South Africa needs to consider its unique position and its level of industrialisation to determine what should be deemed a “just transition”, Menar chairperson Mpumelelo Mkhabela said during a panel discussion at this year’s Joburg Indaba, in Sandton, this week.
Speaking during a panel focusing on the outlook for coal mining and South Africa’s coal sector, he explained that “what may be deemed just for Germany in terms of transitioning away from coal, may not be just for emerging countries, such as South Africa and India”.
He pointed out that more than 700 000 people earned their livelihoods in the coal industry, which generated more than R70-billion a year in export earnings for the South African economy. This “illustrates the importance of the sector to South Africa’s economy”, he noted.
Mkhabela referred to the draft Integrated Resource Plan (IRP), identifying “two issues”.
The first was the lack of discussion on the implementation of clean coal technologies, and the second was that the IRP document itself “admits that no study had been undertaken on the socioeconomic impact of reducing coal dependency by 2040”, he said during the panel discussion.
He urged delegates and the industry to take into account the need for a clean and healthy environment, adding that the industry should not be “environmental denialists” in its approach to the environmental impact of fossil fuel use. This approach should be balanced by a realistic appraisal of the economic and energy needs of South Africa, Mkhabela said.
Commenting on the “supporting role” that renewable energy could play to South Africa’s energy needs, he averred that coal was vital to the country’s energy and economic stability.
“South Africa is well endowed with coal resources, which need to be mined and processed responsibly,” he told delegates, adding that Menar was hopeful that the delay in the release of the IRP was as a result of government wanting to ensure that all factors were taken into account, including South Africa’s socioeconomic concerns.
Moreover, Mkhabela highlighted that coal was necessary to reverse South Africa’s deindustrialisation by providing manufacturers with affordable and reliable energy supply.
To achieve this, he said, coal suppliers had to be responsible in their dealings with State-owned power utility Eskom, highlighting that there must be investment in the development of new coal mines.
None of Menar’s subsidiaries currently have supply contracts with the power utility.
Mkhabela acknowledged that the government was correct in raising concerns about the prices coal suppliers charged Eskom for their product.
He added that, “as intensive energy users, mining companies also need affordable energy".