Five ways Mpumalanga can thrive beyond coal

We are living in interesting times. The global movement towards Net Zero is gaining momentum as the desire to address climate change has never been greater than any other point in history; this includes the discovery of the hole in the ozone layer and Al Gores documentary An Inconvenient Truth. Countries that rely on fossil fuel technology to power their economies, and those who have built their economies on mining are under serious threat. This is particularly worrying for South Africa where towns and communities have been built around coal mining.

Turnaround Talk published an article almost a year ago which started to discuss this plight. At the time, coal mining was still viable as Eskom was facing significant structural issues and the demand for coal exports were significant. The situation is significantly different now.

An article by News24 tries to look at what life would be like for these communities should mining continue its downward spiral. Some subheadings were inserted by Turnaround Talk.

Coal mining hotbed

The article points out that the local municipalities of Steve Tshwete and Emalahleni in Mpumalanga are home to most of the country’s coal mines and power stations, and they risk becoming ghost towns as the country phases out coal.

But all is not lost, there are opportunities to diversify these economies and that of the province, according to a new report, Beyond coal: Opportunities to diversify the economies of Emalahleni and Steve Tshwete local municipalities.

The report, published this week, is a collaboration by researchers from Trade & Industrial Policy, the National Labour and Economic Development Institute (NALEDI) and others.

Coal dependent

The article points out that the report reflects on South Africa’s dependence on coal to meet primary energy needs. In 2019, about 86% of electricity came from coal, and a fifth of liquid fuels was derived from the mineral. Coal is also a key input for other industries, such as iron and steel production.

The report also unpacks how Mpumalanga’s economic activity is largely driven by coal and coal-related industries. This includes Eskom’s power stations near Steve Tshwete and Emalahleni and Sasol’s petrochemical production in Secunda. The coal value chain in Mpumalanga employs about 150 000 workers. Apart from creating direct employment opportunities at mines, power stations and petrochemical plants, the impact of the coal-value chain has led to the development of other indirect services such as accommodation and retail businesses.

The article adds that, at the same time, coal is a major contributor to greenhouse gas emissions and environmental pollution in the province.

A recent study highlights that the Nkangala district, where Steve Tshwete and Emalahleni fall under, has a pollution level nearly three times the World Health Organisation’s (WHO) guideline at 24.03 micrograms per cubic meter of air (µg/m³). If the air pollution was as low as 5 µg/m³ – aligned to the WHO standard – then the life expectancy of residents would improve by nearly two years.

The researchers note that residents of Emalahleni and Steve Tshwete struggle with respiratory problems such as asthma.

The article points out that, earlier this week, Eskom CEO André De Ruyter shared that retiring nearly half (47%) of Eskom’s coal-fired power stations could reduce emissions by 62%. Eskom intends to decommission 22 GW of its coal-fired power stations by 2035. But there is a real risk of job losses as coal is phased out. To prevent this, and ensure a just transition, economic diversification in the province is critical.

The report highlights ways the Mpumalanga economy can stay thriving.

Switch to clean energy

The article points out that Mpumalanga can still play a key role in South Africa’s energy system, by providing sustainable and low-carbon energy, according to researchers.

Currently, Eskom is looking into repurposing its old coal-fired power stations with renewables. It has run a few pilot projects at Komati coal-fired power station, which will be decommissioned at the end of September. Eskom intends to roll out 100 MW of solar PV and 70 MW of wind at the site.

The article adds that Eskom has also selected 18 companies that will lease its land in Mpumalanga to develop renewable energy projects. The advantage of this land is that it is close to the existing transmission network, making it easy for these projects to connect to the grid. Eskom recently confirmed that the initiative could add 1800 MW to the grid once the projects are online.

There is also potential for the development of green hydrogen that would be useful for petrochemical production, the report indicated. Currently, Sasol relies on grey hydrogen – manufactured using coal and gas – but is looking into using renewables to create green hydrogen. The green hydrogen can then be used to produce other chemicals such as ammonia.

