IS SA’S ENERGY TRANSITION VIABLE ?

As mining companies race to become net-zero by 2050, there are a couple of factors they need to get in order. A recent report by PwC emphasizes the importance of mining companies preparing themselves for a low-carbon economy. To achieve this goal, mines need to adopt sustainable mining practices and other innovative approaches. However, it would be shortsighted of us to assume that the transition will be smooth. As with any transition, we should expect some hiccups and challenges.

The main challenges we face as a country include the following:

1.

Climate financing

Financing has been a major obstacle to South Africa’s climate transition plan. It is important to note that this challenge is not unique to our country. The US and EU countries - including Germany, France, and the UK - pledged $8.5 billion at COP26, and negotiations have not been without challenges. Considering the implications of loans on our country’s existing debt, our country is likely to utilise a portion of grant funds to support its $95 billion energy transition plan. A portion of that burden may be borne by mines.

2. Shutting down black-owned coal mines

The shutting down of black-owned mines is another significant challenge related to the adoption to environmentally friendly energy. Doing so will extremely reverse the progress we have made towards transforming the sector and reversing economic imbalances.

3.

Job losses

Last but not least, we can’t ignore job losses, which could leave thousands of South Africans jobless. The coal industry alone generates

80% of the country’s electricity. More people are employed by the coal industry than by any other industry. A pertinent question arises: what will happen to the thousands of jobless people?

Supporting SA’s energy transition through the mining sector

Here are some facts about how the SA mining sector is supporting the energy transition. South Africa’s mining sector contributes 8.7% of its GDP7

Increasing fuel cell and electrolyser production is one way in which platinum group metals (PGM) are benefiting from such ‘green’ demand. Export demand led to a 26% increase in production in 2021.

In order to remain competitive globally, the mining sector must look beyond renewable energy. The entire mining value chain needs to be considered in terms of sustainability and circularity.