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It is a strange time for SA’s coal miners.

They are coining it on global coal prices that have been hitting new highs since Russia invaded Ukraine and are now expected to stay high for at least another year or two.

But the miners know their days are numbered in the longer term as SA accelerates its transition from coal-fired power towards a cleaner, greener energy mix.

Both dynamics were on show this week as coal producer Thungela, the old Anglo American coal business that was spun out and listed last year, announced a surge in half-year profits, while unlisted coal producer Seriti announced a R892m acquisition of a majority share in renewable energy player Windlab.

Thungela is an export-focused coal business that is reaping the benefit of high global prices; Seriti, which sells about 70% of its output to Eskom, is focused largely on the domestic market. Together, Seriti and rival Exxaro are estimated to account for 80% of Eskom’s coal supply. The pressure on them to be responsible SA coal producers is huge; so too is the pressure to find alternatives to coal for a future in which Eskom and SA aspire to reach net zero carbon emissions by 2050.

At the same time, the opportunity is suddenly huge for new renewable energy producers. As part of its recent energy crisis plan the government has removed licensing requirements for companies wanting to generate their own electricity. It will also speed up its own procurement process for new renewable energy.

Exxaro had already ventured into renewable energy a decade ago through Cennergi. Now Seriti is to do so on a far larger, “platform” scale in SA and East Africa, with the Windlab deal it announced this week. It has partnered with Rand Merchant Bank and Standard Bank to buy out the Australian shareholders who owned Windlab, which will now give substance to the Seriti Green subsidiary, which the coal miner launched late last year. The deal is, in Seriti’s words, an exciting pivot for the company.

Windlab brings a 3.5GW pipeline of new renewable energy projects to Seriti, including 3GW to be developed by 2030 with investment of R75bn. Most of the projects are in SA, and particularly in Mpumalanga, which is the location of the Seriti coal mines that feed Eskom.

Seriti CEO Mike Teke has long advocated a responsible energy transition that would see SA decarbonise its economy in a way that does not destroy the lives of communities who rely on coal-fired power stations and the coal mines that supply them. The Windlab deal has the potential to tick a whole lot of boxes in support of that. It will set Seriti up as a meaningful player in the renewable energy business, which a decade hence could rival its coal business as a contributor to earnings. It will enable the group to forge ahead with embedded generation projects at its own coal mines, and potentially neighbouring mines, that will not only reduce their carbon emissions but also cut their electricity costs.

Those lower costs will hopefully be fed through to Eskom — and ultimately to electricity consumers — by way of lower coal prices. Perhaps most important is that the construction of multiple new renewables projects in Mpumalanga could provide a real alternative for the province’s coal-fired power station communities as some of the oldest power stations are closed over the next decade. Its access to sites close to Eskom’s transmission grid should give Seriti an advantage in new projects; so too might its status as a black-empowered energy company, in a renewable energy space in SA that has tended to be dominated by multinationals.

Those who want to see a faster green transition will no doubt decry Seriti’s firm intention to stay in coal. And it would be easy to see its venture into renewables as a ploy to legitimise its continued coal operations.

But SA needs more large, well resourced players in its burgeoning renewable energy industry. And it needs to find creative ways to effect the just energy transition the government has promised. Coal producers becoming solar and wind energy producers may be just what’s needed.