instruments         11     10          
Impairment reversals/(charges) and write-offs of trade and                      
other receivables                                            228    (44)        
Royalties                                                    (41)   (50)        
Surplus on disposal of property, plant and equipment         38     48          
Discontinued operations                                                         
Depreciation, and amortisation of intangible assets          (468)  (717)       
Net realised foreign currency exchange gains/(losses)        361    (95)        
Net unrealised foreign exchange gains/(losses)               35     (36)        
Gains/(losses) on derivative instruments held for trading    196    300         
Fair value gains adjustment on financial instruments         3      3           
Impairment reversals/(charges) of property, plant and                           
equipment(note 3)                                            353    (4)         
Impairment charges and write-offs of trade and other                            
receivables                                                  (2)    (1)         
Write-down to net realisable value of inventories            (1)    (50)        
Royalties                                                    (100)  (64)        
Deficit on disposal of property, plant and equipment         (37)   (16)        
3. Impairment reversals/(charges)                                               
Impairment of property, plant and equipment                  (516)              
Impairment of property, plant and equipment held for sale           (4)         
Total impairment charges                                     (516)  (4)         
Partial reversal of impairment of property, plant and                           
equipment held for sale                                      869                
Tax effect                                                          1           
Net effect of impairment reversals/(charges) on attributable                    
earnings                                                     353    (3)         
Net impairment reversals/(charges) attributable to                              
discontinued operations                                      353    (3)         
Impairment charges relates to the carrying value of the                         
property, plant and equipment of the Zincor refinery.                           
The impairment reversal relates to the carrying value of the                    
property, plant and equipment of KZN Sands.                                     
4. Net financing costs                                                          
Interest expense and loan costs                              (289)  (321)       
Finance leases                                               204    (70)        
Interest income                                              223    135         
Net interest income/(expense)                                138    (256)       
Interest adjustment on non-current provisions                (429)  (199)       
Total net financing costs                                    (291)  (455)       
Total net financing costs                                    (291)  (455)       
- continuing operations                                      (431)  (316)       
- discontinued operations                                    140    (139)       
5. Tax rate reconciliation                                   %      %           
Tax as a percentage of profit before tax                     12,7   11,3        
Tax effect of                                                                   
- assessed losses not provided for                           (0,3)  (0,2)       
- capital losses                                             (0,6)  (0,3)       
- disallowable expenditure                                   (2,3)  (0,2)       
- exempt income                                              0,4    0,7         
- special tax allowances                                            1,3         
- share of associates and joint ventures                     15,0   17,6        
- tax rate differences                                              0,1         
- Controlled Foreign Company profits (CFC)                          (0,2)       
- prior year tax                                             0,1    (1,9)       
- derecognition of deferred tax asset                        (6,2)  (0,2)       
- re-instatement of deferred tax asset                       9,2                
                                                            28,0   28,0         
6. Discontinued operations                                                      
The Rosh Pinah mine assets classified as held for sale represent a separate     
major line of business as well as geographical area of operation and form       
part of a single co-ordinated plan to dispose of the assets and related         
liabilities. Although the sale transaction is still conditional to the          
completion of all conditions precedent, IFRS 5 Non-current Assets Held for      
Sale and Discontinued Operations requires that the operations of the Rosh       
Pinah mine is classified as discontinued operations.                            
On 27 July 2011 it was announced that Exxaro was planning to cease zinc         
production at the Zincor refinery. Following the necessary consultations,       
Zincor ceased production on 12 December 2011.                                   
On 26 September 2011, Exxaro and Tronox Incorporated announced that New         
Tronox will acquire Exxaro`s mineral sands operations, which include,           
Exxaro`s 50% interest in the Tiwest Joint Venture with Tronox in Western        
Australia, along with 74% of Exxaro`s KZN Sands and Namakwa Sands operations    
in South Africa, in exchange for approximately 38,5% of New Tronox`s equity.    
The Glen Douglas dolomite mine investment, which was disclosed as a Non-        
Current Asset Held for Sale as at 31 December 2010, was sold to JSE-listed      
materials supplier Afrimat Limited on 1 January 2011. The investment was        
therefore effectively only accounted for one day in the year ended 31           
December 2011.                                                                  
Financial information relating to the discontinued operations for the period    
to the date of disposal is set out below.                                       
Financial performance and cash flow information                                 
                                                        2011     2010           
For the year ended 31 December                           Rm       Rm            
Revenue                                                  8 834    7 039         
Operating expenses                                       (7 261)  (6 891)       
Net operating profit                                     1 573    148           
Net financing income/(cost) (note 4)                     140      (139)         
Share of income from investments                         5                      
Profit before tax (note 2)                               1 718    9             
Income tax (expense)/benefit                             (124)    67            
Profit for the year from discontinued operations         1 594    76            
Cash flow attributable to operating activities           927      643           
Cash flow attributable to investing activities           (286)    (923)         
Cash flow attributable to financing activities           1 979    437           
Cash flow attributable to discontinued operations        2 620    157           
Gains/(losses) on the disposal of subsidiaries 1                                
                                                        Glen                    
                                                Turkey  Douglas    Total        
Year ended 31 December 2011                      Rm      Rm         Rm          
Consideration received:                                                         
Cash                                             17      33         50          
Total disposal consideration                     17      33         50          
Carrying amount of net assets sold               (12)    (37)       (49)        
Gain/(loss) on sale before and after income tax  5       (4)        1           
1 The Minerals Sands Operations and the Rosh Pinah Operation have been          
classified as discontinued as part of IFRS 5 requirements where a separate      
major line of business has been classified as held for sale. Actual sale has    
not occurred at 31 December 2011, whilst Zincor has been classified as          
discontinued based on the board decision to cease production.                   
