Exxaro calls time on 'unsustainable' Leeuwpan Colliery

Exxaro Resources said on 30 June 2025 that its Leeuwpan Colliery, near Delmas in Mpumalanga, had become unsustainable in its current form, triggering a formal Section 189 consultation with trade unions that could lead to job losses or closure. Chief executive Ben Magara said the process would take 60 to 90 days and that it was too early to say what the outcome would be.

Why Leeuwpan is under pressure

Magara pointed to a combination of pressures squeezing the mine's economics: lower coal export prices, elevated domestic stockpiles, and reduced demand from Eskom as the utility leans more on renewable and nuclear generation. Leeuwpan supplies both export-quality and power-station coal, meaning it is exposed on two fronts simultaneously — a softer seaborne market and a shrinking captive buyer in Eskom.

Balancing jobs against viability

Exxaro said its stated intention through the Section 189 process was to minimise job losses while ensuring a viable business, language that leaves open the possibility of a scaled-down operation rather than outright closure. The announcement came alongside Exxaro's broader interim update, at a time when the company was also grappling with pressure across its coal portfolio from the same soft pricing environment that would later contribute to rival Thungela's full-year loss.

Part of a wider pattern

Leeuwpan's troubles are emblematic of a structural issue facing Mpumalanga's coal belt: many collieries were developed decades ago around specific Eskom power stations or export contracts that are now maturing or shrinking, leaving mine plans and workforces exposed whenever prices soften. Centre for Environmental Rights research published in 2026 would later highlight how few of Mpumalanga's ageing coal mines have been properly closed and rehabilitated, underscoring the stakes of how Exxaro ultimately handles Leeuwpan's wind-down if it proceeds.

What happens next

The outcome of the consultation will determine whether Leeuwpan closes outright, continues at reduced scale, or is sold to a smaller operator better suited to running a maturing asset — a path several larger South African coal companies have taken with ageing collieries in recent years.

Sources

• Miningmx: Exxaro calls time on unsustainable Leeuwpan Colliery, 30 Jun 2025

Photo: Underground coal mining equipment near Delmas, Mpumalanga, close to Exxaro's Leeuwpan Colliery. Na derdingseben, Wikimedia Commons, CC BY-SA 3.0.