New Exxaro boss Ben Magara commits firm to battery metals
Ben Magara Appointed New CEO of Exxaro Resources Amidst Strategic Shift
EXXARO Resources has announced the appointment of Ben Magara as its new Chief Executive Officer, effective April 1. The decision follows a period of significant leadership changes and will see Magara succeed interim CEO Riaan Koppeschaar, who will revert to his previous position as finance director.
Leadership Transition and Stability Goals
Magara’s ascendance to the CEO role comes on the heels of the contentious departure of former CEO Nombasa Tsengwa in February, underscoring the urgent need for renewed stability within the organization. Having served as a non-executive director at Exxaro and as chairman of its investment committee, Magara is well-versed in the company’s ongoing initiatives and future plans.
In his initial statements upon taking office, Magara reaffirmed Exxaro’s commitment to its diversification strategy. He aims to utilize the company’s coal production as a means to broaden its portfolio into vital low-carbon minerals which are increasingly in demand globally. "This aligns with our diversification strategy, a plan I have heavily contributed to in my previous role," Magara stated.
Focused Diversification Strategy
This approach is not merely about expanding Exxaro’s operational scope but also emphasizes delivering long-term value to stakeholders while maintaining a balance between profitability and environmental sustainability. During his tenure at Lonmin, followed by his role at Africa Mining & Metals Group—focused on battery and precious metals—Magara developed insights that will inform Exxaro’s direction.
Chairman Geoffrey Qhena praised Magara’s extensive experience in the mining sector, highlighting his expertise as an engineer and corporate leader. He noted that Magara’s leadership comes at a pivotal time as Exxaro accelerates its transition into a mixed minerals and renewable energy solutions firm.
Financial Insights and Shareholder Considerations
The recommitment to the diversification strategy brings clarity but may dampen shareholder expectations for immediate financial returns, such as special dividends. Instead, Exxaro has announced a R1.2 billion buyback program aimed at using the cash reserves it has accumulated, which reached R16.3 billion as of year-end 2023. This approach not only rewards shareholders but also reaffirms the company’s solid financial footing.
Despite reporting a 36% decline in headline earnings to R7.3 billion due to dropping export coal prices, Exxaro’s dividend distribution has remained robust, particularly bolstered by a 10% increase in dividends received from Kumba Iron Ore, thanks to the firm’s 20% stake in the operating company Sishen Iron Ore Company (SIOC).
Looking Ahead: Strategic Goals for Exxaro
Magara inherits a company poised for transformation. With earlier reports indicating a potential allocation of up to R15 billion for acquisitions, the new CEO’s strategic vision will be critical. As part of his commitment to the company’s empowerment status, Eyesizwe, a founding black-owned shareholder, will waive any liquidation options on its investments until 2027, thereby reinforcing Exxaro’s empowerment standing at 30.81%.
Exxaro has set conservative goals but remains adaptive to market conditions that challenge traditional operations. The ongoing pursuit of low-carbon minerals and other alternative investments is indicative of a forward-thinking approach that resonates with global sustainability trends.
With Magara at the helm, Exxaro Resources looks to stabilize and innovate, responding adeptly to shifts in market demand while ensuring continued profitability and commitment to environmental responsibility—a blend essential for navigating the complexities of today’s mining landscape.