The dominant global narrative is that coal is in irreversible decline. Climate commitments are tightening, renewable energy capacity is expanding, and financial markets are increasingly cautious of fossil fuel exposure.
Yet commodity markets are rarely shaped by narrative alone. South Africa’s coal export position remains more resilient than many assume, though this resilience is conditional rather than permanent.
The country’s opportunity lies not in a revival of coal, but in the uneven pace of Asia’s energy transition. Asia absorbs nearly 80% of South Africa’s coal exports, equal to about 46-million tonnes annually. By comparison, Europe accounts for only 4.1%, with Africa at 6.5% and the Middle East at 6.1%.
This means the future of South African coal exports will be determined less by European decarbonisation policy and more by the economics of electricity generation, industrial demand and procurement behaviour in Asia.
South Africa produces about 224-million tonnes of marketable coal each year, making it the world’s fifth-largest producer. Roughly a quarter of this output is exported, placing the country among the leading suppliers of seaborne thermal coal.
The strategic question is therefore not whether global coal demand will eventually decline. It is where demand remains concentrated today, how trade flows are changing and whether South Africa can capture value while those shifts persist.
China and India are central to this. Together they account for more than two-thirds of global coal consumption and heavily influence seaborne pricing. India’s coal demand softened in 2025 due to stronger monsoon rainfall, higher hydropower output and weaker electricity demand growth. However, this appears cyclical rather than structural. India’s longer-term drivers — industrialisation, urbanisation and electrification — remain intact.
Japan tells a different story. Electricity demand has been broadly flat for years, yet coal continues to play a significant role in power generation. The reason is straightforward: reliability and cost advantage. In an economy exposed to volatile liquefied natural gas prices and only gradual nuclear restarts, coal continues to offer stable baseload generation.
This has benefited South Africa. Japanese imports of South African thermal coal rose sharply from about 200,000 tonnes in 2021 to about 3.1-million tonnes in 2024. This partly reflects diversification away from Russian supply after the 2022 invasion of Ukraine, but it also signals growing buyer preference for flexible sourcing options.
South African coal has remained competitive in certain markets on delivered price, calorific value and sulphur specifications. That does not guarantee long-term market share, but it does create a meaningful medium-term opening.
Another underappreciated driver is the rapid increase in electricity demand associated with digitalisation. Data centres, artificial intelligence computing and electric transport are materially increasing baseload power requirements across Asia. In 2024 total data centre capacity in the Asia-Pacific region stood at about 26GW and is projected to rise sharply to 92GW by 2030. This significant expansion in demand may extend the operating life of existing coal-fired generation assets.
For South Africa, coal exports are about more than mining revenue. They support jobs, generate foreign exchange earnings, contribute tax revenue and sustain broader industrial activity. In a low-growth economy constrained by infrastructure weakness and electricity shortages, these earnings are economically significant.
Yet the country’s greatest threat is domestic rather than international. Rail bottlenecks, port inefficiencies and inconsistent logistics performance continue to undermine export competitiveness. While Transnet has shown early signs of operational and financial recovery, Richards Bay coal terminal exported 57.7-million tonnes of coal in 2025, an increase of more than 10% from 2024. Export demand is of limited value if product cannot move efficiently to market.
This moment should therefore be approached with pragmatism. It is neither the start of a new coal supercycle nor proof the global transition has stalled. Rather, it reflects an uneven reconfiguration of global energy systems in which affordability, security and reliability continue to shape fuel choices.
South Africa has a narrow but real opportunity to benefit from this period. But it is time-bound. To capture it, the country must urgently improve rail and port performance, maintain supply reliability and sharpen export competitiveness. Rivals such as Colombia, Indonesia and Russia are responding to the same market signals.
Coal is not returning to its old dominance, but nor is it disappearing as quickly as many predicted. For South Africa the prudent strategy is to use this temporary window wisely while preparing for the world that comes after it.
• Mabasa, a development economist, is executive manager in the office of the deputy minister of mineral & petroleum resources.
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