IS coal a critical mineral? The question has risen to prominence since South Africa designated coal as a “highly critical” mineral in its Critical Minerals Strategy released last year.
South Africa is the only country that has declared thermal coal as critical though India, the EU and the US have recently added coking (metallurgical) coal to their list of critical minerals. But most countries classify critical minerals as those that contribute to the energy transition, such as copper, lithium and rare earth metals. Copper and lithium are listed in the SA strategy as “minerals with moderate criticality”.
SA’s stance on coal found broad support at this week’s Mining Indaba with a number of commentators stressing that the metal’s importance to the country’s overall economy as well as security of supply should be the overriding criteria.
Mike Teke, CEO of coal mining group Seriti Resources, stressed that “we need to make decisions that are of interest to South Africa and the continent and not determined by geopolitics alone”. Michelle Manook, CEO of the Future Coal Alliance for Sustainable Coal added: “Coal is not a stranded asset. It is critical in the energy transition and in industrial processes that sustain many economies.””
The CEO of the Council for Geosciences, Siphelele Buthelezi, made the case for coal pointing out that recent surveys have shown that South Africa has in excess of 60bn tonnes of coal remaining, which was of sufficient quality for power generation and export grade blending.
Short-term sentiment towards coal also appears to be more optimistic with the Trump government introducing policy changes that enable financial institutions to reinvest in fossil fuels. There is also growing recognition that coal will remain essential in the short to medium-term to meet baseload power needs, not only in South Africa.
Despite these developments and the efforts by the South African government, it is unlikely to fundamentally change the course for the industry and lead to the investments needed for future production growth. Most financial institutions outside of the US refuse to fund coal projects.
It also comes at a time when the coal sector in South Africa is experiencing declining economic fortunes. The Minerals Council South Africa, in its 2025 Facts & Figures report released this week, estimates 2025 coal production to come in at 236 million tons (Mt), unchanged from 2024 levels but down by 9% compared to pre-Covid levels.
Total coal sales for 2025 are expected to decline by approximately 3% compared to 2024, primarily driven by a sharp 15% reduction in coal prices during the year. In response coal sector employment declined for the first time in four years to about 97,600 workers at the end of last year.
What is of greater concern is the Minerals Council’s outlook for the metal: “The Department of Mineral Resources’ Integrated Resource Plan, released in November 2025, projects a sharp decline in domestic coal consumption. Coal-based electricity generation as a share of Eskom’s installed capacity will fall from the current 59% to just 11% by 2042.
“Cumulatively, this could reduce annual demand by Eskom to approximately 40Mt from the current 108Mt. By all indications, this signals a challenging outlook for the coal sector and production over the next two decades,” the Council writes.
