(Reuters) -South African miner Exxaro Resources is considering boosting shareholder returns once it completes a deal announced in May to buy manganese assets as it will no longer require a big cash buffer to fund acquisitions, its CEO said on Thursday.
Its shares jumped 9% after the diversified resource company, which seeks to add critical minerals such as manganese to its coal, iron ore and renewable energy portfolio, also reported a 13% increase in half-year profit thanks to higher coal income.
The company said on May 13 it had reached an agreement to acquire manganese mines held by Ntsimbintle Holdings and OM Holdings in South Africa as part of its strategy to diversify away from coal into minerals vital for the global shift to cleaner energy technologies.
CEO Ben Magara said the final transaction price is expected to range between 9 billion and 14.64 billion rand ($507 million- $825 million), depending on the extent to which minority shareholders exercise their pre‑emptive and tag‑along rights.
Following the manganese deal, he said Exxaro would no longer require a 12 billion to 15 billion rand cash buffer it had maintained to fund acquisitions.
“So we are now reviewing our capital allocation framework to enhance shareholder returns, post the manganese transaction,” Magara told Reuters.
Finance director Riaan Koppeschaar said higher dividends were among the options to be considered.
“We still need to wait for the manganese transaction, the final numbers, before we can take final decisions on that,” Koppeschaar said during a results call. Exxaro expects to conclude the transaction during the first quarter of 2026.
Exxaro posted headline earnings per share of 17.24 rand in the six months to June 30, compared to 15.28 rand during the same period last year.
It declared an interim dividend of 8.43 rand per share, an increase of 6% on last year’s interim payout.
Exxaro closed the half-year with a 12.4 billion rand cash pile.
While the miner was still exploring other critical metal asset acquisitions, it did not expect to pursue transactions as big as the manganese deal, Magara added.
($1 = 17.7063 rand)
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(Reporting by Nelson Banya; Editing by Himani Sarkar and Emelia Sithole-Matarise)