These green industries provide job opportunities for vulnerable workers in the coal value chain who can leverage existing skills, for example, truck driving, or can learn new skills to work with the new technologies.

Adapt manufacturing

The article points out that Mpumalanga’s existing manufacturing industry includes metals, chemicals, food and beverages, wood and paper, machinery and equipment. In 2020, the manufacturing industry accounted for 21% of Mpumalanga’s economy (down from 28% in 2010) and 8% of its employment.

Manufacturing was responsible for 21% of the output from Steve Tshwete and 10% of its employment. In Emalahleni, it accounted for 17% of output and 8% of employment.

The article adds that existing manufacturing activity should be adapted for green industries. For example, Mpumalanga can shift to the production of green steel and iron – in this case, green hydrogen would be used as a fuel to power production. The researchers expect growth in steel demand in the long term for rail, construction and renewable energy, which warrants expansion of the sector.

The existing vanadium reserves could potentially be used for vanadium-based products such as batteries, which are becoming increasingly important as a storage technology complementing renewables. Manganese production can also be used for lithium-ion batteries. The report also highlights opportunities to manufacture components for renewable energy, such as solar PV modules.

The researchers note the importance of having industrial parks or a Special Economic Zone that would assist efforts to bolster manufacturing in the region. This must be coupled with support through industrial policy.

Develop the coal ash value chain

The article points out that coal ash – which results from burning coal – can be used to produce other products such as cement and bricks and to rehabilitate mining land.

As the country’s main producer of coal ash, Eskom is also facing rising costs from having to store coal ash. The researchers suggest Eskom sell more of its coal ash to the construction industry. The report indicated that only 7% of its ash is sold, whereas on average 19% of ash produced at a power station can be sold.

But working with ash will be tricky. Ash is hazardous and requires a waste management licence from the Department of Forestry, Fisheries and the Environment. This can be a costly and time-consuming process for small businesses. A waste management licence would cost about R200 000 and requires a two-year processing period, the report indicated. In some cases, licence exemptions can be applied for – but they also take two years to process.

The article adds that other costs are associated with working with ash, such as treatment before it can be used and transport costs. These act as barriers to developing the coal ash value chain.

Expand agriculture

Only half (46%) of South Africa’s arable land is in Mpumalanga. About 2.5 million hectares or 32% of the province’s land is being used for commercial agriculture. The province produces maize, sugarcane, bananas, macadamia nuts and soya beans. “The province is also the fourth-largest seller of cattle in the country and hosts a massive poultry industry,” the report read.

The article points out that Steve Tshwete was among two of the largest income-generating municipalities in the country in 2017, largely due to agricultural production. The agriculture industry also employs a significant amount of people in the province. According to the report over 130 000 people were directly employed by the sector in 2020 – accounting for 12% of the province’s employment. But where the coal value chain is a big driver of employment, agriculture only accounted for 2% of jobs in Emalahleni and 5% in Steve Tshwete.

There is, however, still potential to expand agriculture in the province and jobs in the sector. Ensuring sustainable rehabilitation of mining land is important for developing agricultural value chains and the tourism sector.

Turn power stations into tourism sites

The article adds that Mpumalanga is one of South Africa’s leading tourist destinations – given its wildlife and landscape. The researchers note the significance of Mpumalanga’s “natural capital” making it an attractive tourism destination. However, climate change, urbanisation, mining and other industrial activities and large-scale agriculture threaten this. The province is facing a loss of biodiversity, and mining has contributed to air, water and land pollution.

Tourism has helped drive economic activity in the province and support livelihoods, especially of those living in poor, rural areas. Apart from direct jobs created, there are small businesses that provide services and supplies such as food and drinks used by the sector.

Apart from preserving natural assets, coal operations such as power stations and mines in Steve Tshwete and Emalahleni can be repurposed into museums, parks and nature reserves that also attract tourists. For example, the Komati power station has one of the country’s tallest chimneys, the researchers suggest that it can become a museum reflecting on the historical role of coal in the country.