South Africa Sector Jobs Resilience Plans

Last updated: 3 August 2023

South Africa has undertaken early national engagement on a just transition for its coal industry in a context where coal accounts for 73% of the country’s energy supply and about 1.5% of formal employment. In 2017, the Department of Environment, Forestry and Fisheries and the Department of Trade, Industry and Competition (formerly Economic Development Department) commissioned Trade & Industrial Policy Strategies to carry out a National Employment Vulnerability Assessment (NEVA) to evaluate the impacts that climate change would have on companies, workers and communities along the value chain in the following sectors: coal, metals, petroleum-based transport, agriculture and tourism.

The 2019 NEVA found that South Africa’s coal mining sector, which is highly concentrated among a few companies, employed around 89 000 workers in 2018 and accounted for 20% of mining jobs in the country. That same year, state-owned utility Eskom employed 50 000 workers, while petrochemical company Sasol had 26 000 workers in South Africa. The NEVA identified four main risk factors for the country’s coal value chain, including longer-term risks from abroad that importers reduce demand for South African coal and global efforts to cut coal consumption mount as well as domestic risks that consumers lower their demand for coal-fired electricity due to an expansion of renewables and efficiency and policies for lower carbon intensity from electricity generation.

To complement the NEVA, the country’s National Climate Change Response White Paper requires the development of Sector Jobs Resilience Plans (SJRPs) for each value chain. The SJRPs aim to assess opportunities to transition these sectors to green jobs and industries and to protect vulnerable groups that will be impacted by the changes.

For coal, the SJRP estimated in 2020 that value chain employment is more than 120 000 workers, out of which 80 000 work in coal mining, the largest employment sector. The power generation sector (Eskom) accounts for 12 000 jobs, the petrochemicals sector (Sasol) for 26 000, and small coal truckers for 2 000 jobs. 15% of the workers in the coal value chain are women. 

The coal sector is highly localised in the Mpumalanga province, which houses most of the country’s coal mines, including Eskom power stations and Sasol’s coal-to-liquids plants. In particular, four districts in Mpumalanga supply nearly all of the country’s coal. 

The SJRP notes that workers in the coal value chain have better-than-average compensation and benefits compared to other formal workers, despite lower levels of education. In coal mining and heavy chemicals, the median monthly salary was ZAR 10 000 and in the electricity sector, around ZAR 15 000. This compares with the median salary for other formal workers of a little over ZAR 5 000. Moreover, in 2017, around 80% of workers in the coal value chain had retirement funds relatives to less than 60% for other formal workers. 

However, education levels among coal miners lagged behind formal workers in other sectors. The coal labour force with matriculation or less stood at 80% 2017, compared to 74% in other sectors. In addition, union membership was over 70% for coal miners, 67% for electricity workers and 45% for basic chemical workers. This compares with only 35% in the formal economy as a whole.

The SJRP framework, in addition to estimating the scale of displacement expected in a region, also offers recommendations for adjustment. It notes various areas for diversification, including in the renewable energy value chain through skills development, including in the maintenance and repair of renewable generation equipment, and the manufacture of renewables generation components and related services. Another area for diversification is beneficiation of coal waste products, which would require skills training and education to transition workers from coal mining and power plants, preceded by a thorough assessment of the potential for ash beneficiation. Lastly, the framework also identifies mine rehabilitation and repurposing as a diversification option. 

The SJRP framework notes that aggregated employment adjustment plans for all of Mpumalanga will not be effective as each local municipality has unique economic drivers, labour markets and infrastructure. Along these lines, the strategy highlights effective labour market strategies will require a comprehensive profile of affected miners, specifically a survey of mining firms, to get an accurate profile of miners’ age, background and skillset. It, therefore, calls for a study into the skills, experience, age and long-term career plans of workers that will be displaced by the sector’s slowdown in next ten years, funded by the Mining Qualifications Authority or the National Skills Fund. Such analysis could determine, for instance, if the age profile of workers warrants retraining and reskilling for younger workers or possible early retirement packages for older workers. 

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