7. Non-current assets classified as held for sale                               
                                                           2011    2010         
At 31 December                                              Rm      Rm          
The major classes of assets and liabilities classified                          
as held for sale are as follows:                                                
Assets                                                                          
Property, plant and equipment                               6 771   34          
Intangible assets                                           132                 
Deferred tax                                                465                 
Financial assets                                            158     21          
Inventories                                                 2 403   8           
Trade and other receivables                                 1 932   22          
Current tax receivable                                      18                  
Cash and cash equivalents                                   3 100               
14 979  85           
Liabilities                                                                     
Interest-bearing borrowings                                 834                 
Provisions                                                  692     29          
Deferred tax                                                69      8           
Trade and other payables                                    968     14          
Current tax payable                                         2       1           
                                                           2 565   52           
Total at end of year                                        12 414  33          
Included above are the assets and liabilities of Rosh Pinah, the Australian     
and South African Mineral Sands operations as well as other assets and          
liabilities classified as held for sale. Management is committed to the sale    
of the other assets and liabilities within the next 12 months.                  
8.   Investments                                                                
                                                          2011    2010          
At 31 December                                             Rm      Rm           
Market value of listed investments                         44                   
Directors` valuation of unlisted investments in associates 22 715  20 782       
Directors` valuation of unlisted investments in other                           
financial assets                                           392     407          
Directors` valuation of unlisted investments in non-                            
current assets held for sale                               2                    
9. Net cash/(debt)                                                              
Net cash/(debt)                                            263     (2 220)      
Net cash/(debt) is calculated as being interest-bearing borrowings less cash    
and cash equivalents, including those classified as non-current assets held     
for sale.                                                                       
10. Contingent liabilities                                                      
Comprises guarantees in the normal course of business from which it is          
anticipated that no material liabilities will arise, including guarantees to    
banks and other institutions. The increase in 2011 is attributable to the       
increase in the group`s share of contingent liabilities of associates and       
joint ventures. In 2010 the increase was due to guarantees to the Department    
of Mineral Resources (DMR) in respect of environmental liabilities on           
immediate closure of mining operations.                                         
Includes the group`s share of contingent liabilities of associates and joint    
ventures of R233 million (2010: R117 million). These contingent liabilities     
have no tax impact. The timing and occurrence of any possible outflows are      
uncertain.                                                                      
11. Contingent assets                                                           
A surrender fee of R82 million (2010: R63 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 to   
the grant of a mining lease.                                                    
12. Related party transactions                                                  
During the year 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.                              
13. Events after the reporting period                                           
Subsequent to the reporting date of 31 December 2011 and further to the         
unsuccessful offmarket takeover bid for Australian junior miner Territory       
Resources, Exxaro, through its wholly-owned subsidiary Exxaro Australia Iron    
Investments (Pty) Limited, launched an off market takeover bid for African      
Iron Limited. This offer initially remained open for acceptance until 14        
February 2012. By 14 February 2012 Exxaro obtained a shareholding of 66,6% in   
African Iron Ore Limited, with the offer automatically extended by a further    
14 days until 28 February 2012, in line with the Australian Stock Exchange      
take over rules. The bid does not represent an adjusting event.                 
The directors are not aware of any matter or circumstance arising after the     
statement of financial position date up to the date of this report, not         
otherwise dealt with in this report.                                            
14. JSE Limited Listings Requirements                                           
The financial year end results announcement has been prepared in accordance     
with the Listings Requirements of the JSE Limited.                              
15. Corporate governance                                                        
The group complies in all material respects with the Code of Corporate          
Practice and Conduct published in the King III Report on Corporate              
Governance.                                                                     
16. Mineral Resources and Mineral Reserves                                      
The group`s Mineral Resources and Ore Reserves have been reviewed during the    
year to provide updated estimates. No material changes to the Mineral           
Resources and Ore Reserves disclosed in the Exxaro annual report for the year   
ended 31 December 2010 were identified other than depletion due to continued    
mining activities.                                                              
17. Audit opinion                                                               
The independent external auditors, PricewaterhouseCoopers Inc., have audited    
the consolidated annual financial statements of Exxaro Resources Limited from   
which the condensed consolidated financial results have been derived. The       
condensed financial statements are consistent in all material respects with     
the consolidated group annual financial statements. The audit was conducted     
in accordance with International Standards of Auditing. The auditors have       
issued an unqualified audit opinion on the consolidated annual financial        
statements.                                                                     
A copy of the auditors` audit report is available for inspection at the         
company`s registered office.                                                    
Comments                                                                        
Comparability of results                                                        
Comments are based on a comparison of the group`s audited financial results     
and unaudited physical information for the years ended 31 December 2011 and     
2010 respectively. These results are not comparable due to the R869 million     
partial impairment reversal of the carrying value of the property, plant and    
equipment at KZN Sands, which was initially accounted for in the year ended     
31 December 2009, and a R516 million impairment of the carrying value of the    
property, plant and equipment at the Zincor refinery.                           
