Exxaro Reviews Leeuwpan Mine Over Financial Losses

In a related update, Exxaro reported a 15% drop in coal sales to Eskom coal requirements. This decline was linked to the power utility's extended maintenance schedules. However, the company saw a 23% increase in thermal coal sales to other domestic buyers.

This jump was due to export volumes being redirected to the local market. With international logistics disrupted, Exxaro found new demand within South Africa for thermal coal, partially offsetting the losses from Eskom.

Steel-making coal sales fell sharply, by 26%. This decline was caused by ongoing rail issues and heavy rainfall, which disrupted operations in the first half of the year.

Transport Disruptions Impact Coal Movement

Riaan Koppeschaar, Exxaro’s financial director, noted that rail transport continues to face challenges. Transnet Freight Rail (TFR) struggles with infrastructure problems, cable theft, and equipment shortages. These issues continue to disrupt coal shipments.

A derailment in the second quarter further slowed down coal delivery. Despite these setbacks, the Richards Bay Coal Terminal saw a volume increase. Shipments rose from 52 million tonnes per annum (Mtpa) to 54.45 Mtpa over the past year.

The improvement suggests that some bottlenecks are being resolved. While far from stable, rail performance has shown signs of recovery, especially in certain regions.

Rail Service Improves in Mpumalanga and Waterberg

Although TFR faces challenges, rail services have improved in parts of the country. Mpumalanga has seen more consistent delivery schedules, which benefits operations like Leeuwpan mine.

In the Waterberg region, weekly train runs increased from two to three in the first quarter of 2025. That number rose again to five trains per week in the second quarter.

These changes help reduce delays and support more stable coal supply chains. Exxaro still views rail reliability as a major hurdle but acknowledged recent gains in overall execution.

Richards Bay Terminal Volumes Show Positive Trend

Despite major rail disruptions, Richards Bay Coal Terminal handled more coal this year. Volumes climbed to 54.45 Mtpa from 52 Mtpa in the prior year.

This increase shows that some logistics improvements are taking effect. It also points to stronger export demand, which may help balance the impact of domestic operational problems.

Improved volumes at Richards Bay are a positive signal for Exxaro. As long as rail performance continues to recover, the company may find more breathing room to manage its supply chain more efficiently.

Job Security at Leeuwpan Still Uncertain

Right now, job security at Leeuwpan mine remains unclear. Exxaro is working to avoid retrenchments, but ongoing losses make that difficult. The company is encouraging input from staff and their unions to find workable solutions.

The formal Section 189 process ensures that all parties are consulted before decisions are made. Employees will be updated as the process unfolds, and the company will continue to explore ways to save both jobs and the mine.

Exxaro remains committed to finding a practical solution that avoids large-scale layoffs, but the financial challenges at Leeuwpan mine make this a tough task.

Pressure Mounts on Exxaro’s Operational Strategy

Exxaro’s problems at Leeuwpan mine reflect broader pressures in the mining sector. Rail service instability, poor weather, and unreliable utility demand all impact output.

The company’s decision to launch formal talks shows how serious the situation has become. Losses cannot continue without affecting the wider business. That’s why Exxaro is now forced to explore tough options.

If no turnaround strategy works, more drastic steps may follow. Still, the company is trying to approach the situation with transparency and collaboration, starting with Leeuwpan mine.

Collaborative Efforts Could Shape Leeuwpan’s Future

Exxaro’s approach to Leeuwpan mine reflects a balance between business needs and employee welfare. While job cuts are possible, the company is prioritizing consultation and collaboration.

Employee input could help identify new strategies to improve financial performance. If these efforts succeed, the mine could return to profitability and avoid retrenchments.

Exxaro’s strategy now depends on open discussions, stable rail operations, and better local demand for coal. The next 90 days will determine whether Leeuwpan mine has a sustainable path forward.

Outcome for Leeuwpan Mine Still Hangs in Balance

The Leeuwpan mine faces serious uncertainty as Exxaro works to resolve its ongoing losses. Job cuts are possible, but not guaranteed. The formal consultation process offers a chance for employees and management to find common ground.

Improvements in rail services and local coal demand may help Exxaro manage some of the current challenges. Still, a clear and workable plan is essential if the mine is to avoid closure or downsizing.

The coming weeks will be critical. Both the company and its workers have a shared interest in making Leeuwpan mine viable again.

New Direction Needed for Leeuwpan’s Survival

The situation at Leeuwpan mine highlights how operational challenges can quickly threaten jobs and stability. Exxaro’s decision to start formal consultations shows its commitment to finding a solution with employee input. A sharp focus on collaboration, efficiency, and local demand may help turn things around; but success is not guaranteed. What happens over the next few months will shape not just the future of Leeuwpan mine, but also Exxaro’s broader strategy in a complex coal market.