Exxaro Profit Down 20%: Solar Power Growth

South African miner Exxaro Resources posted a fall in its half-yearly earnings per share by 20%, in spite of growing coal production and its efforts in the renewable energy sphere.

Earnings per share of Exxaro Resources decreased to R13.77 ($0.855) in the six months ended June 30, 2026, compared to R17.24 reported in the year before.

Higher production costs, appreciation of the South African currency and reduction in equity-accounted profits affected the results.

Exxaro Profit Dropped Even as Coal Production Rose

The poorer earnings for Exxaro were in spite of the following positive factors in its business.

The miner saw an increase of 7% in group revenues year on year to R22.1 billion, as a result of better operational deliveries.

Coal production grew 11% to 21.5 million metric tons, and exports rose 15% to 3.9 million tons due to improved logistics.

The firm’s interim dividend was cut by 17% to R7.00 per share from last year’s dividend payment.

Pressure on Operating Costs of South African Mining Company

The performance of the company highlights the cost pressures on South African mining firms.

The appreciation of the rand lowered the value of some of the income earned by the firm after translation to the firm’s operating environment; rising production costs added to the pressure.

Lower equity-accounted income also helped cause the lower headline earnings.

However, the improvements in coal production and exports indicate that Exxaro’s mining activities were doing reasonably well during the first half of the year.

Renewable Energy Investments in Exxaro

Even as coal plays a central role in the operations of Exxaro, the firm is increasing investment in renewable energy in an attempt to cut costs and prepare for the energy transition.

Part of the move is the construction of the 68 MW Lephalale solar plant via Exxaro’s Cennergi renewable energy operation.

The solar plant provides electricity to the Grootegeluk coal mine of the firm and has lowered the mine’s reliance on the national grid by about 30%.

Objective of the Solar Plant: To Reduce R100 Million Per Year Expenses

In addition to cutting carbon emissions, the Lephalale solar project also has the objective of saving money for Exxaro.

It is supposed to provide a reduction of about R100 million per year in expenses for the Grootegeluk mine regarding electricity consumption.

Moreover, the reduced dependence on electricity produced on the grid might also guarantee protection from increased costs and potential disruptions in the electricity supply.

Hence, the production of renewable energy can be quite beneficial for controlling expenses in the mining company that uses significant amounts of electricity.

Objective of the Exxaro Decarbonization Plan: 1.6 GW of Renewable Energy Capacities

But the strategy of using renewable energy sources is not the only one of Exxaro for the future.

The company is planning to have 1.6 gigawatts of renewable energy capacity by 2030.

The goal corresponds to general trends in the South African mining sector, which is becoming more interested in the use of renewable energy sources due to decreasing electricity costs and carbon emissions.

Interpretation of the Performance of Exxaro in the Mining Industry

The performance of Exxaro has shown the mixed pressures that the South African mining industry faces.

Despite the growth in coal mining, there have been issues including cost increases and currency movements that reduced the profitability of the company. However, the importance of renewable energy has grown as companies look for ways of keeping electricity costs low while reducing their carbon emissions.

It is in this sense that the growth of solar energy in Exxaro may be important.