After fulfilment of all suspensive conditions, the Glen Douglas dolomite mine   
was sold to Afrimat Limited effective 1 January 2011. The investment was        
therefore effectively only accounted for one day in the year ended 31           
December 2011.                                                                  
Reported actual segment results (Audited)                                       
2011    2010          
For the year ended 31 December                             Rm      Rm           
Revenue                                                                         
Coal                                                       12 763  10 515       
Tied operations                                            3 140   2 952        
Commercial operations                                      9 623   7 563        
Mineral Sands                                              6 587   4 640        
KZN Sands                                                  1 196   1 288        
Namakwa Sands                                              2 904   1 801        
Australia Sands                                            2 487   1 551        
Base Metals                                                1 846   1 787        
Rosh Pinah                                                 698     674          
Zincor                                                     1 550   1 598        
Inter-segmental                                            (402)   (485)        
Other                                                      109     213          
Total                                                      21 305  17 155       
Net operating profit                                                            
Coal                                                       3 339   2 690        
Tied operations                                            309     186          
Commercial operations                                      3 030   2 504        
Mineral Sands                                              2 678   179          
KZN Sands 1                                                753     (66)         
Namakwa Sands                                              987     107          
Australia Sands                                            938     138          
Base Metals                                                (1 145) (113)        
Rosh Pinah                                                 102     143          
Zincor 2                                                   (1 239) (171)        
Other                                                      (8)     (85)         
Other                                                      (491)   (120)        
Total                                                      4 381   2 636        
1 Includes a partial impairment reversal of R869 million of the carrying        
value of the property, plant and equipment at KZN Sands, which impairment was   
initially accounted for in 2009.                                                
2 Includes an impairment of R516 million of the carrying value of the           
property, plant and equipment at Zincor refinery.                               
Exchange rates                                                                  
An average exchange rate of R7,28 (spot average of R7,22) to the US dollar      
(US$) was realised for the year ended 31 December 2011 compared to R7,72        
(spot average of R7,30) for the year ended 31 December 2010. Unrealised         
foreign currency losses, on the revaluation of monetary items denominated in    
a foreign currency were recorded based on the relative strength of the local    
and Australian currency to the US$ at 31 December 2011. The relative strength   
of the Australian dollar (AU$) also continued to impact negatively on the       
financial results of the mineral sands business in Australia. An average rate   
of US$0,99 cents (spot average of US$1,03 cents) to the AU$ was realised        
compared with US$0,87 cents (spot average of US$0,92 cents) in 2010.            
Revenue                                                                         
Group consolidated revenue increased by 24% to R21,3 billion due to higher      
selling prices across Exxaro`s commodities despite lower total coal sales and   
the adverse impact of a stronger local and Australian currency.                 
Coal                                                                            
Revenue was 21% higher mainly due to higher export sales at higher prices       
despite the lower volumes at the mines captive to Eskom, combined with lower    
other domestic sales volumes.                                                   
Mineral Sands                                                                   
Revenue increased by 42% to R6,6 billion with lower sales volumes recorded at   
higher prices.                                                                  
Base Metals                                                                     
Revenue increased marginally by 3% as a 1% higher average realised zinc price   
of US$2 191 per tonne partially offset the lower zinc metal sales volumes.      
Net operating profit                                                            
Group consolidated net operating profit was R1 392 million or 53% higher at     
R4 billion after exclusion of the R869 million partial reversal of the          
impairment of the carrying value of the property, plant and equipment at KZN    
Sands accounted for in 2009, as well as the R516 million impairment of the      
carrying value of the property, plant and equipment at the Zincor refinery.     
Coal                                                                            
The coal business reported a 24% increase in net operating profit to R3 339     
million at an operating margin of 26% as higher selling prices and stronger     
international demand were only partially negated by lower local demand. The     
weaker domestic performance was partially as a result of lower demand from      
AMSA Limited as well as lower sales volumes from the operations tied to         
Eskom. Despite the lower sales volumes from the mines tied to Eskom, these      
operations recorded a 66% increase in net operating profit to R309 million,     
resulting from a revised manner by which the group applies the discount rates   
on the calculation and recovery of rehabilitation costs contributing R132       
million to this number. The net impact of the revised calculation results in    
additional rehabilitation costs recoverable from Eskom.                         
Mineral Sands                                                                   
The higher revenue recorded translated into a higher consolidated net           
operating profit of R1 702 million even after excluding the partial             
impairment reversal of the property, plant and equipment at KZN Sands of R869   
million and non-recurring profit recognised on the Tronox International         
(Tronox) buy back transaction amounting to R107 million. Sales volumes at       
Namakwa Sands and Australia Sands increased on the back of higher demand. KZN   
Sands` sales were however lower due to combined furnace unavailability          
(Furnace 1 down for four months in 2011 and Furnace 2 down for eight months     
in 2011).                                                                       
The stronger AU$ against the US$ has been partially mitigated by the hedging    
of US$ receivables of the Australian operation, with realised foreign           
exchange gains of R90 million in 2011.                                          
Base Metals                                                                     
Despite the marginally higher revenue recorded, a net operating loss of R629    
million, excluding the impairment of carrying amount of property, plant and     
equipment at the Zincor refinery, was reported mainly due to the previously     
announced decision to cease zinc production invariably resulting in an under    
recovery of fixed expenses. The impact of continued higher than inflation       
increases in electricity and maintenance expenses also continued to             
contribute negatively to the base metals results.                               
