Exxaro Eyes Manganese Expansion Amid Diversification Drive

Exxaro Resources, one of South Africa’s leading coal producers, has set its sights on becoming a major player in the country’s manganese mining industry. The move is part of a broader strategy to diversify its operations and capitalize on growing demand for the metal, particularly in the electric vehicle and renewable energy sectors.

CEO Nombasa Tsengwa revealed the company’s ambitions at a recent industry event, highlighting the potential for manganese to drive significant growth. South Africa is the world’s largest exporter of mid- to high-grade manganese ores, which are primarily used in steelmaking.

While Exxaro doesn’t currently own any manganese mines, it has expressed interest in acquiring existing projects or undertaking exploration efforts. The company is eyeing opportunities in the Northern Cape province, where several major players, including South32, Anglo American, and African Rainbow Minerals, have established joint ventures.

Tsengwa emphasized the importance of a South African champion in the manganese industry, stating that Exxaro aims to acquire “a very good asset or two” and actively explore for new deposits.

The steel industry remains the primary consumer of manganese, accounting for 93% of global demand. However, the growing adoption of electric vehicles and other renewable energy technologies is expected to significantly boost consumption in the coming years. According to Tanisha Schultz, a senior research analyst at Project Blue, batteries will triple their share of manganese consumption to more than 7% by 2040.

Exxaro, which was founded in 2006, has already diversified into clean power projects, including wind farms. The company is also keen to expand its presence in the copper market, driven by the increasing demand for the metal in electric vehicles, artificial intelligence, and renewable energy applications.

Last year, Exxaro was shortlisted to acquire the Khoemacau copper mine in Botswana but was ultimately outbid by China’s MMG. Despite this setback, Tsengwa expressed the company’s continued interest in copper mining, although she acknowledged the need for partnerships to make such investments viable.

Exxaro remains a significant supplier of coal to Eskom, South Africa’s state-owned power utility. The company sold nearly 41 million tons of coal last year, with approximately 13% exported. While Exxaro has the capacity to export up to 10 million tons annually, the poor performance of Transnet SOC Ltd, the state-owned rail and freight operator, has hindered its ability to fully capitalize on this opportunity.