PUSHING THE LIMITS exploring boundaries LEADING www.exxaro.com PERFORMANCE Statutory annual report In November 2006, Kumba remainder of 2006. This is a Resources unbundled its iron statutory annual report in ore business and moulded two terms of JSE Listings separate focused mining Requirements, with certain groups — Exxaro Resources and supplementary information Kumba Iron Ore — listed on the included to set out the JSE Limited in the general principles and practices that mining sector. This heralded will guide Exxaro, and provide the finalisation of South an overview of the significant Africa’s largest and most projects under way that will significant black economic entrench the group as a CCoaloal empowerment transaction in formidable force in the global the mining industry in mining sector as its robust particular and the South project pipeline begins to African industry in general. unfold. As part of the transaction, Our 2007 annual report will be Group at a glance 1 Kumba Resources’ name was a full triple bottom-line report changed to Exxaro after the to stakeholders, encompassing Exxaro’s geographical locations 2 merging of Kumba’s non-iron economic, social and Group shareholder structure 3 ore assets and the assets of environmental performance. MinerMineralal Summary of business operations 4 Eyesizwe Coal, thereby forming a new-era South African group. For a full understanding of the Sands Group review at a glance 10 empowerment transaction, Business objectives 14 This annual report outlines the readers are referred to the Chief executive officer’s review 15 performance of Kumba Exxaro revised listing Resources for the 10 months particulars published on Exxaro Resources — Directorate 38 to end of October 2006 and its 9 October 2006, and available Exxaro Resources — Executive committee 40 performance as Exxaro for the on www.exxaro.com. BBasease Kumba Resources — Directorate 43 MeMetalstals && Administration and shareholders’ diary 44 Highlights Corporate governance 45 IndusIndustrialtrial • Historic empowerment transaction successfully Group cash value added statement 52 MinerMineralsals Supplementary information 53 concluded Selected group financial data 56 • Earnings not comparable Definitions 58 • Good operating results Group annual financial statements 61 •Coal production reaches 24 million tonnes Notice of annual general meeting 196 • Strong project pipeline for transformed group Short biographies for Exxaro directors • Options to acquire Namakwa Sands and a 26% up for re-election 200 interest in Black Mountain/Gamsberg exercised Shareholders’ analysis 203 Form of proxy post December 2006 Contents GRAPHICOR 36120 Statutory annual report In November 2006, Kumba remainder of 2006. This is a Resources unbundled its iron statutory annual report in ore business and moulded two terms of JSE Listings separate focused mining Requirements, with certain groups — Exxaro Resources and supplementary information Kumba Iron Ore — listed on the included to set out the JSE Limited in the general principles and practices that mining sector. This heralded will guide Exxaro, and provide the finalisation of South an overview of the significant Africa’s largest and most projects under way that will significant black economic entrench the group as a CCoaloal empowerment transaction in formidable force in the global the mining industry in mining sector as its robust particular and the South project pipeline begins to African industry in general. unfold. As part of the transaction, Our 2007 annual report will be Group at a glance 1 Kumba Resources’ name was a full triple bottom-line report changed to Exxaro after the to stakeholders, encompassing Exxaro’s geographical locations 2 merging of Kumba’s non-iron economic, social and Group shareholder structure 3 ore assets and the assets of environmental performance. MinerMineralal Summary of business operations 4 Eyesizwe Coal, thereby forming a new-era South African group. For a full understanding of the Sands Group review at a glance 10 empowerment transaction, Business objectives 14 This annual report outlines the readers are referred to the Chief executive officer’s review 15 performance of Kumba Exxaro revised listing Resources for the 10 months particulars published on Exxaro Resources — Directorate 38 to end of October 2006 and its 9 October 2006, and available Exxaro Resources — Executive committee 40 performance as Exxaro for the on www.exxaro.com. BBasease Kumba Resources — Directorate 43 MeMetalstals && Administration and shareholders’ diary 44 Highlights Corporate governance 45 IndusIndustrialtrial • Historic empowerment transaction successfully Group cash value added statement 52 MinerMineralsals Supplementary information 53 concluded Selected group financial data 