Rosh Pinah`s operating results were also lower based on lower zinc              
concentrate production and sales.                                               
Other                                                                           
Net expenditure increased primarily from non-recurring costs associated with    
the implementation of Exxaro`s new operating model and associated technology    
enablement as well as other project related costs.                              
Earnings                                                                        
Attributable earnings, inclusive of Exxaro`s equity accounted investment in     
associates, amounted to R7 653 million or 2 199 cents per share, up 47% from    
2010`s 1 501 cents per share.                                                   
Equity accounted investments in the post-tax profits of associates consists     
of Exxaro`s 19,98% interest in Sishen Iron Ore Company (Pty) Limited (SIOC)     
of R4 456 million, 26% in Black Mountain Mining (Pty) Limited (Black            
Mountain) of R210 million and 22% in the Chifeng zinc refinery of R2 million.   
Headline earnings which exclude, inter alia, the impact of the impairment and   
partial impairment reversal, were R7 302 million or 2 098 cents per share.      
This represents a 41% increase on the comparable 2010 earnings of R5 186        
million or 1 495 cents per share.                                               
Cash flow                                                                       
Cash retained from operations was R6 503 million for the group. This was        
primarily used to fund net financing charges of R94 million, taxation           
payments of R502 million, dividend payments of R2 123 million, and capital      
expenditure of R4 926 million of which R3 301 million was invested in new       
capacity and R1 625 million applied to sustaining and environmental capital.    
R3 070 million of the expansion capacity expenditure was for the Grootegeluk    
Mine Expansion Project (GMEP) for the Medupi power station. After the receipt   
of R3 525 million in dividends, primarily from SIOC, the group had a net cash   
inflow of R2 472 million for the year. The final dividend for 2011 will         
amount to a further cash outflow of approximately R1 771 million offset by      
the dividend inflow from SIOC of approximately R1 958 million.                  
Net debt of R2 220 million at 31 December 2010 has inverted to a net cash       
position of R263 million at 31 December 2011.                                   
Safety and sustainable development                                              
Regrettably three fatalities were suffered during the first seven months of     
2011. The group continues to pursue its commitment to a zero injury and         
fatality environment. In 2012, Exxaro will implement further initiatives to     
enhance the current safety and risk assessment and control effectiveness        
drive. The average LTIFR per two hundred thousand man-hours worked improved     
to 0,20, from 0,25 in 2010, reflecting a 20% improvement year-on-year and       
below the group`s target at 0,21.                                               
The 2011 HIV/AIDS programme target for testing was 75%. This target was         
exceeded when 86% of employees, including contractors, underwent voluntary      
testing. The HIV prevalence rate is estimated at 12% of permanent employees     
(12,8% including contractors) as compared to the industry average of 25%.       
Exxaro has trained 153 community peer educators around six of the Mpumalanga    
business units as part of the HIV community awareness programme. The training   
will be extended to business units in the Waterberg region in 2012.             
In addition to the 16 Integrated Water Use Licences (IWULs) already granted     
in terms of National Water Act, No 36 of 1998, two further IWULs were           
approved and five Environmental Authorisations were granted in terms of the     
National Environmental Act, No 107 of 1998 in 2011.                             
All 16 Exxaro operated business units have retained their ISO 14001 and OHSAS   
18001 certification in 2011.                                                    
Creating wealth for employees through meaningful empowerment                    
When Exxaro was created in November 2006 following the unbundling of Kumba      
Resources, MPower was created as part of the group`s commitment to broad        
based ownership. Only employees up to lower management level qualified to be    
beneficiaries of the scheme as middle and senior management participate in      
management share incentives schemes. MPower held approximately 3% of Exxaro`s   
issued shares with each of the 9 694 beneficiaries` assigned units notionally   
linked to the shares held by the scheme. Shares held by MPower were sold in     
the last quarter of 2011, generating over R1 billion for distribution among     
the beneficiaries. The distribution varied dependent on number of units         
assigned; in turn based on individual length of MPower membership. Each         
beneficiary that participated for the full five years of the scheme received    
a pre-tax distribution of R135 102. In addition to this distribution, MPower    
has already paid a total of R81,5 million in dividends to participants.         
