Coal as a strategic resource in South Africa

Abstract

The higher price of oil and gas has positioned coal as the premium source of energy. This is likely to remain so as electricity demand is steadily rising. Listed as a strategic resource to the South African economy, coal attracts approximately 20% of the workforce of the mining sector. The national beneficiation strategy intends to develop this mineral wealth to its full potential for the benefit of the population. This paper explores the implication of coal as a strategic resource and discusses whether this may benefit the South African economy. Supply, demand, and geopolitical factors are considered. A framework for coal as a strategic resource is proposed while the need for clear differentiation between critical and strategic resources is highlighted. Concerns raised by investors in the mining industry are also discussed. The proposed framework is expected to contribute towards planning for a secure future of coal. South Africa is rich in mineral resources, therefore, it is necessary to explore the future of coal as a strategic resource; and establish benefits and evaluate the impacts, including whether it will benefit the economy.