Historical review of the relationship between energy, mining and the South African economy

Mining, energy and industrial development have been key to growth and development in South Africa. It is estimated that South Africa’s mineral wealth value is around $2.5 trillion (GCIS, 2012). Mining and the electricity industry co-evolved together due to the abundance of inexpensive coal. The electricity industry was spurred by the needs of a flourishing mining industry around the beginning of the twentieth century. South Africa’s electricity industry is embedded in what is known as the Minerals-Energy Complex (MEC). The MEC is described as the relationship between mining, energy intensive mineral processing, the coal-to-electricity sectors, and parts of the supportive transport and logistics infrastructure (Fine and Rustomjee, 1996). However, the continued reliance of South Africa’s electricity system on coal is increasingly under threat from international pressure to mitigate climate change. Additionally, sustained dependence on a resource-based economy is risky, not only because of finite supply but, more importantly, because emphasis on a global commodity market renders the economy vulnerable to short-term volatile capital flows, and less long-term labour absorbing economic growth. The main objective of this chapter is to discuss how South Africa faces the challenges and demands towards sustainable transitions.