Fears of job losses if coal power is ditched in hurry

Delegates from Mpumalanga at the ANC’s policy conference currently under way launched a pushback at the pace of the government’s intended transition to a low or net zero carbon emissions.

This was revealed by ANC head of economic transformation Mmamoloko Kubayi last night.

She said the concerns raised by the province, which is rich in coal deposits, was that the move away from coal will lead to massive job losses in the province.

Kubayi said one of the proposals put on the table was that the government adopt the approach it took with regards to nuclear energy and implement the just transition framework at a “pace and scale” the country can afford.

Mpumalanga’s economy is heavily reliant on coal.

There are 73 collieries in South Africa with most (61) situated in the Mpumalanga coalfields.

Kubayi said the policy discussions on a just transition took into consideration the need to power the economy and how will workers in the industry will be affected.

South Africa secured $8.5-billion in loans and grants at the COP26 summit in Glasgow  in November  from a group of rich nations to finance its migration away from coal.

Fitch Solutions, the affiliate of Fitch Ratings, has backed South Africa’s coal production to rise in the coming years, despite the global push towards a transition to  a green economy.

The research firm said its estimates were largely due to the country’s heavy reliance on coal-fired energy, demand from export markets, in particular Asia and China, and continued financing from SA banks.

“South Africa is among the most reliant on coal globally for its electricity generation. It has maintained a high coal-power generation over the last five years, and we expect its reliance to average 85.5% between 2022 and 2030, compared with 90% over 2014-2021,” Fitch said.

The ANC is also contemplating declaring youth unemployment in the country a national crisis to avert simmering social tension.

The country’s unemployment rate came in at 34.5% in the first quarter of the year.

The expanded definition of unemployment, including people who have stopped looking for work, was at 45.5%, down from 46.2% in the fourth quarter.

The youth unemployment rate, measuring job-seekers between 15 and 24 years old, is  currently at 63.9%.

Kubayi also came out swinging against the private sector for not investing in the economy. This is as  pressure mounts on President Cyril Ramaphosa to deliver on the social compact he promised in his state of the nation address in February. Kubayi has slammed big business for failing to come to the party.

Ramaphosa said his administration and its social partners – government, labour, business and communities – were working to determine the actions they will take together to a “new consensus”, which recognises that the state must create an environment in which the private sector can invest and unleash the dynamism of the economy.

“We have begun discussions on what trade-offs are needed and what contribution we will each need to make. We have given ourselves 100 days to finalise a comprehensive social compact to grow our economy, create jobs and combat hunger,” he said at the time.

However, the 100 days have come and gone without a social compact in place.

Former president Thabo Mbeki has sharply criticised Ramaphosa for his failure to deliver on his promises in the face of a rise in unemployment and inequality.

Kubayi said business has failed to play its role despite Ramaphosa’s administration having made significant progress in addressing bottlenecks raised by captains of industry.

“Some of us have been very vocal in the social compact discussion that we do not see tangible proposals from business to assist us. For instance, there is no commitment to assist us in reducing employment. The major issue is that businesses must put their money where their mouth is.

“We have done almost everything that we have committed to. Almost 70% of those things we committed to have been done.

“Spectrum has been released, [there has been a] reduction of time in terms of application of water licences, and the review of environmental impact assessments.”

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