Physical information (unaudited)                                                
                                   Year ended 31      Six months ended 31       
December           December                  
(`000 TONNES)                       2011      2010     2011        2010         
Coal                                                                            
Production                                                                      
Power station coal                  32 532    36 767   16 832      18 498       
Tied operations 1                   12 441    16 461   6 071       8 096        
Commercial operations               20 091    20 306   10 761      10 402       
Coking coal                         2 161     2 419    920         1 232        
Tied operations 1                   299       285      165         161          
Commercial operations               1 862     2 134    755         1 071        
Steam coal                          7 337     7 502    3 535       3 984        
Char                                142       114      65          65           
Total                               42 172    46 802   21 352      23 779       
Sales                                                                           
Eskom coal                          32 301    36 428   16 470      18 049       
Tied operations 1                   12 443    16 438   6 067       8 082        
Commercial operations               19 858    19 990   10 403      9 967        
Other domestic coal                 4 670     5 044    1 840       2 597        
Tied operations 1                   325       260      159         143          
Commercial operations               4 345     4 784    1 681       2 454        
Coal export                         4 898     4 106    2 814       2 264        
Char                                129       122      55          70           
Total                               41 998    45 700   21 179      22 980       
Mineral Sands 2                                                                 
Production                                                                      
Ilmenite                            771       718      404         351          
Zircon                              195       196      101         102          
Rutile                              67        63       35          35           
Synthetic rutile                    110       90       56          39           
Pig iron (LMPI)                     160       153      92          72           
Scrap iron                          8         12       4           4            
Slag tapped                         277       262      153         121          
Chloride slag                       281       232      131         148          
Sulphate slag                       49        52       23          36           
Leucoxene                           10        13       5           6            
Pigment                             76        57       32          32           
Total                               2 004     1 848    1 036       946          
Sales                                                                           
Ilmenite                            15                 15                       
Zircon                              173       243      81          119          
Rutile                              66        79       34          44           
Synthetic rutile                    37        30       21          7            
Pig iron (LMPI)                     170       194      91          87           
Scrap iron                          4         3        3           2            
Chloride slag                       274       264      148         166          
Sulphate slag                       50        39       22          32           
Leucoxene                           8         16       4           9            
Pigment                             71        55       28          31           
Total                               868       923      447         497          
Base Metals                                                                     
Production                                                                      
Zinc concentrate                    108       120      55          60           
Rosh Pinah                          89        101      46          49           
Black Mountain                      19        19       9           11           
Zinc Metal                          101       120      44          66           
Zincor                              73        90       32          47           
Chifeng 3                           28        30       12          19           
Lead concentrate                    36        37       16          20           
Rosh Pinah                          16        19       7           10           
Black Mountain                      20        18       9           10           
Sales                                                                           
Zinc metal sales                    114       119      51          60           
Domestic                            86        90       40          44           
Export                              28        29       11          16           
Lead concentrate sales                                                          
Export                              18        20       11          13           
1 Tied operations refer to mines that supply their entire production to         
either Eskom or AMSA Limited in terms of contractual agreements.                
2 Includes Exxaro Sands Australia`s interest in the Tiwest joint venture.       
3 Exxaro`s effective interest in the Chifeng refinery is disclosed.             
Operations                                                                      
Coal                                                                            
Production                                                                      
Power station coal production at the Eskom tied operations was 24% lower due    
to previously reported adverse geological conditions at the Arnot mine in       
March 2011, the closure of the Mooifontein open cast operation as well as the   
flooding in Mine 2 at M atla in February and June respectively.                 
Production volumes at the commercial mines remained relatively in line with     
the previous year.                                                              
Coking coal production declined by 11% because of lower demand from AMSA        
Limited, partially offset by higher production at Tshikondeni due to the        
higher contribution from the mini-pits initiated in April 2011.                 
Steam coal production was 2% lower due to lower production at the NBC and NCC   
mines. The open pit operation at NCC reached the end of its economic life in    
the first quarter of 2010. This, together with challenging underground          
conditions, resulted in lower production than in 2010. NBC experienced a        
combination of challenging geological and equipment problems which led to       
lower production. Higher production was, however, recorded at Leeuwpan as a     
result of improved feed tempo to the dense medium separation plant and at       
Inyanda due to higher plant availability and throughput to meet increased       
demand.                                                                         
The Char plant production was 25% higher due to improved availability and       
higher feed rate per hour.                                                      
Sales                                                                           
Sales of power station coal tonnes to Eskom, were 11% lower as a result of      
lower production at Matla and Arnot. This was partially offset by higher        
sales recorded at Leeuwpan. Domestic non-Eskom sales decreased by 9% mainly     
due to production challenges at NBC.                                            
Export sales tonnes were 19% higher than in 2010, mainly as a result of         
increased performance by Transnet Freight Rail (TFR).                           
Mineral sands                                                                   
Production                                                                      
The consolidated mineral sands business reported an increase in production of   
most of its products. Lower heavy minerals concentrate production, as the KZN   
Sands Hillendale mine nears its end of life resulting in lower grades was       
offset by higher production in Australia as well as at Namakwa Sands from       
increased side feed. Titanium slag production was also lower at KZN Sands as    
Furnace 1 and 2 were down for four and eight months respectively.               
Zircon production reflects a volume increase at Namakwa Sands from better       
head grades. Lower production in Australia due to lower mineral grades was      
offset by improved recovery. Rutile production was 6% higher as increased       
production at Namakwa Sands from improved recovery and higher mineral grades    
was only partially offset by lower production in Australia. Synthetic rutile    
production in Australia was 22% higher in 2011 due to the 2010 plant shut       
which limited production in 2010.                                               
Record pigment production was achieved in 2011 as a result of a 28%             
improvement in performance from the existing plant, complemented by             
production volume from the pigment plant expansion commissioned in the          
previous year.                                                                  
Sales                                                                           
The increase in mineral sands product prices coupled with higher demand         
resulted in increased sales volumes at Namakwa Sands and Australia Sands,       
offset by lower volumes at KZN Sands due to furnace downtime.                   
