How could the conflict between coal promotion and divestment affect South Africa?
South Africa faces policy conflict as coal promotion clashes with global divestment trends The promotion of coal by Minister Gwede Mantashe, who emphasizes transformation and Black ownership, stands in direct contrast to growing foreign investor aversion to the commodity, driven by pressure from pension boards like the Church of England. This global trend has caused foreign capital to ditch South African coal projects. Consequently, domestic Black investors have moved into this abandoned space, creating a complex policy environment for South Africa where national energy needs conflict with international climate finance demands.
- Effect
- Strong negative
- How direct
- Stated in the reporting
- When
- Over the long term
- The story
- Gone quiet
How it reaches South Africa
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Gwede Mantashe promoted the use of coal in the mining industry during an address, linking the commodity's viability to transformation and Black ownership in the sector. Mantashe cited Exxaro as an example of a company that is 31.47% Black empowered, while Thungela is 67.55% Black owned.
The full event1independent outlet -
The event pits Minister Gwede Mantashe's advocacy for coal—linked to transformation and Black ownership—against the pressure from pension boards for divestment. This conflict directly influences South Africa's national energy policy and investment climate. Growing foreign investor aversion to coal, spurred by the climate crisis and divestment efforts, has led to foreign capital ditching South African coal. This was evident when Thungela was demerged from Anglo American in 2021. As foreign capital withdraws from the coal sector, mostly Black, domestic investors have moved into this abandoned space, fundamentally altering the investment landscape within South Africa.
1 report connects these two. Brind only summarizes; follow a link to read the reporting itself.
- dailymaverick.co.za Oct 14
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country in southern Africa
Everything about South Africa
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The facts so far
As reported. Each one links to where it comes from.
- Thungela was demerged from Anglo American in 2021 against the backdrop of growing foreign investor aversion to coal.dailymaverick.co.za
- Anglo’s removal of thermal coal from its portfolio was in response to investor pressure, including from the likes of the pension board for the Church of England.dailymaverick.co.za
- Foreign capital has been ditching South African coal, and mostly Black, domestic investors have moved into this abandoned space.dailymaverick.co.za
- South Africa currently accounts for only about 4% of global emissions, despite being a major coal producer.dailymaverick.co.za
Why it matters
The conflict over coal represents a critical juncture for South Africa's economic future and energy transition. The country is caught between the urgent global call for climate action and the domestic political priority of transformation and Black economic empowerment. The flow of foreign capital is vital for the economy, and its withdrawal from the coal sector creates uncertainty regarding future infrastructure and energy development.
This dynamic is part of a wider global debate about resource wealth, where African nations argue for the right to use their resources for development, contrasting with the environmental concerns of the Global North. While South Africa's coal producers are embracing renewable energy projects, the political and financial tension over coal remains a defining feature of the national policy landscape.
What we don't know yet
- How will the government balance the need for transformation with international climate finance demands?
- What is the long-term capacity of domestic Black investment to replace the capital lost from foreign divestment?
What would change this answer
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Reporting
- dailymaverick.co.zaOct 14
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