Sasol’s extensive underground mining infrastructure in Secunda, Mpumalanga, illustrates the scale of the economic systems that South Africa must eventually reshape as it reduces its dependence on coal, with the transition affecting not only mines and industrial facilities but also workers, suppliers, municipalities and communities whose livelihoods and public revenues are tied to the coal economy. The issue is becoming increasingly important as South Africa seeks to reduce emissions while maintaining energy security, industrial capacity and employment in the country’s most coal-dependent province.
The scale of Sasol’s operations helps explain why the transition cannot be treated simply as a question of replacing one energy source with another. Sasol’s Secunda complex is built around a large coal-based industrial system, with underground mining infrastructure feeding its synthetic fuels and chemicals operations. Historical industry data show that Sasol’s Secunda collieries have produced tens of millions of tonnes of coal annually, while the company has maintained an extensive network of mines, processing facilities and associated infrastructure around the town.
The underground network is effectively part of a wider industrial ecosystem that has developed over decades. Its economic significance extends beyond the physical mine workings. Mining supports contractors, transport operators, engineering companies, retail businesses and households, while coal-related activity contributes to municipal revenue and local economic demand. As a result, changes to Sasol’s coal consumption or mining requirements have implications well beyond the boundaries of the company’s operations.
This is particularly significant in Mpumalanga, which remains the centre of South Africa’s coal economy. The country’s Just Energy Transition Investment Plan identifies the province as the location of 12 of Eskom’s 15 coal-fired power stations and around 85% of South Africa’s coal-mining jobs. The coal value chain provides direct employment to almost 90,000 people in mines and power plants, while supporting additional jobs through suppliers and other economic activity.
The concentration creates what policymakers describe as a transition risk: the same economic structure that has provided employment, industrial output and electricity for decades is also among the most exposed to decarbonisation. For communities around Secunda, the consequences of a reduction in coal demand would therefore not be limited to mining jobs. They could affect household incomes, local businesses, municipal finances and demand for public services.
Sasol has recognised the scale of that exposure in its climate planning. The company has previously said that its energy business could experience significant socio-economic effects as it progresses towards its 2050 net-zero ambition, particularly after 2035 if mitigation measures are not implemented. Sasol has also cited research suggesting that the wider coal-mining sector could face substantial direct, indirect and induced employment impacts as the economy transitions away from coal.
The challenge is complicated further by the nature of Sasol’s industrial process. Unlike a conventional coal-fired power station, the Secunda operation uses coal as a feedstock for producing synthetic fuels and chemicals. That means reducing coal use requires changes not only to electricity generation but also to industrial processes, feedstocks, technology and supporting infrastructure.
A recent 2026 sector assessment by the Trade & Industrial Policy Strategies institute notes that Sasol has outlined mitigation measures including energy efficiency, renewable-energy procurement, sustainable carbon feedstocks and carbon capture, utilisation and storage. The assessment also notes uncertainty around the longer-term transition pathway for the Secunda complex, reflecting the technical and economic difficulty of transforming a large coal-based industrial system incrementally.
That uncertainty matters for investment decisions. Companies need sufficient time to determine whether existing assets can be repurposed, whether new technologies are commercially viable and what infrastructure will be required. Governments, meanwhile, need to plan for the economic consequences of changing industrial activity without undermining electricity and fuel security.
For South Africa, the financial dimension is particularly important. The country has secured international commitments to support its Just Energy Transition, but much of the financing is directed towards electricity, electric mobility and green hydrogen, while the economic restructuring of coal-dependent regions requires investment in skills, infrastructure, small businesses and alternative industries.
The experience of Komati, where a coal-fired power station was closed and a renewable-energy redevelopment programme introduced, has already demonstrated the difficulty of ensuring that new investment translates into immediate local economic benefits. The Financial Times has reported that the Komati project faced significant social and economic challenges, including concerns over limited local employment opportunities following the plant’s closure.
The lesson for Secunda and other coal-dependent areas is that the sequencing of the transition matters. If coal-related economic activity contracts before alternative industries, skills programmes and local infrastructure are sufficiently developed, communities can experience the costs of transition before they see the benefits of new investment.
South Africa’s policymakers are increasingly examining economic activities that could make use of existing industrial capabilities and infrastructure. A 2024 employment strategy for Mpumalanga identified sustainable aviation fuel as one potential area for diversification, drawing on the province’s existing synthetic-fuels expertise, industrial infrastructure, agricultural land and access to regional markets. The study estimated that, depending on the technology pathway, the sector could support about 25,000 direct jobs, although significant investment and technological development would still be required.
Other opportunities include renewable-energy generation, battery storage, green manufacturing, land rehabilitation, agriculture and services. The World Bank’s Mpumalanga Jobs and Energy Transition project similarly focuses on employment, skills development, local economic diversification and sustainable energy solutions in coal-dependent municipalities. The project identifies the province’s ageing power infrastructure and dependence on coal as both economic risks and potential areas for new investment.
Yet diversification carries its own constraints. New industries require reliable electricity, transport infrastructure, water, financing, technical skills and functioning local institutions. They also need markets capable of supporting commercial activity beyond the life of public subsidies. This makes the transition partly an industrial-policy challenge rather than solely a climate-policy exercise.
The social dimension is equally important. Mining communities have developed around long-established employment structures, housing, schools, transport networks and local businesses. Mine closures can therefore produce effects that persist after workers leave the payroll. A reduction in economic activity can weaken municipal revenue, increase pressure on public services and reduce the customer base for local businesses.
This is why South Africa’s just-transition debate increasingly centres on the concept of a transition that is geographically and economically specific. National targets alone cannot determine how a town such as Secunda should diversify. The requirements of a coal-producing municipality differ from those of a city dominated by manufacturing, agriculture or services.
The 2026 Coal Sector Jobs Resilience Plan points to the same institutional challenge. It notes that previous transition initiatives have faced constraints including procurement problems, feasibility challenges, limited support beyond the immediate industrial site and difficulties coordinating community development with local government. The implication is that even when finance is available, implementation capacity can determine whether projects produce durable economic alternatives.
For Africa, the wider significance extends beyond South Africa. Across the continent, energy systems are being asked to expand access while simultaneously reducing emissions. Countries with coal, oil and gas industries face the additional challenge of managing the economic value of existing assets while preparing for changes in global energy markets and climate policy.
South Africa’s experience is therefore an important test of whether an emerging-market economy can decarbonise an industrial base without creating a parallel development crisis. The 65km-scale underground infrastructure associated with Sasol’s operations is a physical reminder of how deeply energy systems become embedded in local economies. Replacing the output of such a system is only one part of the task; replacing the economic functions built around it is considerably more complex.
The central issue for the just transition is consequently not whether South Africa can reduce its dependence on coal, but whether new sources of employment, investment and public revenue can be established at sufficient scale and speed to support communities as the existing system changes. For Secunda and Mpumalanga, the outcome will depend on the interaction between corporate investment, government planning, infrastructure development, skills, private capital and the ability of local institutions to manage change.
The transition will ultimately be measured not only through emissions reductions, but through whether regions that have powered South Africa’s industrial economy can remain economically viable as that system evolves. Sasol’s underground mining network provides a clear illustration of the scale of the assets involved, and of why South Africa’s energy transition is, at its core, also a question of economic restructuring, fiscal resilience and regional development.
