South Africa’s Coal Sector Steadies as Global Energy Shift Looms
South Africa’s coal industry remained the country’s largest mining commodity by production volume in 2025, with output reaching approximately 236 million tonnes (Mt), despite mounting global pressure to transition away from fossil fuels. Bituminous coal accounted for 99% of production, while anthracite, introduced in 2013, supplied a strategic niche for smelters, alloy manufacturing and steel production.
Domestic demand continued to anchor the sector, with state utility Eskom consuming roughly 108 Mt for its fleet of coal-fired power stations, and petrochemicals group Sasol using an additional 30–40 Mt. Together, these two entities drove nearly two-thirds of national coal demand, underlining the sector’s dependence on a limited number of domestic buyers.
Export markets, while steady, remain constrained by infrastructure. Around one-third of coal output—approximately 72 Mt—was exported, mostly through the Richards Bay Coal Terminal (RBCT), which is currently operating at just over half its 91 Mt per annum capacity. Asia remained the dominant market, with India alone importing 46% of exported coal. Europe accounted for 10%, while African markets took the remaining 10%.
Revenue performance suffered due to falling prices, with total coal sales expected to decline by 2.6% in 2025. Export prices dropped sharply by 14.9% to around US$90 per tonne, down from US$106 in 2024. Domestic pricing remained relatively stable, insulating producers supplying Eskom and Sasol. Prices began to recover in December 2025, supported by European winter demand and renewed activity in Asian markets.
Infrastructure and security challenges persisted along the 600 km rail corridor linking inland coalfields to Richards Bay, though increased collaboration between mining companies and Transnet has led to enhanced security and reduced incidents of theft and disruption, albeit at higher operational costs.
Looking ahead, policy shifts represent the greatest long-term challenge. South Africa’s Integrated Resource Plan (IRP) 2025 projects coal’s share of Eskom’s installed capacity will fall from 59% today to just 11% by 2042, implying a reduction of roughly 62 Mt in annual coal demand. Carbon capture and other emissions-reduction solutions will be critical to maintaining a viable domestic market.
Despite these structural headwinds, near-term sentiment has improved. Renewed funding for fossil fuel projects in the United States, coupled with recognition of coal’s role in baseload power generation amid rising electricity demand and grid constraints, supports continued industry relevance.
In this balancing act between resilience and transition, South Africa’s coal sector remains indispensable in the short term, supporting energy security, industrial activity and export revenue, while facing inevitable structural contraction over the longer term.
Additional source: Mining Indaba
