Exxaro diversifies with $640M in manganese mines

South African coal miner Exxaro Resources (JSE: EXX) has struck a 11.7-billion rand (US$640 million) deal to acquire controlling stakes in two key manganese mines, marking a major step in its shift towards critical minerals.

The move, announced Tuesday, gives Exxaro majority ownership of the Tshipi Borwa and Mokala mines in South Africa’s Kalahari Manganese Field —home to the world’s largest land-based manganese deposit, with over 4.2 billion tonnes of exploitable high-grade ore. Both mines have long-term contracts with customers in China and India, where Exxaro already sells coal. 

Exxaro is to hold 60% of Tshipi and 51% of Mokala. Tshipi, the country’s largest manganese mine and top ore exporter, has the capacity to produce up to 3.5 million tonnes of manganese ore annually.

Mokala can produce as much as 1.5 million tonnes per year and is currently operated by a Glencore (LSE: GLEN) affiliate, which owns the remaining 49% stake. Glencore holds various rights, including the option to sell its share to Exxaro. The final transaction value could reach up to 14.6 billion rand.

Strategic foothold

Exxaro gains a strategic foothold in manganese—used mainly in steelmaking and increasingly in lithium-ion batteries for electric vehicles. South Africa, the world’s largest manganese producer, accounts for about a third of the 20 million tonnes of annual global output. The deal is expected to close by early 2026.

Exxaro CEO Ben Magara, who took the helm in April, said the acquisition aligns with the company’s push into “future-facing minerals” while reaffirming its commitment to coal. “Coal remains a priority for us and vital to South Africa’s economy and energy needs,” he said.

Exxaro has been expanding beyond coal over the past two years, with moves into iron ore and renewable energy. It has also targeted copper, but it lost a bid for Botswana’s Khoemacau mine to Chinese miner MMG.

Shares in Exxaro Resources closed flat in Johannesburg on Tuesday at 147 rand apiece, valuing the company at 51.4 billion rand. 

South Africa, Gabon and Australia account for more than two-thirds of the world’s manganese production.