Transparency, accountability and ethics between coal miners and Eskom was put in the spotlight during a panel discussion at the Joburg Indaba.
The panel discussed the outlook for energy supply, the coal mining industry and the just transition towards cleaner energy sources. Participants in this panel were Lullu Krugel, chief economist and partner at PwC South Africa; Lucky Kgatle, senior vice president at Sasol Mining; July Ndlovu, CEO at Anglo American Coal South Africa, Dr Nombasa Tsengwa, MD for minerals at Exxaro Resources and Mpumelelo Mkhabela, Menar chairperson.
Speaking during the panel discussion, Mkhabela called on coal producers to do their part in improving transparency and accountability in their relationship with Eskom. He suggested that a code of ethics should regulate contractual arrangements that ensure commercial viability to both the supplier and purchaser of coal – not one at the expense of the other, resulting in public harm.
“The coal sector has been under attack. Coal has earned a bad reputation in South Africa largely because it has become associated with load shedding. As an industry we need to assist Eskom by providing it with coal at fair prices in a reliable manner in the interest of the economy. This will also improve the sector’s reputation,” Mkhabela said.
Ndlovu shared similar views saying that coal had become the commodity that many loved to hate, despite being unable to live without it. He also pointed out that coal was a commodity that supports human development.
Mkhabela also mentioned that implementation of an ethical code would bring many benefits for Eskom, including increased levels of transparency and accountability.
He said coal producers should consider conducting a socio-economic impact study to show the benefits of coal mining. “If we looked at the total contribution of coal producers in terms of social labour plans, local economic development plans, local procurement opportunities as well as employment, the economic significance of coal mining and would become very clear.”
Tsengwa noted that coal producers need to abide by ESG standards. “Some investors are calling ESG-specific meetings. We must be seen and be transparent about the fact that we are moving towards creating a cleaner environment,” she said.
According to Mkhabela, a just transition to cleaner energy generation must include usage of cleaner coal technologies. “The government should consider a policy position that promotes research and development to develop those technologies to enable South Africa to benefit from its coal endowment in an environmentally sustainable way.”
Kgatle added that the industry needed to have more than binary conversations (either coal or renewables). “We need to talk to government at policy making level as well as international funders who can help fund these initiatives.”
Mkhabela also mentioned Menar’s support for Eskom’s CEO Andre de Ruyter’s commitment to procure coal in a robustly competitive manner. He stressed that coal producers should also do their part by helping Eskom to make sure that it’s commercially viable and is able to purchase the latest clean technologies for its power stations. These technologies include carbon capture and storage systems. “If we don’t support Eskom, we will be shooting ourselves on the foot,” he said.
Concluding the discussion, Tsengwa said, “Coal still has a role to play in SA. We must engage in the SA story for the just energy transition. We must talk about how do we mine coal responsibly – these are conversations that must be had.”