FINANCE DIRECTOR S 1H14 PRE-CLOSE MESSAGE. To our stakeholders

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1 EXXARO RESOURCES LIMITED Incorporated in the Republic of South Africa (Registration Number: 2000/011076/06) JSE share code: EXX ISIN: ZAE ADR code: EXXAY ( Exxaro ) FINANCE DIRECTOR S 1H14 PRE-CLOSE MESSAGE To our stakeholders In preparation for the financial closed period commencing on 30 June 2014, the analysis below applies to the six-month period ending 30 June 2014 compared to the corresponding period ended 30 June 2013, unless where specifically referred to. Stable financial and operational results are expected in our Coal business and equityaccounted investments. The 1H14 Coal business net operating profit guidance provided in the SENS announcement dated 24 June 2014, excludes the impact of the outcome of any possible settlement with Eskom on the current Medupi Power Station construction delay offtake engagement discussions. As communicated on 24 June 2014, the impact of the impairment loss due to the write-down of Exxaro s Mayoko Project in the Ferrous business will be a pre-tax write-off of a maximum amount of the total of the original acquisition cost of the company s investment in the Mayoko Project as well as the project related costs capitalised to date amounting to R5 362 million in total. Exxaro will advise on the final number as soon as the final calculations have been completed. We will provide a detailed account of the first half s performance (including guidance on corporate costs as well as the remaining operations (e.g. Alloys and Zincor)) when we announce our interim financial results on 21 August As such, in the report here-in attached, focus has been placed on our owner-managed coal operations. Yours sincerely Wim de Klerk Finance Director

2 COAL COMMODITY REVIEW 1 PRODUCTION AND SALES VOLUMES Production volumes for 1H14 are expected to be marginally lower than 2H13 due to lower off-take from Matimba resulting in Grootegeluk cutting back production due to full stockpiles, production interruptions at Matla, lower production at Inyanda and cessation of production at the New Clydesdale Colliery (NCC). However, in comparison to 1H13, production volumes are expected to be marginally higher, mainly due to increases at Matla, Grootegeluk and Leeuwpan. Local metallurgical coal sales volumes at Grootegeluk are expected to increase slightly from 2H13, while export sales volumes are expected to increase from both 2H13 and 1H13 due to improved allocation of export trains from TransnetFreightRail (TFR). Thermal coal export sales volumes are expected to be in line with 2H13 but are higher than 1H13 due to higher buy-in volumes. Therefore, total expected FY14 export volumes are estimated to be higher than the previously guided 4,5 million tonnes (Mt). Sales to Eskom are expected to be lower than 2H13 mainly due to fewer units running at Matimba and production difficulties at Matla. However, Eskom sales volumes are expected to remain stable in comparison to 1H13. 2 LOGISTICS The TFR rail rate was at 60,6Mt until May 2014, including the force majeure event in February 2014 and the annual TFR shut in May. Exxaro is expected to be at 100% of its available RBCT entitlement by the end of 1H14. 3 MARKETS Demand in international coal markets is generally holding up well amidst the global drive for energy efficiency and energy mix changes required by various countries. Both global thermal and metallurgical markets are however oversupplied and some of the supply side factors are structural. This may even prolong the current imbalance between supply and demand, and pricing is forecasted to be generally flat for the rest of the year. Domestic demand for thermal coal in 1H14 is expected to end slightly lower than 1H13. In the Domestic coal market segment Eskom demand is stable. The demand from the Metals, Domestic steam and Reductants segments is robust and remains a core focus area for the Coal business.

3 4 PROJECTS UPDATE 4.1 GMEP PROGRESS UPDATE Following the delay to date in the construction of the Medupi Power Station, Exxaro and Eskom continue to engage in order to reach an amicable agreement regarding a new ramp-up profile in terms of the Medupi coal supply agreement (CSA) based on the principle that Exxaro will remain value neutral: During January 2014 Eskom formally notified Exxaro that it would not be able to commence off-take from 1 February 2014 as agreed in the CSA due to construction delays. Subsequently, due to the excessive rainfall experienced during March 2014, a force majeure was declared. The terms and conditions of the CSA remain in full force and effect, until such time a revised agreement is reached. It is envisaged that such an agreement will be reached in the form of a Term Sheet which will be submitted for approval by the respective boards of directors of Exxaro and Eskom during August The 1H14 net operating profit guidance provided in the SENS announcement dated 24 June 2014 excludes the impact of the outcome of any possible settlement with Eskom on the current Medupi Power Station construction delay off-take engagement discussions. Coal dispatches to Medupi Power Station commenced on 23 of June Total project costs remain estimated at R10,2 billion ACCOUNTING Capitalisation of costs on this project will cease with effect from 30 June 2014 as management has declared the asset ready for intended management use, as such all costs in 2H14 are expected to go directly to the statement of profit or loss. The Eskom Shortfall constitutes a penalty as the parties agreed that Eskom would pay the Eskom Shortfall quantities as a result of the delay in the construction of the Medupi Power Station. This will continue to be recorded as other income. The receipt of the Monthly Energy constitutes a take-or-pay transaction due to the fact that should Eskom in any month during the ramp-up period, take less than the applicable Monthly Energy, Exxaro shall be entitled to a payment by Eskom at the end of that month as if the Monthly Energy was supplied during that month. The resultant income constitutes revenue for Exxaro as the income relates to the sale and supply of coal. As such it will be recorded as revenue, and this will be capitalised up until 30 June DEVELOPMENT PROJECTS THABAMETSI Thabametsi is a prospective greenfields opencast mine adjacent to Grootegeluk in the Waterberg, Limpopo province. It is expected that the phase 1 development of the mine will coincide with the 600MW coal-fired baseload Independent Power Producer (IPP) power station (the 600MW Waterberg IPP) project, which is now owned and is being developed by GDF SUEZ. The Thabametsi mine will supply approximately 3.5 Mtpa of run-of-mine (ROM) coal to the 600MW Waterberg IPP post ramp-up.

