Rising Geopolitical Tensions Create New Opportunities for South Africa’s Coal Industry.
The escalating conflict involving the United States, Israel and Iran has sent shockwaves through global energy markets, creating unexpected opportunities for South Africa’s coal export sector. As oil prices fluctuate, shipping routes face disruption and countries prioritise energy security, demand for coal has surged across several international markets.
While South African coal producers stand to benefit from higher export volumes and stronger commodity prices, environmental experts and climate researchers warn that increased coal production comes with significant social, environmental and economic costs.
Global Energy Market Disruptions Boost Coal Demand
The conflict triggered sharp increases in global fuel and transport costs. Crude oil prices briefly climbed to $126 per barrel before stabilising above $100, while diesel prices surged by 70%. Shipping costs also rose by approximately 40%, adding pressure to already strained global supply chains.
Although many analysts expected higher oil prices to accelerate investment in renewable energy, coal markets have also experienced renewed growth. Rising energy uncertainty has increased demand for thermal coal, particularly in countries seeking reliable and affordable energy alternatives.
This shift has positioned South Africa as a key beneficiary of changing global energy dynamics.
South Africa’s Coal Exports Increase Amid Energy Security Concerns
According to political economist Professor Patrick Bond of the University of Johannesburg, South Africa has experienced a significant rise in coal exports since the conflict intensified.
Asian thermal coal prices increased by between 11% and 12.6%, while premium Australian coal prices climbed to approximately $130.81 per tonne. Analysts suggest prices could rise further if liquefied natural gas becomes less competitive compared to coal.
South African coal producers have moved quickly to capitalise on the opportunity. Mining company Exxaro Resources announced that its export volumes could increase by as much as 12% in 2026, reaching approximately 8 million metric tonnes compared to 7.1 million tonnes in the previous year.
The company attributed part of this growth outlook to geopolitical instability, higher energy prices and stronger global demand for coal.
Coal Export Volumes Reach Multi-Year Highs
Beyond price increases, export volumes are also recovering strongly.
South Africa’s coal exports are expected to approach 60 million tonnes this year, up significantly from 47 million tonnes in 2021 when logistical challenges at Transnet disrupted rail transportation.
India remains one of the largest destinations for South African coal, contributing to sustained export demand.
Higher coal prices and stronger export volumes have translated into increased revenues for mining companies and investors. Exxaro, for example, declared shareholder payouts of R6.3 billion in 2026 despite reporting lower profits, highlighting the sector’s resilience during global market uncertainty.
South Africa Becomes a Major Coal Supplier to Israel
South Africa’s role in global coal markets has become increasingly significant following Colombia’s decision to halt coal exports to Israel in 2025.
The move created a supply gap that South African exporters were well positioned to fill. As a result, coal exports from South Africa to Israel rose dramatically, increasing by 87% during the three months leading up to November 2025.
Export volumes reached their highest levels since 2017, with South Africa projected to account for approximately 55% of Israel’s seaborne coal imports—more than triple its previous market share.
This growing trade relationship highlights the complex intersection between energy security, international politics and economic opportunity.
Tension Between Coal Growth and South Africa’s Just Energy Transition
The resurgence of coal exports presents a challenge for South Africa’s climate commitments.
The country has secured billions of rand in international climate finance to support a just energy transition and reduce dependence on fossil fuels. However, rising global coal demand continues to create strong financial incentives for mining companies to expand production and exports.
This contradiction has sparked debate among policymakers, environmental groups and civil society organisations about the future direction of South Africa’s energy strategy.
Critics argue that continued coal expansion undermines national and international climate objectives, while supporters point to the industry’s role in economic growth, employment and export earnings.
Environmental and Social Costs of Increased Coal Production
Climate researchers caution that the economic benefits of coal exports are not shared equally.
Communities located near coal mines and coal-fired power stations continue to experience the environmental and health impacts associated with coal extraction and combustion. These impacts include air pollution, water contamination, land degradation and increased health risks.
Professor Bond argues that coal remains one of the largest contributors to climate change globally.
“Combustion of coal is the main cause of the climate crisis,” he says, noting that mining operations also contribute to severe environmental damage and local pollution.
Gender and climate change researcher Dr Thembi Luckett adds that the burden falls disproportionately on working-class communities living near mining and energy infrastructure.
These communities often face long-term environmental degradation while receiving limited economic benefits from the industry.
Coal Exports to Israel Face Growing Scrutiny
South Africa’s expanding coal exports to Israel have attracted criticism from advocacy groups and human rights organisations.
The issue is particularly sensitive given South Africa’s case before the International Court of Justice, where the government has accused Israel of committing genocide against Palestinians in Gaza.
Boycott, Divestment and Sanctions South Africa has argued that ongoing coal exports to Israel conflict with the country’s constitutional values and international legal obligations. The organisation has called on the government to halt exports entirely.
Who Benefits From South Africa’s Coal Export Boom?
The growth in coal exports has highlighted the concentration of ownership within South Africa’s fossil fuel sector.
Major stakeholders in the Richards Bay Coal Terminal include Exxaro, Sasol, Seriti, South32 Coal, Anglo Operations, Optimum Coal, Kangra and several other mining companies.
As global energy markets continue to react to geopolitical instability, these companies are likely to remain among the primary beneficiaries of rising coal demand.
The Future of South African Coal Exports
The US-Israel-Iran conflict has reinforced the complex role coal continues to play in global energy markets. While the crisis has created lucrative opportunities for South African exporters, it has also intensified debates around climate change, environmental justice and the country’s long-term energy future.
As governments worldwide balance energy security concerns with decarbonisation goals, South Africa faces a critical question: how to capitalise on short-term export opportunities while remaining committed to a sustainable and equitable energy transition.