Global climate change issues and environmental, social and governance pressures continue to attract significant attention, not least regarding the impact of coal on the environment. Some investors are divesting from companies involved in fossil fuel extraction, including banks and other funding institutions, which are increasingly limiting access to finance for the development of new coal-fired power stations and thermal coal mines. Many governments have pledged to reduce greenhouse-gas emissions under the Paris Agreement to avoid the worst effects of climate change, impacting on demand for thermal coal.

South Africa is an outlier with regard to its dependence on coal. It is the most coal-dependent country in the Group of 20 major economies. Nonetheless, it has arguably set the most aggressive carbon abatement targets of any developing country. The country's aim in 2010, as per a submission to the United Nations Framework Convention on Climate Change (UNFCCC), was to reduce emissions by 34% below business as usual by 2020 and 42% below business as usual by 2025.

Some, however, argue that only the developed world should decarbonise, allowing South Africa to fuel its growth with coal. South Africa’s Mineral Resources and Energy Minister Gwede Mantashe is opposed to an “accelerated transition” away from coal, despite the concept again recently featuring in a political declaration signed between South Africa and several developed countries, this time at the twenty-sixth Conference of the Parties to the UNFCCC in 2021. He argues that if South Africa were to stop mining, trucking, shipping and burning coal, ten ghost towns would be created. Accepting that this would be a likely eventuality if the transition were to be mismanaged, however, is by now common cause, and outgoing Minerals Council South Africa CEO Roger Baxter has contended “[the] process . . . must be carefully and pragmatically managed so that employees and communities are not worse off”.

Creamer Media’s ‘Coal 2023: Phasing down, not phasing out’ report reflects on the current state of the coal sector, including demand for, and world trade in, coal; and the main participants in South Africa’s coal sector, their projects and some of their initiatives to combat climate change. The report also considers South Africa’s just energy transition, which requires the coal mining sector to be involved.

Published on 14 March 2023.