Base Metals                                                                     
On 27 July 2011 it was announced that Exxaro was planning to cease zinc         
production at the Zincor refinery. Following the necessary consultations,       
Zincor ceased zinc production on 12 December 2011.                              
Production                                                                      
Production of zinc metal at the Zincor refinery of 73kt was 17kt lower than     
in 2010. Zinc concentrate and lead production at Rosh Pinah were 12kt and 3kt   
lower than in 2010 respectively. Zinc production grades were however 2%         
higher due to recovery improvements on the floatation plant.                    
Sales                                                                           
Domestic zinc metal sales at Zincor were 4% lower at 86kt mainly due to lower   
production as a result of the planned ramp-down.                                
Capital expenditure and project pipeline                                        
Exxaro`s growth initiatives are focused on diversifying the business further    
with carbon,reductants, ferrous and energy projects aligned with the groups     
approved commodity strategy.                                                    
Coal                                                                            
Construction on GMEP, to supply Eskom with 14,6Mtpa of coal for the Medupi      
power station, continues to progress to deliver first coal in May 2012 and is   
expected to be completed within budget. Overall project progress has            
increased to 72% completion. The total project spend to date is R4,4 billion    
with total capital expenditure for the project still forecast at R9,5           
billion. Total funds committed to date amount to approximately R6,5 billion.    
The Thabametsi development project, as a supplier of coal to a base load        
Independent Power Producer (IPP), is expected to reach first coal production    
by 2016/17, dependent on the Waterberg IPP and water supply development         
schedule.                                                                       
Exxaro continues to engage with the relevant stakeholders for the conclusion    
of implementation plans for an integrated infrastructure for the Waterberg      
coalfields which will include the supply of water, rail, road and housing       
requirements.                                                                   
Exxaro entered into a prospecting joint venture agreement with Sasol Mining     
to investigate the commercial viability of the development of a new coal mine   
in the Waterberg to also supply Sasol`s potential new 80 000 barrels per day    
inland coal to liquids facility (Project Mafutha). The detailed pre-            
feasibility study for Project Mafutha has now been completed. Based on the      
findings of the pre-feasibility study, global environmental risks, and in the   
absence of a commercially viable carbon emission solution which is              
realistically not anticipated before 2020, the decision has been taken to not   
proceed with Project Mafutha at this stage.                                     
Studies regarding the evaluation of the Phase 2 expansion of the Sintel Char    
plant to produce an additional 140Ktpa of char and the production of market     
coke from semi-soft coking coal at Grootegeluk continue to progress. The        
studies are still expected to be completed in the second half of 2012.          
Exxaro`s application for a mining right for the Belfast project has been        
accepted by the DMR. The bankable feasibility study is expected to be           
completed by the second quarter of 2012. Specialist studies, as required by     
the National Environmental and National Water Acts, were submitted to the       
relevant authorities in the fourth quarter of 2011. Start-up and first          
production is expected to be in 2014.                                           
A concept study completed on the Moranbah South project indicated high          
potential for a dual long wall mine to produce between 10 and 12 Mtpa of        
premium quality hard coking coal. The pre-feasibility study commenced in 2011   
and is expected to be completed in the second quarter of 2012,whereafter a      
bankable feasibility study will commence.                                       
Mineral Sands                                                                   
On 26 September 2011, Exxaro and Tronox announced that New Tronox will          
acquire Exxaro`s mineral sands operations, which include Exxaro`s 50%           
interest in the Tiwest Joint Venture with Tronox in Western Australia, along    
with 74% of Exxaro`s KZN Sands and 74% of Namakwa Sands operations in South     
Africa, in exchange for approximately a 38,5% shareholding in New Tronox. The   
long term partnership is expected to enhance production capabilities and        
implement technical efficiencies in the integrated process, creating a truly    
global, vertically integrated titanium dioxide pigment producer. This is        
expected to result in a strong platform for future growth uniquely positioned   
to capitalise on favourable market dynamics and to serve the needs of the       
ever growing pigment and zircon customer base across the globe. It is still     
expected that the transaction will close in the second quarter of 2012          
following New Tronox shareholder and regulatory approvals.                      
Exxaro awaits the customary regulatory and environmental approvals for the      
Fairbreeze project before construction can commence. Such approvals were not    
obtained in the second half of 2011 as previously expected. Detailed design     
was however completed in the second half of 2011. The department of             
Agriculture, Environmental Affairs and Rural Development requires additional    
information of Fairbreeze`s Basic Assessment Report on air quality, traffic     
and agricultural studies, as well as rehabilitation reports. This report,       
with the requested information, was sent on 9 February 2012 to Interested and   
Affected Parties for review by 9 March 2012 and Exxaro also awaits the          
decision from the relevant authorities by the end of June 2012.                 
Commissioning is now only expected in the first half of 2014.                   
A partial reversal of the previous impairments of the carrying value of the     
property, plant and equipment at KZN Sands was made in the second half of       
2011. A decision on the reversal of the remaining portion will be taken once    
the regulatory and environmental approvals for Fairbreeze have been obtained.   
