Coal mine closures to impact 2.5m people
J– An overlooked aspect of the just energy transition is the impact coal mine closures will have on mining communities.
Now we have a better idea, thanks to some research published in the Journal of the Southern African Institute of Mining and Metallurgy.
Five coal-fired power plants and 15 coal mines will likely close by 2030, and another four plants and 23 mines by 2040. This will impact the livelihoods of 2.5 million people, most of them in Mpumalanga.
Digging deeper into the numbers, the five coal-power stations due for retirement by 2030 will withdraw 8.9GW from the grid, followed by a further 14GW when another four power stations are likely decommissioned by 2040.
The closure of 15 mines by 2030 will withdraw 29.5 million tons a year (mtpa) from SA’s coal production, followed by a further 106 mtpa as an additional 23 mines are closed by 2040.
“The impact of mine closure on the 2.5 million residents of host communities will be significant, particularly as levels of income, employment and education are already very low and many municipalities are in financial distress,” say the authors.
“The SA approach to the just transition needs to take local realities into account and the narrative must support an effective transition that does not undermine energy security and economic growth.”
Owned
There are 66 operating coal mines in SA, most in Mpumalanga, owned by 32 private companies.
The five largest companies – Seriti, Sasol, Exxaro, Thungela and Glencore – produce 77 per cent of the country’s coal.
Together, they produced 231 million tons of coal in 2022, generating earnings of R28 billion and employing nearly 91 000 people. Earnings would have been higher in 2022, but for the well-publicised problems at Transnet, resulting in lost export revenues of R22.7 billion in 2022.
Most coal mining communities are concentrated in the western part of Mpumalanga and north-western KwaZulu-Natal. Some 37 per cent live below the poverty line of R19 600 annual household income, and 39 per cent are unemployed, which is higher than the national average, says the research. In rural villages dependent on coal mining, the percentage living below the poverty line shoots to 57 per cent.
Municipalities
Mine closures will impact not just these households, but the municipalities reliant on income from mine employees and companies. National Treasury data shows fruitless and wasteful expenditure of R7 billion in these host municipalities in 2021.
“The poverty and poor living conditions of thousands of people in coal mining host communities is distressing and is not being adequately addressed by the government,” says the research.
The high unemployment in these communities ‘poses a threat to the social licence to operate for coal mining companies, which in turn is an energy security risk and economic risk for the country’.