Coal, which has been the workhorse of South Africa’s electricity system for generations, will continue to play a significant role for years to come. Those coal-fired power stations that remain in operation will also need to secure continued supplies of the energy mineral and Eskom has expressed a preference for doing this through long-term contracts. There is a risk, however, that these long-term coal-supply agreements could lock in South Africa’s coal dependence at a time when many countries are starting to actively retreat from coal and when the international community is considering the imposition of trade and investment penalties against products with a high carbon footprint. Already, it is becoming increasingly difficult to raise bank finance for coal-related investments and this trend is likely to only intensify.
