The regional implications of just transition in the world's most coal-dependent economy: The case of Mpumalanga, South Africa

Abstract

IntroductionSouth Africa has had an extraordinarily heavy reliance on coal to fuel its economy, and it is one of the highest carbon dioxide emitters per capita globally. Current moves aligned with COP26 and recently announced Western support for a Just Transition Partnership to support decarbonisation in South Africa and replace coal fired power stations with renewables are to be welcomed. That said, the majority of South Africa's coal mines, thermal power stations and the currently important coal export industry are located in Mpumalanga's Coal-Belt, an area which has and will continue to experience significant social and economic trauma as mines close and workers needs to be reskilled. There are currently over 100,000 workers in the coal and related industries in this region.MethodsThis paper draws on international and South African evidence of the effects and responses to mine closure, regional resilience theory and evolutionary economic geography theory to analyse the implications and prospects for economic renewal as the coal industry winds down. Evidence is sourced form secondary material including government and industry policy statements and media articles, while primary material was sourced from key informant interviews.ResultsTransitioning this region of South Africa from its virtual mono-economy based on coal presents challenges which this paper highlights. While support from international sources to help make this transition into renewables will be of considerable benefit, significant challenges need to be addressed to ensure that difficulties are overcome, and the risks of the resource curse experienced in many developing countries are minimized.DiscussionProcesses may need to be put in place to ensure that the ambitious goal of transitioning from coal to renewables can be achieved, finances and management well-targeted, and a sense of security given to outside investors to help fund the transition, but also broader economic diversification. In parallel to ensure the “transition is just” mechanisms also need to be put in place, by the state and the investors, to ensure that those citizens unable to transition are empowered and engaged in their community to stem the risk of the inevitable frustration and social disturbance that exclusion from the economy and living with declining services creates. Whom should be putting these processes into place also needs consideration given that existing organizations are already struggling. Though not an easy task, it is hoped that this paper sheds some light on the various issues and encourages consideration of the ways to address them.

Assessing coal mine closures and mining community profiles for the just transition' in South Africa

“…For example, 57% of businesses in Steve Tshwete local municipality offer services to either coal mines or coal plants (Semelane et al, 2021) and hundreds of small businesses rely on spending by direct and indirect coal workers (Pai et al, 2021). Globally, mining regions have generally struggled to cope with mine closure and the resulting economic loss, often leading to regional decline and effective town abandonment (Nel, Marais, and Mqotyana, 2023). Literature on regional resilience identifies key elements as strong local leadership, endogenous knowledge, innovation, willingness to change, experience from previous crises, access to funds, transferrable skills, and willingness to retrain, coupled with the availability of resources and market opportunities for a 'new' economy (ibid.).…”

A Divestment Model: Migration to Green Energy Investment Portfolio Concept

“…South Africa, for example, is facing a challenge of electricity supply and demand balance, resulting in power interruptions for several hours [11]. The country heavily relies on coal-fired power generation [12,13], which is experiencing operational challenges arising from aging infrastructure and insufficient maintenance.…”

Green development level assessment and obstacle analysis of China's coal-resource-based regions

“…They found that support from federal policy was necessary to support structural change in these regions [15] . Nel et al drew on international and South African evidence of the effects and responses to mine closure, regional resilience theory and evolutionary economic geography theory to analyze the implications and prospects for economic renewal as the coal industry winds down [13] . In China, the majority of current research focuses on the barriers to and determinants of the industrial transformation of cities with coal resources.…”