CASH FLOW

Cash retained from operations was R832 million. Taxation payments of R488 million, the final dividend for the 2008 financial year of R700 million and capital expenditure payments of R686 million were made. A total of R347 million of the capital expenditure was invested in new capacity and R339 million applied to sustaining and environmental capital.

A net cash outflow of R279 million was recorded after accounting for R1 124 million dividend receipts from associate companies.

Net debt of R2 381 million at 31 December 2008 increased to R2 455 million at 30 June 2009 at a debt to equity ratio of 18%, and includes the R2 662 million and R221 million paid for Namakwa Sands and a 26% interest in Black Mountain in the latter half of 2008 respectively.

Subsequent to the interim date, Exxaro paid R1 032 million for its investment in the Mafube joint venture with Anglo Coal.

The significant reduction in cash retention and net cash outflow position compared with the corresponding period in 2008, can partly be ascribed to higher inventory holding as demand decreased while customers were destocking during the global recessionary environment.