Cooling towers at Eskom's Kendal coal-fired power station in Mpumalanga. Picture: WALDO SWIEGERS/BLOOMBERG
What is needed is a sober, serious and realistic debate on the path of change that could conceivably occur. The Minerals Council SA and its members are not climate change denialists but we are pragmatists who advocate a just transition to a lower carbon energy economy. And we believe this transition will take time.
An important driver of the just transition process will be the finalisation and approval of the Integrated Resource Plan to ensure electrical energy security and direction. Creating an independent system operator to manage an independent state-owned grid and being responsible for planning and procurement of electricity is critical. And Eskom will have to adapt to the new market and become more efficient and sustainable, promoting innovation at the generation level.
In 2018, the coal mining industry generated total sales of R139.4bn from its production of 252.6-million tons of coal. It paid about R4bn in tax and R1.6bn in royalties. And it invested about R16bn in fixed capital. In terms of domestic demand, Eskom buys 120Mt of coal annually. This, according to the latest IRP, is set to increase to 139Mt by 2023, and then to decline to the current level by 2033 and to 90Mt by 2050. This demand must be met if we are going to ensure that the power grid is stable enough to support the economy for the next 30 plus years.
There has also been, on an even longer period, a gradual shift from deep-level mining to less power-intensive surface mining as a number of gold mines reach the end of their lives and a number of deep-level platinum ore bodies cannot be viably mined given the decline in platinum prices and increasing costs of power and other inputs. As a consequence of these and other circumstances, Minerals Council research forecasts a reduction in SA’s greenhouse gas emissions of between 13% and 14.