Agri-processing and basic service delivery as foundation for a just transition in Mpumalanga

ONE OF THE realities facing South Africa is, that without policy intervention, Mpumalanga’s economic contraction will start to increase rapidly. This is the result of a combination of factors including the reliance of the Mpumalanga economy on the extraction of coal and the failure of municipalities to deliver basic services.

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COAL mining, like any extractive industry, leads to depleted reserves and closure liabilities, says the author.

(MANIE DE WAAL Bloomberg)

Coal mining, like any extractive industry, leads to depleted reserves and closure liabilities. This is evident in the many ghost towns scattered all over the South African landscape. The mine closure challenge is how to create meaningful economic activity after mining has stopped and how to rehabilitate the area to a state in which the negative environmental impacts of mining are sufficiently mitigated.

One of these challenges, how to create meaningful economic activity could be solved by following a pragmatic approach using the policy instruments as proposed in the “South Africa's Energy Sector Investment Requirements to Achieve Energy Security and Net Zero Goals by 2050” study.

The study confirms that the Green Industrialisation (GI) scenario through 2030 and 2040, a high-renewables system supported by flexible generation and batteries, with a spend profile that front-loads grid investment and build-out capital, is the preferred scenario.

The GI scenario does help to bring a solution to the Mpumalanga challenge of economic contraction, and longer term job losses as a result of an economy reliant on a single extractive industry.

The question of how the GI scenario will impact Mpumalanga, has been explored and partially answered using macroand micro-economic studies.