As SA gradually winds down its coalfields in favour of a more eco-friendly energy mix, the majority of coal workers risk being unable to transfer their skills to non-mining sectors.
As a result, coal workers risk being stranded by the global shift to renewable energy, according to a policy brief by researchers at Trade and Industrial Policy Strategies (TIPS).
The coal sector directly employs about 150,000 people, roughly two-thirds of whom are in mining, and the remainder of whom work in transport or at the point of coal consumption.
For decades, coal has been the backbone of the country’s power mix, contributing 70% of electricity generation capacity and 83% of electricity production in 2023.
However, “the coal value chain is on a progressive, long-term phase-out over the next two to three decades”, reads the brief, with 22GW set to be decommissioned by 2035 under the Integrated Resource Plan.
The Komati coal mine closed in 2022, forcing nearly 400 employees to transfer to new roles or accept payouts, while the Camden, Grootvlei and Hendrina plants are set to shut down between 2027-30.
After peaking in 2018, export sales of coal have steadily declined in recent years, from 21-million tonnes in the last quarter of 2018 to just over 10-million in the second quarter of 2024.
At the same time, renewable energy’s share of the electricity mix has grown from just more than 2% in 2010 to 17% of generation capacity in 2023.
This shift is a particular concern for Mpumalanga’s most coal-dependent municipalities, whose levels of poverty and inequality are often elevated above national rates.
“It is not clear how affected and over-stretched municipal governments will be able to sustain, let alone enhance, service delivery, particularly as coal mines and Eskom have provided many of the local public services to date,” said TIPS.
SA has a potentially global competitive advantage in several emerging green industries related to its vast critical mineral reserves, such as battery storage and green hydrogen. However, their ability to fill the employment and economic gap left by coal is threatened by the country’s failure to equip coal workers and coal-dependent municipalities for the transition.
TIPS said that the transition of SA’s coal value chain, the first large-scale, co-ordinated attempt at “inclusive industrial transformation” in the environmental context, was likely to set the tone for other sectors’ transitions.
Beyond mining, the shift to renewables and electric vehicles would drive structural changes in the automotive sector, with roughly 140,000 petrol attendant jobs at risk of being lost in the coming years.
Another 250,000 mechanics in the country, a third of whom are informally trained or self-employed, will require retraining or upskilling to service electric vehicles, according to TIPS.
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