FFF Waterberg Coal ConferenceThe future of mining – an Exxaro perspectiveErnst Venter – Executive Head: Growth, Technology, Projects, Services and Ferrous

15 October 2014

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Disclaimer 2

This audio-visual presentation and related communication represents Exxaro’s view of the future

resources industry. It also indicates possible technologies that might be applied in the industry to

overcomes future challenges that may be applicable during such envisaged time in the future. This

audio-visual presentation however, does not reflect Exxaro’s current technologies. It does further

not imply that these technologies will be employed by Exxaro in the future. Exxaro does also not

imply that the future will be constructed in the fashion as indicated herein. Exxaro will not be held

liable for any current or future claims or losses based on the depicted representations made herein.

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Our business philosophy and strategy 3

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Exxaro Group 4

OWNER-CONTROLLED OPERATIONS NON-CONTROLLED OPERATIONS

Enabled by human resources, sustainable development and innovation

Coal

• Third largest coal producer in RSA

• Three tied operations• Six commercial operations• Acquisition of TCSA*• GMEP** commissioned

Ferrous

• Mayoko Project• AlloyStream™ project• FerroAlloys

Energy

• Underground coal gasification

• 19,98% in SIOC##• 44,18% in Tronox• 26% in Black Mountain• 50:50 JV^ :Mafube JV

with Anglo• Cennergi JV with Tata

Power

• Secure supply to Eskom • Increase domestic supply• Manage mines in closure

responsibly• Increase exports• Increase productivity• Optimise the operating

model

• Review Mayoko Project • Review alloy business • Apply UHDMS# in lower

grade iron ore beneficiation

• Explore and integrate opportunities in Africa’s energy markets

• Manage emerging carbon related risks

• Maintain SIOC investment

• Analyse and review the long-term fundamentals of the titanium dioxide industry

• Divest from Black Mountain and Chifeng

* Total Coal South Africa Pty Ltd ** Grootegeluk Medupi Expansion Project #Ultra high dense medium separation ## Sishen Iron Ore Company Pty Ltd ^ Joint venture

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Source: Promethium Carbon 2006

5Climate change

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6More from less

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Sustainability is the single biggest business opportunity of 21st century…it will be the next source of competitive advantage.

~ Lee Scott Wal-Mart CEO

Sustainability 7

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Urbanisation 8

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Epochal shift in economic power occurring 9

“Chindia” - Almost half the global economy by 2050

2004 2025 2050China + India = 6% 20% 45%

US = 28% 27% 26%

EU = 34% 25% 15%

Japan = 12% 7% 4%

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The next game changers 10

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Smart and nano technology 11

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Connectivity

80 BILLION CONNECTED

DEVICES BY 2020

• 10 Connected devices for every household by 2020.

• 5 Connected devices for every user by 2020.

• 5 billion internet users by 2020.

• 500 devices with unique digital IDs (Internet of things) per square kilometre by 2020.

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Innovating to Zero 13

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Increased life expectancy 14

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Global trends Resources 15

Sustainability

Mega Regions

Massive infrastructure budgets by governmentMega consumption

of steel, copper, iron ore & coal

Competition for skills

Intelligent machinery and

equipment

Fully automated and integrated

mines

Coal to Liquids & Power Plants

Niche markets & stable income streams

Market char & coke

GeographyCommodity

Reduce geopolitical risk

Mega-energy projects

Diversified energy mix- renewable & nuclear

Increased coal consumption

Massive production of automobiles, appliances

Integrated economies

Modern transportation solutions

Intelligent logistics and transportation systems

Social license to operate

Energy and water efficient technologies

Demand for electricity,

housing, roads & water

Environment, health & safety issues

Human Capital Impacts

Remote Controlled Operations

Urbanisation

lndustrialisationEnergy

Diversification

Beneficiation

Mega Corridors

Mega Cities

Technology

New Business Models

Infrastructure

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Global and local challenges Resources

