The Coal Mining Industry in South Africa 2025

This report on the coal mining industry in South Africa, including coal testing laboratories, provides information on reserves, production, prices and exports, notable players and corporate actions. There is information on rail issues and infrastructure which have seriously affected the industry, environmental issues, mine health and safety, and competition.

There are profiles of 22 companies including coal mining companies such as Exxaro Resources, Thungela Operations, Seriti Resources, ARM Coal, Ndalamo Resources, Zululand Anthracite Colliery and Canyon Coal, and coal testing companies such as Bureau Veritas Testing and Inspections, SABS, Intertek Testing Services, Cotecna and Mitra SK.

Introduction

• Although South Africa’s coal production has been decreasing over the past decade, it improved slightly in 2024 in response to higher domestic demand and an improvement in Transnet’s performance on the export line.
• The country was ranked the seventh-largest coal producer in 2024 producing 2.6% of the global total.
• South Africa was the sixth-largest exporter in terms of volume.
• Employment rose in 2024 and accounts for over 20% of total mining industry employment.
• Challenges include rail line issues, reducing demand from Eskom, rising input costs, and growing international opposition to coal mining and coal-fired power generation.

Market Trends

• Companies are increasing the use of renewable energy to reduce their carbon footprint, ensure the reliability of electricity supply and reduce electricity costs.
• Input costs are rising, caused mostly by increasing electricity tariffs.
• Mining companies are facing increasing pressure to cease their coal mining activities. Due to pressure from the public and their shareholders, some financial institutions are scaling back their funding of coal mining projects.
• Most coal mining companies realise they need to shift away from coal over the long term, so some are building renewable energy businesses or diversifying into other commodities.
• Production has been decreasing over the past decade, but is expected to increase over the short to medium term as exports rise amid an improvement in Transnet’s performance on the export line.
• Several companies are planning new mines to maintain or expand production levels.
• South Africa’s coal consumption is decreasing, largely due to reducing demand from Eskom as it gradually decommissions its coal-fired power stations.

Market Opportunities

• Companies could increase production and exports as Transnet’s performance on the export line is improving, and private sector participation is being introduced.

Market Challenges

• Coal mining companies’ operating margins are being reduced by rising input costs and low prices.
• Competition from other energy sources.
• Domestic coal sales are decreasing, largely due to reducing demand from Eskom as it gradually decommissions its coal-fired power stations and increases its electricity generation from renewables.
• Growing international opposition to coal mining and coal-fired power generation, due to environmental concerns.
• Transnet’s underperformance on the export line is causing lower coal exports and consequently lost revenue.

Outlook

• Climate change issues are expected to have a significant impact on the global coal mining industry in the future.
• Many countries have introduced measures to reduce coal in their energy mix, but coal consumption in emerging economies is expected to increase.
• Global coal production will increase slightly in 2025 before falling in 2026 due to low prices and weakening demand.
• Global exports are forecast to remain above 1,000Mt per year over at least the next five years.
• South African production is expected to increase in 2025 and 2026.
• The country’s coal consumption is decreasing, and the rate will largely be determined by Eskom’s pace of power station closures.
• As demand from Eskom declines, it is possible exports could increase.