Francois Steenkamp, University of Cape Town
South Africa’s move to renewable energy means that the coal industry will be phased out over the coming decades. This transition away from a fossil-fuel based economy will affect over 100,000 workers in coal mining and coal-fired power generation – and their families. Economics professor and director of the Development Policy Research Unit at the University of Cape Town, Haroon Bhorat, and economists Francois Steenkamp, Tsungai Kupeta and Lisa Martin researched how many workers will be affected by the transition, and came up with ideas for policies to lessen the impact of the transition on vulnerable households and regions.
What does South Africa’s coal industry look like?
Globally, coal mines are generally concentrated in certain areas. This means that the labour market effects of the transition away from coal are also mainly concentrated in particular regions. For example, in South Africa there are 78 operating coal mines. Of these, 65 (or 83%) are located in the south-west part of Mpumalanga province. These 65 mines also account for approximately 80% of total coal production.
Coal-fired power generation is also concentrated in Mpumalanga. Of the state energy provider Eskom’s 14 coal-fired power plants, 11 are located here. These account for 70% of Eskom’s operating capacity.
Coal mining on its own only accounts for 0.5% of total employment in South Africa. But coal-fired power generation and manufacturing industries account for a lot more jobs in the coal value chain. These include the chemicals and petrochemicals industry, and Sasol’s coal-to-liquid fuel plant, which uses 33% of non-exported coal. Aluminium, ferro-alloys and other metal producers use 12% of all non-exported coal. About 40% of South Africa’s coal is exported.
About 85% of South Africa’s electricity is produced by burning coal. This means that every electricity-dependent industry is to some degree ultimately linked to the coal value chain.
We reviewed all publicly available data on the coal industry for our research. But the data are limited. We were only able to measure the number of workers in coal mining and in coal power generation who could lose their jobs. It’s clear, however, that jobs could also be lost along the coal value chain.
Our research offers initial ideas on how to structure an approach where policies are tailored to the characteristics of the workers. Our future work aims to cost a potential policy package for the just transition.
How many coal industry workers will be affected by the transition?
Most of the coal mining workforce (75%) work in semi-skilled, craft and related trade (40%) and plant and machine operator (35%) roles in the coal mining industry.
Workers in craft and related trade roles include: miners and quarry workers (38% of this group of workers) and agricultural or industrial machinery mechanics and fitters (17%). They also include motor vehicle mechanics and fitters (9.57%), shot-firers and blasters (9.57%), and sheet-metal workers (8.7%).
Workers in plant and machine operator roles include mining plant operators (25.81%), and heavy-truck and lorry drivers (24.19%). Also in this group are crane, hoist and related plant operators (24.19%), lifting truck operators (9.68%), and earthmoving and related plant operators (8.06%).
Skilled technician occupations comprise 8.7% of jobs, of which electrical engineering technicians (20%), electronics and telecommunications technicians (16%) and safety, health, and quality inspection officers comprise the most jobs (32%).
Low skilled elementary occupations, which comprise 7.2% of jobs, include mining and quarrying labourers (51.85%) and helpers and cleaners in offices (37.04%).
In coal-fired power generation, the most recent figures we could get (2019) showed 30,481 employees aged mainly between 25 and 44 years old and employed in professional, technician and plant and machine operator occupations (high and semi-skilled).
We estimate that there are approximately 106,887 direct (mining) and indirect (power generation) jobs linked to coal.
How will these workers be affected?
Our research found that coal mining industry jobs are mainly formal sector jobs, with relatively better benefits than other formal sector workers. For example, in the coal mines, 81% of workers are permanent, 80% contribute to a pension fund and 68% have medical aid.
Coal-fired power generation jobs are also formal and 88% of the workers belong to a union. Our research found that both coal mining and power generation jobs have better employment conditions than the average formal sector job in Mpumalanga.
This means that even if every worker was placed in another job in manufacturing or construction (industries that typically provide alternative employment opportunities for coal miners), these jobs might not have working conditions as good as they have now.
Altogether, we found that 62% (28,400) of coal households were vulnerable: they have at least one dependent and no family members employed elsewhere.
What could make this transition just for coal workers?
We have started to work on a Just Transition policy matrix, grouping the workers, and identifying policies suited to the characteristics of each group.
Coal workers with a post-secondary education qualification, who work in high-skilled or semi-skilled occupations (29% of the workforce or 31,187 workers) will likely be able to find new jobs because of their high skill level. Apart from job relocation grants (where applicable), no assistance is needed.
Coal workers who have, at most, a complete secondary education, and who work in high- or semi-skilled occupations (66,928, or 63% of the workforce) might need a skills top-up to match them with jobs in other industries where their skills are best matched.
The 7.9% (or 8,416) who are employed in low-skill coal jobs are unlikely to find alternative employment and will need income support.
A further group of workers (9.5% or 10,139) who will retire in the next ten years might benefit from early retirement packages.
What needs to happen next?
South Africa needs to avoid the devastation that comes with coal mine closures, such as the hundreds of thousands of jobs that were shed when Poland, Germany and the UK closed down coal mines.
It’s very important to devise appropriate policy interventions so that the move away from coal is fair for the workers and their families. The coal industry workforce is diverse and a single approach will not be suitable for everyone. Policymakers will need several interventions to address the different needs of various worker groups.
For example, coal workers may match to alternative employment opportunities located outside Mpumalanga, and so these workers would need a job relocation grant. This is an example of a policy response.
Because the coal industry is located in certain places, policy support for the workers affected by the closure of the coal industry is concentrated regionally. This means that the just transition, rather than requiring broad national policies, requires more regionally contained policies. These should cater specifically for coal workers and their households.
Francois Steenkamp, Senior Researcher, University of Cape Town
This article is republished from The Conversation under a Creative Commons license. Read the original article.
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Source: The Conversation
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