Source: Exxaro Strategy Analysis and Analysts Reports

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Steel (iron ore, coking coal, manganese)Base metals (Al, Cu, Zn, Ni, Pb, Sn)Steam coalIndustrial minerals(TiO2, zircon)

Light metals (Al, Ti, Mg)Base metals (Cu)Uranium, ThoriumRare Earths and Metals (incl PGMs)Nano-materialsIndustrial mineralsCarbonComposite materials

Organically produced materialsMemory materialsMolecular engineeringSci-fi materials and energy*

Gradual and overlapping evolution

* An acknowledged source for foresight thinking

The result - envisaged commodity life cycles 17

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Exxaro’s NXXT journey

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STREAM 1World in 2030

Global “DRIVERS”

STREAM 2Resource Industry 2030

Industry “DRIVERS”

STREAM 3Exxaro NEXT Program 2030

Exxaro “ STRATEGIC THRUSTS”

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Characteristics of the future resources extraction industry

1. Sustainable License to Operate (LTO):• Creating inclusive wealth-all

Stakeholders• Balanced and sustainable partnership

between government, community and resources industry

• Small footprint / limited environmental impact

• Self-sustaining economically viable community > Beyond a Life of Mine (LOM)

2. Smart Exploration: Accurate, predictable, instant, information and models

3. 100% resource extraction4. Zero Waste5. Zero Harm - safety/health6. Energy, carbon and water neutral7. Workforce equipped to support the 2030

business8. Hybrid/renewable/alternative energy

solutions9. Capitalise on trend of advanced / light

Materials /Metals 10.Integrated, optimised and redefined value

chain

203020131. Increasing Shareholder expectations

(Profits)2. Extreme escalation in operating costs 3. Rapid Technological Innovation i.e.

IT/Com’s..4. Increased pressure on Social and

Regulatory Compliance. 5. Un-balanced relationship between

government, community and mining.6. Current core processes are sub-optimized

(exploration, geology, mining processing and logistics)

7. High levels of waste and discard materials from production.

8. High Impact on Environment and in-sufficient Rehabilitation

9. Fossil Fuel based Economy / Carbon Emissions

10. Energy Supply / Cost constraints11. Limited focus on downstream beneficiation 12. Current workforce ill-equipped for the

future (High levels of semi-skilled employees and shortage of highly skilled employees)

13. Communities dependant on Mining Activities

Smart Exploration

New Mining Technologies

New Processing Technologies

Asset Management/Logistics

Clean Coal Technologies

Innovation to Zero Harm

Social Responsibility

Sustainable Energy

Automation

Integrate/Redefine Value Chain

10 Strategic Thrusts 2030

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Thrust 1: Smart exploration 20

Next generation geo-physics technologies

Will make geology more effective and accurate, reducing costs, increasing yields and enabling full extraction of the reserve’s potential.

Next generation drilling technologies

• Sonic Drilling• Intense vibration/liquefaction• Automated resonance

(waterless and energy efficient)

• Oil & Gas industry technologies applied in exploration drilling

• Automated, multidirectional drilling

• Real-time ore characterisation influencing drill plan in real-time

• Integrated geological, mining, environmental and survey data for improved interpretation of geological conditions

Drone exploration

• Solar powered drones can fly for long durations without major maintenance

• UAVs can be fitted with magnetometers or multispectral equipment.

Titan Aerospace DroneGeometallurgy

Integration of geology and metallurgy data for optimum plant design.

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Thrust 2: New mining technologies 21

Autonomous hauling

Trucks are controlled entirely using a supervisory computer at an operations centre, contributing to surface collision avoidance, fuel savings, increased safety, less maintenance and uninterrupted production.

In-pit crushing and beneficiation

Eliminates truck haulage.Less sensitive to commodity prices.Less dependant on human factor. Reduce operating costs.Increase productivity.Improve safety.Reduce environmental impact.

Fully autonomous mining

• Geology to market data used to integrate planning and control for effective resource and asset management.

