Coal exports remain a significant topic globally, and in South Africa, the Richards Bay Coal Terminal (RBCT) stands out as a major contributor to the country’s export performance.
According to Reuters, exports from the company rose by 10% in 2024, reaching 52.08 million metric tons, the highest in three years. This was made possible by better rail services from Transnet, the state-owned logistics company after they included a recovery plan and a partnership with RBCT in late 2023, which helped fix transport issues.
This growth comes after exports dropped to 47.21 million tons in 2023, the lowest in over 30 years. Transnet had been dealing with old infrastructure, theft, and delays. Even with the improvement in 2024, exports are still far below the 76 million tons recorded in 2017.
However, the boost in exports is good news for the government. In 2023, the coal sector brought in R16 billion through taxes and royalties and contributed R202 billion to South Africa’s GDP. With better rail performance, the government stands to earn even more to fund its national budget.
Tough times for mining companies
Despite the improvement, mining companies still face tough challenges. Falling global coal prices, weak demand, and logistical issues have cut into their profits. All these led to the decline the mining tax revenue has settled with since 2017. If more decline persists as a result of these issues, some companies may have to cut back operations, which could lead to fewer jobs and less investment in the sector.
Investors have also become very cautious. With constant problems like theft and unstable infrastructure, foreign investments in South Africa’s mining industry have slowed. Reports have shown that 2023, the country received $3.44 billion in foreign direct investment (FDI), marking a 62.74% decrease from 2022 which was $9.25 billion.
Is there hope?
Yes, but it depends on what happens next. The rail system improved in 2024, which is a big step forward. If this continues, South Africa could attract new investors. Global coal demand, especially in countries like India and China, is still strong, offering other companies a chance to grow.
To stay competitive, South Africa must fix its infrastructure, improve its policies, and prepare for the global shift to cleaner energy. The coal sector still has potential, but it will need steady support to thrive in the future.
