Study flags risks of coal mines’ demise

Research funded by the Water Research Commission has found that more than 6-million people in SA who live in mining areas will be affected socially and economically by mine closures, with communities in the coal belt and gold-mining areas likely to be the most affected.

The study calls for government and companies to think about the social risks that will accompany the closure of coal mines as new investments in the sector dry up while the country ramps up investments into cleaner energy.

The research, conducted by UCT academic Megan Cole, notes that mine closures are a growing concern in mining countries around the world due to the associated environmental and social impacts.

“Numerous coal mines are expected to close in the near future as the coal fields in Mpumalanga are depleted and climate change limits coal investment; there is significant domestic and international pressure for a ‘just transition’ to clean energy that ensures that the mineworkers and host communities are not left behind,” the study states.

“Similarly, the shift to electric vehicles may see a decline in platinum demand and result in mine closures in the high-cost underground mines in North West and Limpopo.

GREEN ENERGY

“In other regions within SA, the increased global demand for socalled ‘energy transition minerals’ is seeing increased exploration and development of manganese, copper, iron ore, base metals, vanadium and rare earth minerals, which are necessary for green energy and e-mobility technologies.”

The warning of a potential demise of the platinum sector comes just months after Coronation, one of SA’s largest asset managers, said it had disinvested from the sector, predicting demand would wane in the years to come as green metals became favoured.

Coronation has boldly recommended that companies in the sector, the largest employer of all mineral commodities producers in SA, should look at decommissioning unprofitable mines.

Cole’s research has identified about 69 mines in Mpuma

langa’s coal fields as being at high risk of closure. The research also shows that most of the gold mines and a few chrome mines on the Western Limb of the Bushveld Complex in the North West are also in the high-risk category.

“The risk rating system identifies mines and regions where mine closure is highly likely and needs immediate attention, and provincial, district and local governments should take note of how this may affect their planning and budgeting in the short and medium term,” the study notes.

“Currently, 48 operating mines have a life of mine of 10 years or less, and the coal mines in Mpumalanga province and the gold mines in Gauteng stand out as areas requiring urgent attention. The social risks are highest in the most vulnerable communities, highlighting the need for a broad response by national and provincial governments that alleviate poverty and support economic growth.

“Analysis of job prospects for coal mineworkers in SA leaving mining show the majority are not employable or have low employability prospects.

“Similarly, the financial and human resource capacity of the local government authority affects its ability to cope with mine closures, and the resulting loss of revenue and analysis of audit reports in SA show most municipalities will struggle to cope.”

The study’s findings illustrate the need for a just transition framework that lays out a shared vision and policy areas for achieving an equitable zerocarbon economy.

Research by professional services firm PwC, released in October, found that some provinces have as little as six years of mining left based on declared resources and reserves.

The gold and iron ore mining industries in particular could experience a major ramp-down over the next two decades, and in some provinces much earlier.

CORONATION HAS BOLDLY RECOMMENDED THAT COMPANIES SHOULD LOOK AT DECOMMISSIONING UNPROFITABLE MINES