• Selective mining will allow optimal extraction of the reserve and in turn realise less waste.

• New blasting technologies. • Wireless equipment.

Minestar Automation by CAT

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Thrust 3: New processing technologies 22

AlloyStreamTM

• In-house developed technology to process certain alloys at lower costs and with lower feed grades than conventional furnaces.

• Patented and tested for commercial viability in 2012/2013.

Fines processing

Utilisation of fines in power stations and reductantsmarkets through briquetting/agglomeration of fines material.

Ultra High Dense Medium Separation (UHDMS)

In-house developed technology enabling iron ore separation at RD >4. Project is in demonstration phase

Dry processing

• Waterless processing offers significant environmental and cost benefits in a water scarce future scenario.

• For slimes handling, drying technology, paste technology, electro-kinetic drying, absorbent polymers and hgh density slurry pumping.

Continuous surface miner

• Extract, crush and load material in one continuous process.

• Selective mining of coal and interburden results in:

• Increased calorific value and lower ash contents.

• Improved ROM quality • Reduced processing effort• Reduced volume of overburden

Thrust 4: Asset management/logistics

Inland blending facilities

• Cost effective distribution inter-modal transportation model and allocation decisions.

• Minimise total logistics costs, procurement cost, shipping cost, and inland delivery cost

• Blending of products according to customer needs (VIU).

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Extrasensory Augmented Reality

Augmented Reality is an information layer superimposed on interpreted reality. Extrasensory is senses beyond human capability such as thermography, chemical imaging, sonar, radar, magnetic induction etc.

Physical Asset Management

The Physical Asset Management System enables and manages activities that maximise the value of our Assets. In making the management system scalable, flexible, automated, integrated and present we optimize personnel productivity, as well as Asset reliability, costs and compliance in their intended functional performance.

Thrust 5: Clean coal technologies

Fluidised bed combustion

• Suspend solid fuels in upward-blowing jets of air during the combustion process.

• Provides more effective chemical reactions and heat transfer

• Suited to burning fuels that are difficult to ignite such as high ash coals and coal mine wastes, and fuels with highly variable heat content, including biomass

– Waste stream and Dried tailings are suitable sources for this power generation methodology.

Outotec – FBC Facility

Gasification plant

A refinery process to convert gas into longer-chain hydrocarbons such as gasoline or diesel fuel. Methane from UCG could be converted by gas synthesis, Fisher-Tropsch process and cracking.

• Underground coal gasification• Carbon sequestration• Energy from Coal Waste (CFB)• Coal Bed Methane• Energy generation from low grade coal• Biofuels

Other technologies

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Clean Coal : Integrate/redefine the value chain

UCG

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Continuous rehabilitation-restoration

• Restoration planning from core logging to design to ensure optimal material usage.

• Continuous restoration during operation activities.

• Minimal Impact and Liability• More efficient mine closure

Thrust 6: Innovation to zero …….harm 26

Floating/constructed wetlands

• Man-made ecosystem• Provides an efficient, natural way

to improve water quality and buffer habitats against surges in nutrients and pollution.

Fatigue sensors

• Installed in equipment - can detect fatigue levels of the operator then sound an alarm or immobilise equipment if it is safe to do so.

• Collision avoidance and proximity detection systems.

• New technology will make the re-processing of waste economically viable

• Unlock value inside what is currently regarded as waste.

• Open up new revenue streams,• Lower environmental liability • Increase life of mine.

Waste re processing

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Thrust 7: Social responsibility 27

Social License to operateCommunity involvement

Environment:environment stewardship-backfilling & mine closure

Water & energy consumption

Energy efficient equipment

Health & SafetyCompliance with health & safety

regulations

Source: Frost & Sullivan

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Thrust 8: Sustainable energy 28

Modular Thorium Nuclear

• Could support electricity needs of remote locations as they are usually small and highly variable, can operate for 4 years without refuelling and can be combined into a power station of any size.

