One of South Africa’s largest coal miners, Exxaro Resources, has warned that while transitioning to greener and cleaner sources of energy is critical, it must happen in a way that takes South Africa’s social and economic challenges into account.
As climate crisis activism takes hold across the globe, the industry has faced strident anti-coal lobbying, said CEO Mxolisi Mgojo. But although transitioning to a low-carbon economy is imperative, it won’t happen overnight and it has to be a “just transition”, he added.
“With the economy growing at less than 1% and an alarmingly high unemployment rate that is close to 30%, with youth unemployment exceeding 50% and high levels of poverty, we must be considerate and informed about saying that coal won’t be relevant in South Africa’s future.”
Mgojo was speaking at the official launch of the company’s new green headquarters in Centurion on Monday, where he was joined by Minister of Employment and Labour, Thulas Nxesi.
Exxaro is the largest coal supplier to state-owned Eskom. On Friday government published the Integrated Resource Plan (IRP), the blueprint of South Africa’s energy mix for the next decade, which will see divestment away from coal energy towards renewables, particularly wind and solar. By 2050 the government envisions that Eskom’s electricity generation from coal will be largely decommissioned. The IRP states that the socio-economic impact of decommissioning these Eskom plants has not been quantified or included in the document.
The industry employs over 80 000 people and accounts for close to 20% of the jobs in the mining industry, according to numbers from the Minerals Council South Africa. This does not account for other jobs that are created up- and downstream.
Mgojo said that as coal production declines, jobs, regional development, political- and environmental impact will all require attention and assessment and that the process needs to be viewed as a “shared challenge for all”.
“If you look at many other countries that have taken this transition, it is indeed critical that we ensure that unions and communities are not neglected in this transition.”
This will involve ensuring technical skills development, strategies that encourage labour redeployment, upskilling and retraining in order to ensure that workers are able to transfer between sectors.
In his keynote address, Nxesi described the unveiling as “auspicious”, particularly in light of the economic challenges which South Africa is currently facing.
The minister outlined the department’s new employer mandate, stressing that there would be a greater focus on job creation and job preservation. He also encouraged business to engage with the state on how it can reduce red tape and bureaucracy in order to ease the costs of doing business in the country.
“It is no coincidence that we should be unveiling these new headquarters at such a time. Opening a head office in the midst of the difficult economic climate gives hope and assurance that Exxaro Resources are growing and are here for the long haul, despite the dynamic changes in the coal and mining sector.”