Base Metals                                                                     
The formal process to divest from the base metals business commenced early in   
May 2011. Exxaro received several offers for the Rosh Pinah zinc and lead       
mine in Namibia, following which it has entered into an agreement relating to   
the disposal of its 50,04% shareholding in, and claims against, Rosh Pinah      
Zinc Corporation to a subsidiary of Glencore International AG for R939          
million, subject to final working capital and net debt adjustments. The         
transaction agreement contains terms and conditions that are customary for      
transactions of this nature, including, inter alia, regulatory approvals to     
be obtained in Namibia and South Africa. It is expected that the transaction    
will be completed by the second quarter of 2012.                                
No offer was received for the Zincor zinc refinery in Springs, South Africa.    
It was consequently decided to cease zinc production at Zincor due to the       
refinery becoming uneconomical as a result of the high cost of zinc feedstock   
as well as escalating transport, electricity and labour costs. Zinc             
production was ramped down and finally ceased during December 2011. The         
refinery has been put on care and maintenance with a team appointed to          
evaluate any potential future use of the facility`s assets.                     
In addition to the impairment of the carrying value of the property, plant      
and equipment at Zincor made on 30 June 2011, additional impairments were       
also made in the second half of 2011 arising from capital commitments for the   
remainder of 2011.                                                              
Although discussions for the divestment of Exxaro`s shareholding in the         
Chifeng zinc refinery in China were well advanced, the potential buyer was      
unable to meet contractual obligations and the transaction was terminated.      
Exxaro still plans to sell this business and renewed efforts will be made       
during 2012 to divest from this asset.                                          
Energy                                                                          
Exxaro continues to explore opportunities in the energy markets with a focus    
on cleaner energy initiatives. To this end, Exxaro and its new equity partner   
have agreed all the salient points of the shareholders` agreement and will      
aim to sign the definitive agreement by the end of the first quarter of 2012.   
Exxaro intends submitting five renewable energy projects in terms of the        
South African government`s drive to procure 3 725MW of renewable energy         
electricity from the private sector. These projects will be submitted in the    
second window of submission, which closes on 5 March 2012, through the          
Department of Energy`s (DoE) Request for Qualification and Proposals for new    
Generation Capacity under the IPP Procurement Programme issued on 3 August      
2011. The five projects entail two solar projects and three wind projects.      
The board of directors approved the outcome of the bankable feasibility study   
for a 14MW co-generation plant at Namakwa Sands in the third quarter of 2011.   
Construction of the power plant is expected to start in the second quarter of   
2012, with commercial operation date planned for the fourth quarter of 2012.    
The Clean Development Mechanism registration of this project is underway.       
The pre-feasibility study for the 60MW co-generation plant at Grootegeluk       
mine is in the final stages and is now expected to be completed in the first    
half of 2012.                                                                   
The facilitation for the development of a 600MW coal-fired base load power      
station in the Waterberg is underway. Non-binding term sheets for the off-      
take of 1 150MW of electricity have been signed between Exxaro and industrial   
off-takers. Four base load IPPs have been selected, with the preferred bidder   
expected to be selected in the first half of 2012. The pre-feasibility study    
of the project will progress during 2012 and a bankable feasibility study is    
planned conditional to the establishment of appropriate enabling environment    
in which such a development can proceed.                                        
A clearer indication of the potential for economic gas flow by means of the     
evaluation of opportunities for underground coal gasification in both South     
Africa and Botswana, is now only expected in the first half of 2012.            
Ferrous                                                                         
AlloyStream`slarge scale demonstration facility to commercialise the            
technology for beneficiation of manganese ore into high carbon ferromanganese   
alloy together with Assmang Limited, is expected to be commissioned in the      
first quarter of 2012. The Ferromanganese furnace (Project Letaba)              
demonstration facility was completed in the fourth quarter of 2011.             
Subsequent to the reporting date of 31 December 2011 and further to the         
unsuccessful offmarket takeover bid for Australian junior miner Territory       
Resources, Exxaro, through its wholly-owned subsidiary Exxaro Australia Iron    
Investments (Pty) Limited, launched an off-market takeover bid for African      
Iron Limited. This offer initially remained open for acceptances until 14       
February 2012. By 14 February 2012 Exxaro obtained a shareholding of 66,6% in   
African Iron Ore Limited, with the offer automatically extended by a further    
14 days until 28 February 2012, in line with the Australian stock exchange      
takeover rules.                                                                 
African Iron Limited is an Australian-listed and domiciled iron ore             
development company working on the exploration and evaluation of the Mayoko     
Iron Ore and Ngoubou-Ngoubou Projects, located approximately 300km north-east   
of Pointe-Noire in the Republic of Congo in central West Africa. It owns a      
92% interest in the Mayoko Iron Ore Project which currently has a Joint Ore     
Reserves Committee (JORC) code compliant mineral resource of 121 million        
tonnes of iron ore. The Mayoko Iron Ore Project represents a near term          
development opportunity in an emerging iron ore province in central West        
Africa with an existing underutilised, heavy haulage mineral railway passing    
within 2km of the main prospect. African Iron`s second opportunity is its 85%   
interest in the 944km2 Ngoubou-Ngoubou Authority to Prospect, which is          
contiguous with Mayoko. African Iron Limited`s assets provide an excellent      
match to Exxaro`s stated objective of gaining operational exposure in iron      
ore and represent a reasonably sized opportunity, which will allow Exxaro to    
leverage its bulk commodity and iron ore expertise.                             
