Coal market in South Africa

Earlier Report Observations

From 2018 to 2020, South Africa's coal market size first rose slightly before receding. In 2018, domestic production was supported by Eskom's projected 40% increase in coal demand by 2020, which bolstered local supply. However, a regulatory environment described as 'toxic' discouraged new mine investment. The approval of a 14% Eskom tariff increase in mid-2019 raised power costs, affecting coal-fuel demand, while the emerging COVID-19 pandemic began disrupting global supply chains. By 2020, low economic growth in export markets and rising production costs, alongside ageing mine infrastructure, led to a decline in output and a contraction in the domestic market.

The downward trend continued through 2021 and 2022. A sharp post-pandemic price surge for coal, driven by recovering demand in Asia, did not reverse falling South African production, as no new major mining licences were issued due to investor concerns over financing and climate-policy risk. Consequently, domestic consumption shrank. The Russia-Ukraine war in 2022 significantly boosted European demand for thermal coal as a backup fuel, lifting export prices, but severe rail bottlenecks at the Richards Bay Coal Terminal limited the sector's ability to fully exploit these export opportunities, contributing to a further decline in the local market size.

After 2022, the sector faced sustained pressures. Transnet Freight Rail's operational constraints continued to hamper export logistics, while international carbon-border tax proposals from the EU created uncertainty for South African coal exporters. Domestic output kept falling as major state-owned mines approached end-of-life, with no new large-scale projects announced. Although policy focus on energy security supported coal's short-term role, the anticipated tipping point where renewable energy becomes cheaper than coal-fired generation by 2025 signaled growing structural challenges for the market.

Production coal in South Africa

In kind, 2018-2021, M t

South Africa was among the world's leading coal producers from 2018 to 2021, ranking 7th globally by production volume during this period.

Top producers of coal, 2018-2021

World map of production of coal, 2018-2021

Coal production in South Africa declined for the second consecutive year. In 2021, the country produced 228.6 million tonnes of coal, representing a 7.8% decrease compared to the previous year. Between 2018 and 2021, production fell by 9.7%, which translates to an annualized decline rate of 3.4%. The peak production was recorded in 2019 at 254.4 million tonnes, with the largest annual increase of 0.5% also occurring that year.

Annual dynamics of production in South Africa in kind, 2018-2021, M t

Exports coal from South Africa

Exports in kind, K t

Coal export volumes from South Africa declined for the third consecutive year. In 2021, exports totaled 65,777 thousand tonnes, marking a significant decrease of 12.3% compared to 2020. Over the period from 2018 to 2021, exports decreased by 19.1%, with a compound annual growth rate (CAGR) of -6.8%.

Annual dynamics of product's exports from South Africa in kind, 2018-2021, K t

From 2018 to 2021, India, Pakistan, and South Korea were the main markets for South Africa's coal exports by volume. India accounted for 47.6% of exports, Pakistan for 15.4%, and South Korea for 5.1%. Together, these three countries represented 68.0% of total export flows.

Structure of product's exports in kind by countries, 2018-2021

World map of product's exports from South Africa in kind, 2018-2021

Exports in value, M $ US

After a two-year decline, South Africa's coal exports in value terms increased in 2021. Exports reached 6,023 million US dollars, showing a sharp advance of 53.4% from the previous year. However, over the period from 2018 to 2021, exports decreased by 4.1%, with a compound annual growth rate (CAGR) of -1.4%. The lowest value was recorded in 2020 at 3,926 million US dollars, with the largest annual decline of 24.8% occurring in 2019.

Annual dynamics of product's exports from South Africa in value, 2018-2021, M $ US

From 2018 to 2021, India, Pakistan, and South Korea were the key destinations for South Africa's coal exports by value. India accounted for 43.9% of exports, Pakistan for 15.8%, and South Korea for 6.0%. Collectively, these three markets represented 65.7% of total export flows in value terms.

Structure of product's exports in value by countries, 2018-2021

World map of product's exports from South Africa in value, 2018-2021

Imports coal to South Africa

Imports in kind, K t

In 2021, South Africa's coal imports reached 2,878 thousand tonnes, indicating an advance of 46.4% compared to 2020. Over the period from 2018 to 2021, imports decreased by 5.7%, with a compound annual growth rate (CAGR) of -1.9%. The lowest import volume was recorded in 2020 at 1,966 thousand tonnes, while the peak was in 2019 at 3,433 thousand tonnes. The largest annual decline of 42.7% occurred in 2020.

Annual dynamics of product's imports to South Africa in kind, 2018-2021, K t

From 2018 to 2021, Australia, Botswana, and Mozambique were the main sources for South Africa's coal imports by volume. Australia accounted for 42.7% of imports, Botswana for 15.7%, and Mozambique for 10.6%. Together, these three countries represented 69.0% of total import flows.

Structure of product's imports in kind by countries, 2018-2021

World map of product's imports to South Africa in kind, 2018-2021

Imports in value, M $ US

The market exhibited an unstable trend throughout the timeframe. The highest import value was registered in 2018, while the lowest was in 2020, reflecting a 2.5-fold gap between these years. In 2021, South Africa's coal imports reached 395 million US dollars, indicating an increase of 84.9% compared to 2020. The minimum value was recorded in 2020 at 214 million US dollars, with the largest annual decline of 52.7% also occurring that year.

Annual dynamics of product's imports to South Africa in value, 2018-2021, M $ US

From 2018 to 2021, Australia, Mozambique, and Russia were the main suppliers of coal to South Africa by value. Australia accounted for 47.3% of imports, Mozambique for 14.1%, and Russia for 8.8%. Together, these three countries comprised 70.2% of total imports in value terms.

Structure of product's imports in value by countries, 2018-2021

World map of product's imports to South Africa in value, 2018-2021