South Africa’s coal lobby is resisting a green transition

Pascaline Mazibuko has become a recurrent voice in government consultations on the energy transition in Emalahleni, a municipality of South Africa’s energy heartland Mpumalanga province. The former politician has now turned her efforts to keeping coal alive in the region.

From 2015 to 2020, Mazibuko held public office as a councillor in the Emalahleni Local Municipality. Now, through a a non-profit called Bullet Mkabayi Foundation, she has actively lobbied against the rapid deployment of renewables and the country’s planned coal phase out. 

“We have been lobbying, and will continue to lobby our people to say: reject this thing. It is not going to work for us,” Mazibuko told Oxpeckers and Climate Home News. 

South Africa is at the heart of one of the most ambitious energy transition deals in the world — an $8.5 billion partnership with a group of wealthy countries, among them the US, UK and EU. The Just Energy Transition Partnership (JETP) seeks to phase out coal in the country by 2035. 

But the nation’s coal sector has exerted a significant pushback to this plan, partnering with politicians and even managing to water down or delay key policies, such as the Climate Change Bill and the Carbon Tax Act. 

Local business group tries to keep South Africa’s coal plants alive

Mazibuko, for example, has held meetings with political leaders such as the Mpumalanga Premier Refilwe Mtshweni-Tsipane, and members of the Department of Mineral Resources and the Presidential Climate Commission. She defends a continued use of coal. 

“Coal lobbying has the greatest impact on green energy investments by increasing uncertainty and thus reducing the appetite of investors to invest in green energy,” said Mary Stewart, chief executive of climate consultancy Energetics.

South Africa currently relies heavily on coal for about 70% of total electricity production. The country is also one of the top five coal exporting countries in the world, hosting an influential coal mining industry. 

Several major companies with stakes in the coal sector have kept fossil fuels in their corporate planning. The petrochemical company Sasol, for example, claims to lead development of a “gas economy”, while South Africa’s public electricity company Eskom plans to “repower” stations using gas, according to their 2021 sustainability report.  

Coal lobby 

Progress on South Africa’s energy transition depends on phasing out 14 existing coal-fired power plants, as well as accelerating the deployment of renewable energy. But the coal sector has so far resisted this transition. 

During discussions on South Africa’s Climate Change Bill, a landmark climate legislation still in public hearings, at least four groups -including the country’s own Eskom- made attempts to weaken penalties for polluters, according to a report by climate think tank InfluenceMap. 

The mining industry was the strongest supporter of coal, as multinational companies Anglo American and South32 all participated in lobbying to water down climate legislation in South Africa, the report shows. 

Eskom, which plays a key role in transitioning the country’s energy system away from fossil fuels, was one of the groups that has lobbied in favour of keeping a continued use of coal and gas while expanding renewable capacity, the report shows. 

In earlier discussions on the Carbon Tax Act, industry lobbyists pushed for a low tax on greenhouse gas pollution, which ultimately passed in 2019 at a rate of around an $8 per tonne of carbon dioxide. This is much lower than the $40-80 per tonne recommended by the climate think tank Carbon Market Watch to achieve the goals of the Paris Agreement. 

At the time, The Minerals Council South Africa, which represents mining companies employing 450,000 people, said the tax was “a wrong method at the wrong time”. 

Industry executives hold similar views on the role of coal in the upcoming years. Mike Teke, CEO of Seriti Resources, owner of six coal mines around Emalahleni that supply Eskom, defended the expansion of their coal business while building renewables. 

One of its subsidiaries, Seriti Green, announced in February 2023 the development of a 155MW wind farm due to come online by 2025. The project, however, will serve to power about 75% of the electricity required in its own coal mines. 

“We’re building wind turbines. However, I want to be clear, we will continue building our coal business at the same time as building our renewables business,” he told Oxpeckers and Climate Home News. 

Mike Tete, CEO of Seriti Resources, plans to expand coal mining activities and power it with renewables.

Uncertain investments 

Lobbying for coal interests has a long history in South Africa, according to Wikus Kruger, research lead and lecturer on power-sector investment in sub-Saharan Africa at the Power Futures Lab, based at the University of Cape Town’s Graduate School of Business. 

The “minerals-energy complex”, a powerful grouping of business and political leaders related to the coal sector, has influenced decision making since the apartheid time, Kruger said. Today, it has kept an active pushback against the coal phase-out. 

 

By 2018, South Africa’s public electricity company Eskom had aligned with different political currents, but “coal mining for electricity generation continued to dominate”, according to research published by Oxford University Press. 

Policy certainty is essential for investors to pour money into green energy in South Africa, climate futures analyst Nicholas King told Oxpeckers and Climate Home. But recent events have kept policy decisions far from certain in the country. 

South Africa’s ageing coal-fired power plant fleet has caused an energy crisis all over the country, with blackouts more than tripling in 2022 compared to 2021.

As a result, president Cyril Ramaphosa said in a statement to the nation that he would consider delaying coal-fired power plant decommissions. Rich donor countries, on their part, said they were “understanding” of the crisis but warned about the risk of backsliding on the energy transition. 

“You need a clear picture… a roadmap,” King said. “No one’s going to want to invest if the old and really malfunctioning coal-fired power stations are going to have their length of life extended.”

Uncertainty on renewable retraining frightens South Africa’s coal communities

Still committed 

In spite of the current energy crisis and pressures from the coal sector, the government remains committed to South Africa’s decarbonisation targets, said project management unit head Rudi Dicks.

Dicks said any revision to the decommissioning schedule would be informed by a comparison of the costs of refurbishing older coal-fired power stations with the cost of investing in its replacements, including renewables, batteries and gas.

Still, extending the coal-fired power plants’ lives, as well as building new coal-fired power plants, are options being pushed by government factions, specifically in the Department of Mineral Resources and Energy, which has a strong interest in coal, said Brett Cohen, climate and energy consultant at the Department of Chemistry at the University of Cape Town. 

“The bulk of the pro (coal) lobby is within Mpumalanga; it is people who are concerned about job losses and economic impact,” Cohen said. “There hasn’t been a clear policy signal from the government for renewables, that’s why it has been difficult to invest in renewables in South Africa.” 

King, on his part, said clarity will be key to guarantee renewable growth in the country. “The longer we resist the changes, the more it’s going to be problematic for us to attract that investment, and investors will go to countries that are willing to transition,” he concluded.    

This story was published in partnership between Oxpeckers Investigative Environmental Journalism and Climate Home News, and produced with the support of the Pulitzer Center