Conversion of mining rights                                                     
All of Exxaro`s old order mining licences have been converted to mining         
rights. The converted mining rights for Grootegeluk and Gravelotte have been    
executed in the second half of 2011. The DMR has confirmed the granting of      
converted mining rights for Tshikondeni, Matla, Strathrae, Arnot and Glisa.     
These rights still need to be scheduled for execution by the DMR. Exxaro is     
continuously in consultation with the different regional offices of the DMR     
to expedite the execution process.                                              
Outlook for 2012                                                                
Greater emphasis will be placed to create and maintain a safe, healthy and      
environmentally friendly working environment.                                   
The group`s consolidated results for 2012 will continue to be impacted by the   
trading levels of the local currency and the AU$ against the US$. At 31         
December 2011 Exxaro had US$200 million of hedging in place at an average       
exchange rate of R7,56 for the local operations as well as US$17 million at     
an average rate of US$0,97 to the AU$ for the Australian operation.             
The coal business will continue to focus optimising and growing its market      
position in the supply of coal to Eskom as well as the other domestic and       
export markets while considering alternatives to increase export volumes.       
Continued reliable performance from TFR and a progressive increase in           
allocation at the Richards Bay Coal Terminal remain paramount. International    
coal prices are expected to decrease in 2012 along with lower coking prices     
while volumes to Eskom and AMSA Limited should remain stable.                   
Mineral sands` short to medium term focus remains the granting of relevant      
regulatory approvals for the construction of Fairbreeze, as well as the         
finalisation of the New Tronox transaction. Feedstock prices should increase    
significantly supported by higher demand. A recovery in demand for Zircon is    
also expected in the second quarter of 2012.                                    
Base metals finalisation of the sale of Rosh Pinah to a subsidiary of           
Glencore International AG is expected in the second quarter of 2012, whilst     
the future application of the Zincor plant is still under investigation.        
The financial information on which the outlook statement is based has not       
been reviewed nor reported on by the group`s auditors.                          
Changes to the board                                                            
Ms N Langeni resigned as non-executive director effective 18 January 2012.      
The board expressed its sincere appreciation for her contribution during her    
term of office. As a result of the resignation, Ms S Dakile-Hlongwane was       
appointed as non-executive director of the board on 21 February 2012, as the    
Basadi Ba Kopane Investments (Pty) Limited nominated representative.            
Maria Susanna (Marie) Viljoen, Company Secretary of first Kumba Resources       
Limited and then Exxaro since 1 August 2001, retired with effect 30 June        
2011. The board expressed its sincere appreciation for her service during her   
term of office. The board of directors appointed Catharina Helena (Carina)      
Wessels as Group Company Secretary with effect 1 July 2011. Carina holds LLB    
and LLM degrees, is an admitted advocate of the High Court of South Africa,     
and is a Fellow and Senior Vice-President of the Chartered Secretaries          
Southern Africa.                                                                
Final dividend                                                                  
The board of directors has declared a final cash dividend number 18 of 500      
cents per share in respect of the 2011 final dividend. 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, 30 March 2012.      
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       Friday, 23 March 2012                     
Shares trade ex dividend              Monday, 26 March 2012                     
Record date                           Friday, 30 March 2012                     
Payment date                          Monday, 02 April 2012                     
Share certificates may not be dematerialised or rematerialised during the       
period Monday, 26 March 2012 and Friday, 30 March 2012, both days inclusive.    
On Monday, 02 April 2012 the final 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 02 April 2012 will be posted on that date.               
Shareholders who have dematerialised their share certificates will have their   
accounts at their Central Securities Depository Participant (CSDP) or broker    
credited on Monday, 02 April 2012.                                              
On behalf of the board:                                                         
Len Konar             SiphoNkosi                  Wim de Klerk                  
Chairman              Chief Executive Officer     Finance Director              
21 February 2012                                                                
Registered Office                                                               
Exxaro Resources Limited                                                        
Roger Dyason Road                                                               
Pretoria West, 0183                                                             
Tel no +27 12 307 5000                                                          
Fax no +27 12 323 3400                                                          
Transfer Secretaries                                                            
Computershare Investor                                                          
Services (Pty) Limited                                                          
Ground Floor,                                                                   
70 Marshall Street                                                              
Johannesburg, 2001                                                              
PO Box 61051,                                                                   
Marshalltown, 2107                                                              
This report is available at: www.exxaro.com                                     
Directors: Dr D Konar (Chairman), SA Nkosi (Chief Executive Officer), WA de     
Klerk (Finance Director), S Dakile-Hlongwane , JJ Geldenhuys, CI Griffith, U    
Khumalo, VZ Mntambo, RP Mohring, NL Sowazi, J van Rooyen,                       
D Zihlangu                                                                      
Prepared under supervision of: WA de Klerk (CA) SA, SAICA registration          
number: 00133273                                                                
Group Company Secretary: CH Wessels (+27 12 307 4384)                           
Investor Relations: P Lebina (+27 12 307 3081)                                  
Sponsor: Deutsche Securities SA Proprietary Limited (+27 11 775 7000)           
If you have any queries regarding your shareholding in Exxaro Resources         
Limited, please contact the Transfer Secretaries at +27 11 370 5000.            
www.exxaro.com                                                                  
Date: 23/02/2012 07:05:44 Supplied by www.sharenet.co.za                     
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