56 • Earnings not comparable Definitions 58 • Good operating results Group annual financial statements 61 •Coal production reaches 24 million tonnes Notice of annual general meeting 196 • Strong project pipeline for transformed group Short biographies for Exxaro directors • Options to acquire Namakwa Sands and a 26% up for re-election 200 interest in Black Mountain/Gamsberg exercised Shareholders’ analysis 203 Form of proxy post December 2006 Contents GRAPHICOR 36120 PUSHING THE LIMITS exploring boundaries LEADING www.exxaro.com PERFORMANCE Group at a glance Exxaro is the largest South African-based diversified resources group, with interests in the coal, mineral sands, base metals, industrial minerals and iron ore commodities. Collectively, seven coal mines produce 42,7Mtpa of thermal, metallurgical and coking coal, most of which OPEN-PIT UNDERGROUND is thermal coal for consumption by the national power • Grootegeluk • Arnot utility, Eskom. Grootegeluk is one of the lowest-cost • Matla and most efficient mining operations in the world, • Leeuwpan • North Block and operates the world’s largest coal beneficiation Complex (NBC) complex. • New Clydesdale • Tshikondeni The South African mineral sands operations are housed in KZN Sands, while those abroad reside in Australia Sands where the principal asset is a 50% share in the • KZN Sands Tiwest joint venture with Tronox Inc. The KZN Sands • Tiwest Joint Venture 50% operation is based near Empangeni in KwaZulu-Natal and uses innovative techniques. Once the acquisition of the Namakwa Sands operation on the Western Cape west coast is finalised, Exxaro will be one of the world’s largest suppliers of titanium dioxide feedstock and zircon. The Rosh Pinah zinc/lead mine in southern Namibia • Zincor and the Zincor refinery in Gauteng make up one of the few integrated zinc mining and refinery operations •Rosh Pinah (Namibia) 89,5% in the world. The Zincor electrolytic refinery is also • Glen Douglas one of the lowest-cost producers of zinc metal in the global market place. Exxaro also has an interest in •FerroAlloys the Chifeng zinc smelter in China. A dedicated plant • Chifeng (China) 31,9% in Pretoria manufactures high-quality atomised ferrosilicon while Glen Douglas dolomite quarry provides a range of products to steelworks and other * Exxaro holds 100% unless otherwise indicated consumers. Iron ore Exxaro holds 20% of Sishen Iron Ore Company (Pty) Limited. The company operates Sishen and Thabazimbi mines, producing some 31Mtpa of lumpy and fine iron ore, two-thirds of which is exported. Sishen is one of the largest single open-pit mines in the world, known for its high grade and consistent product quality. exxaro annual report page 1 Exxaro’s geographical locations COAL 1Grootegeluk 2Leeuwpan 3 Arnot 4Matla 5North Block Complex (NBC) 6New Clydesdale 7Tshikondeni 8Belfast 9 Mmamabula Central 10 Eerstelingsfontein 11 Inyanda 12 Moranbah South 13 Mafube 14 RBCT Phase V MINERAL SANDS 15 KZN Sands 16 Toliara Sands 17 Namakwa Sands 18 Australia Sands BASE METALS AND INDUSTRIAL MINERALS 19 Chifeng NFC Hongye Zinc Refinery 20 Rosh Pinah 21 Zincor 22 Glen Douglas 23 FerroAlloys 24 Black Mountain 9 7 1 Namibia 20 MPUMALANGA 24 14 15 23 3 Middelburg South Africa 8 21 14 Witbank 6 10 22 11 5 GAUTENG 4 17 2 13 Operations Growth projects Representative offices page 2 exxaro annual report Group shareholder structure Eyesizwe Eyabantu Tiso BEE IDC* SPV* SPV* SPV* Women’s SPV* 15% 55% 9,5% 9,5% 11% Exxaro Anglo BEE Minorities American plc* Holdco* EEPS* 53,1% 3% 23,7% 20,2% 100% 100% 100% 20% SISHEN IRON ORE COAL SANDS BASE METALS & INDUSTRIAL MINERALS * Refer to definition of shareholders as published in the Exxaro revised listing particulars on 9 October 2006, and available on www.exxaro.com exxaro annual report page 3 Summary of business operations 12 months ended 12 months ended 31 December 30 June ’000 tonnes 2006 2005 2004 2003 2003 2002 IRON ORE Production Sishen1 28 692 28 458 27 609 27 110 26 168 25 903 Thabazimbi1 2 418 2 529 2 503 2 484 2 389 2 421 Total 31 110 30 987 30 112 29 594 28 557 28 324 Sales Export1 21 495 22 113 20 923 20 446 20 946 19 916 COKING COAL Production Grootegeluk 2 133 1 859 1 972 1 781 1 830 1 670 Tshikondeni 363 414 437 381 377 404 Total 2 496 2 273 2 409 2 162 2 207 2 074 THERMAL COAL (Eskom) Production2 34 599 14 573 14 383 13 869 13 036 13 351 Sales to Eskom2 34 665 14 703 14 356 14 097 13 051 13 198 THERMAL/ METALLURGICAL COAL Production Grootegeluk 1 585 1 551 1 403 1 323 1 313 1 194 Leeuwpan 1 504 1 442 1 249 1 610 1 456 1 631 New Clydesdale2 1 107 North block complex2 469 Total 4 665 2 993 2 652 2 933 2 769 2 825 1 Included in the 2006 figures is 12 months information for comparative purposes. 2 Physical information includes Eyesizwe Coal mines