ESGS Webinar: The Just Transition and the Coal Mining Sector in South Africa

Date: 12 October 2022 | Time: 13:00-14:00 | Online via Zoom

Growing concern over the impacts of climate change across the world has led to the widely-shared goal for a ‘just transition’ to cleaner energy sources and reduced dependence on coal. Many different definitions are used for the just transition but a key feature is that no-one is left behind when making necessary changes to energy and economic systems. That involves sharing the costs and benefits of the changes fairly, supporting workers with new jobs or retraining, and supporting communities through broader economic changes.

Internationally, there has been a transition away from coal mining, particularly in Europe, and a growing awareness of the need for new policies to address the job losses, lack of skills for the new energy system, and changing value chains and supply chains. South Africa is under pressure to do the same, given it is the world’s 7th largest coal producer and its 14th biggest CO2 emitter. In addition, South Africa is going to experience greater temperature increases than the global average and adaptation to climate change is a growing concern. Despite ambitious commitments to low carbon growth, political and governance factors have hindered the roll out of renewables.

There are 69 operating coal mines in South Africa, largely in Mpumalanga province, owned by 32 mining companies. They directly employ over 92,000 people and support an estimated 170,000 jobs indirectly. They supply coal to 18 power stations who employ about 12,000 people. Our research shows that 12 of these mines and 6 power stations will close by 2030 and a further 30 mines and 7 power stations will close by 2050. This is reflected in the IRP and means that the transition away from coal to renewable energy is already planned and will likely occur without premature closure implied by the ‘just transition’. In fact the mining companies themselves are contributing to the transition by installing their own renewable energy at mine sites, with 6.5 GW by 29 companies planned to date.

Despite this, the impact of mine closure on the host communities is significant and cannot be underestimated. Coal mines occur in 5 provinces, 2 metros and 21 local municipalities, home to over 10 million people. More specifically, there are 69 mining host communities (4 cities, 24 towns, 14 townships and 8 rural villages) home to 6.5 million people. The majority of people in these communities have low levels of employment, education and internet access which hinder the just transition. The level of basic services varies significantly but is lowest in remote areas with lowest income levels and fewest job opportunities. Importantly, many of the host local municipalities are in financial stress and will struggle to cope with mine closure, and the resultant loss of revenue and support.

The South African approach to the ‘just transition’ needs to take into account these local realities and the narrative needs to support an effective transition that does not undermine the economy or the social licence to operate of the coal mines that are currently an essential part of the energy system.