• Technology in demonstration phase. • Construction times estimated to be around 3 years.

Biomass

• Fuel production for remote operations.

• Plantations combat soil degradation and deforestation

• Employment opportunities • Downstream processes

(flooring, furniture ) beyond LOM.

• Carbon sequestration.

Co-generation

Generate electricity using off-gases, excess heat and other waste energy streams in the value chain to reduce energy costs and ensure security of supply.

Renewable Energy

• Wind / Solar

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Thrust 8 cont: Sustainable energy 29

Skyfuel’s CSP Technology

Concentrated solar power

• For thermal energy and base load using molten salt storage

• It is the highest performance, lowest-cost utility-scale solar power system in the world

• Smooth and Predicable Output• Solar Carports pay back 5 years

Hybrid energy - Smartgrids

• Modernised electrical grid automated to improve the efficiency, reliability, flexibility, economics, production and distribution of electricity through load adjustment

• Next-generation transmission and distribution infrastructure will be better able to handle bi-direction energy flows

• Suitable for remote areas

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Thrust 9: Automation 30

Integrated and automated management control centre

Effective integration of management information offers benefits such as integrated mine planning and execution, warehouse and workshop automation, real-time online monitoring of assets And wifi availability throughout the business.

Robotic sampling plants

Automated sample preparation. All processes including sample dividing and splitting, crushing and pulverising, density measurement, sieve analysis, moisture analysis, building of composites for subsequent fusion and XRF analysis.

Virtual training, modelling and simulation

• Visual modelling of new operations facilitates buy-in from local communities and governments and License to Operate, assists with mine and environmental planning, supports safety and operational activities.

• Simulating new concepts and plans

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Nano-materials

• Carbon nanotubes and Graphene are lighter, stronger than stainless steel and titanium and have a reported intrinsic superconductivity greater than copper cable.

• Mitshibushi Royan Resin – BMA .

UCG

• New mining method redefining the value chain. • nvolves horizontal drilling into a coal seam, oxygen

injection and ignition of the seam which acts as a gasifier.

• Syngas used in power generation or to produce gas to liquid fuels.

• Exxaro is in a JV with Linc Energy to evaluate development of UCG applications in Southern Africa.3-D printing

• The process of making a three-dimensional solid object of virtually any shape from a digital model using an additive process.

• Metal alloys, stainless steel, aluminium, photopolymers and thermoplastics can be used.

• Graphene (Carbon nanotubes) already printed.

• Downstream industries such as electronics will be a major market in the future.

Thrust 10: Integrate/redefine the value chain

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Exxaro’s vision of the future 32

“Tweaking existing processes cannot deliver the massive shifts mining companies need in today’s capital-constrained environment. To build true competitive advantage, companies must look beyond incremental performance improvement to determine how they can revise their systems to embrace the broad theme of innovation.”

~ Jürgen Beier, Mining Leader, Canada

‘Exxaro will be required to enhance its internal innovation and project

execution capabilities in the coming years in

order to meet shareholder

expectations’ ~ Sipho Nkosi

The challenge - innovate to remain relevant 33

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Strive for a balanced portfolio...

Exp

ecte

d B

usin

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Impa

ctLevel of Innovation

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In summary – future resources industry characteristics

1. Sustainabale License to Operate (LTO):• Creating inclusive wealth-all Stakeholders• Balanced and sustainable partnership between

government, community and resources industry

• Small footprint / limited environmental impact• Self-sustaining economically viable community

> Beyond a Life of Mine (LOM)2. Smart Exploration: Accurate, predictable, instant,

information and models3. 100% resource extraction4. Zero Waste5. Zero Harm - safety/health6. Energy, carbon and water neutral7. Workforce equipped to support the 2030

business8. Hybrid/renewable/alternative energy solutions9. Capitalise on trend of advanced / light Materials

/Metals 10. Integrated, optimised and redefined value chain

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