4 The pre-feasibility study (PFS) for Thabametsi North Phase 1 was completed during 2Q14 for the first phase development of the Thabametsi mine. A bankable feasibility study (BFS) for Thabametsi North Phase 1 will commence 3Q14 and should be completed by mid BELFAST PROJECT The Belfast project is a greenfields opencast mine development in the Mpumalanga province. The project encompasses one of the last high quality reserves in the Mpumalanga province and presents Exxaro with an opportunity for excellent returns. The estimated annual production of the mine is an average of 2.2Mpta of A- grade export coal and 0.5Mtpa of Eskom coal over a 16-year period post commissioning. The commissioning of the mine is scheduled for 2H17. A mining right was awarded during During June 2014 the Exxaro Board approved R3,8 billion for the implementation of the project with R3,6 billion only to be spent once all required licences and regulatory approvals are obtained REDUCTANTS - CHAR The PFS of the two retort expansion (a 50% expansion of the existing Reductant business) was concluded during 2H14. A BFS will commence during 3Q14 and is scheduled for completion by mid MORANBAH SOUTH Moranbah is a prospective greenfields mine (50:50 joint venture with Anglo) in Queensland Australia The potential for this project is production of estimated at 10Mt of hard coking coal through a dual long wall operation. The exact timing of the project is to be determined. The environmental impact study is progressing well with the final response to public submissions submitted during May The environmental authorisation is expected to be granted during 2H POTENTIAL CORPORATE ACTIONS NCC DISPOSAL Exxaro continues to engage with Universal Coal Development VIII Proprietary Limited (Universal Coal) regarding the fulfilment of the terms and conditions of the possible sale of NCC, in line with the previous guidance. 5 CAPITAL EXPENDITURE The revised major capital expenditure guidance will be provided on 21 August 2014.

5 6 OVERALL GROUP FINANCIAL PERFORMANCE For the overall group expected performance, please refer to the SENS announcement dated 24 June Earnings guidance will be provided once there is a reasonable degree of certainty on 1H14, taking into account any adjustments arising from interim reporting closure process. The forecast financial information appearing in this update is the responsibility of the directors and has not been reviewed or reported on by Exxaro s external auditors. Exxaro will publish its interim results for the 2014 financial year on 21 August MACRO-ECONOMIC ENVIRONMENT AND OUTLOOK 1H13 2H13 1H14 % change (1H14 vs 2H13) Macro-economic indicators Average ZAR/US$ (spot) 9,20 10,04 10,67 6,3% Brent crude oil (US$/bbl) 107,95 109,45 108,65 (0,7%) Product prices Thermal coal (US$/t, FOB RBCT) 82,78 78,09 76,70 (1,8%) Hard Coking Coal (US$/t, FOB Australia) (17,6%) Prices reflect international commodity reference and not Exxaro Resources specific. Sources: Reuters, I-Net, SACR, CRU Global economic growth improved gradually during 1H14, although the performances of the major world economies were mixed. US economic growth contracted significantly during 1Q14, mainly due to adverse weather conditions, however, economic activity bounced back during 2Q14 with expectations to maintain its momentum into 2H14. The deceleration of Chinese economy growth was evident during 1H14 with the construction sector one of the mostly affected. However, some measures to cushion the broad investment slowdown were introduced. In Europe, business and consumer confidence continued with their improving trend. South Africa s economic growth outlook remain subject to a number of headwinds - prolonged strikes, electricity supply constraints, low business and consumer confidence and higher consumer debt levels. Furthermore, GDP contracted by 0,6% in 1Q14 with risks of a tighter monetary policy on the back of a weak currency and accelerated inflationary pressures. The recent downgrades by credit rating agencies are testimony to the current economic challenges for South Africa. The global macro-economic and mineral commodity environment remains challenging. Against this background, Exxaro is expecting another challenging, but cautiously optimistic 2H14.

6 Editor s note: Exxaro is one of the largest South African based diversified resources companies, with interests in the Coal, Titanium Dioxide and Iron ore commodities. Enquiries: Wim de Klerk Finance Director Tel: Mobile: wim.deklerk@exxaro.com Pretoria 26 June 2014 Sponsor Deutsche Securities (SA) Proprietary Limited Forward-looking statements disclaimer: The financial information on which any outlook statements are based have not been reviewed or reported on. These forward-looking statements are based on management s current beliefs and expectations and are subject to uncertainty and changes in circumstances. The forward-looking statements involve risks that may affect the group s operations, markets, products, services and prices. Exxaro undertakes no obligation to update or reverse the forward-looking statements, whether as a result of new information or future developments.