Muddled Mantashe wallows in energy confusion

Can Mantashe extricate himself from the false dichotomy of coal-versus-renewables?

Gwede Mantashe
Gwede Mantashe
Image: VELI NHLAPO

The economic devastation linked to this month’s unrest has put the government’s reform agenda on the line.

It means it’s now more important than ever to get cracking with reform — particularly in the energy and telecoms portfolios. But when it comes to energy, Gwede Mantashe is one confounding person.

Watching the mineral & energy resources minister discussing his portfolio quickly revives memories of his time at Luthuli House, when he was secretary-general of the ANC. Mantashe was always ready for an argument. 

Recently, Mantashe addressed an online seminar hosted by Absa where he explained the government’s policy towards renewable energy and decommissioning coal power stations.

Now, it is easy to box Mantashe into the pro-coal faction — even if he denies that he is either pro-coal or anti-renewables. 

This impression was only reinforced in the aftermath of the recent presidential announcement about embedded generation, which allows companies to produce 100MW of energy and sell their surplus to the grid. 

The markets loved this moment. They billed it as a “blood on the floor” event, in which Mantashe ended up with a bloodied nose in a standoff where President Cyril Ramaphosa was the winner. 

Mantashe himself admitted at the Absa seminar that Ramaphosa had twisted his rubber arm, leading to the 100MW number, instead of a lower figure — anywhere from 10MW to 50MW. Mantashe had taken a lot of stick in the preceding weeks, especially as he argued that anything more than 10MW would lead to chaos.

And yet, in recent days, he asserted that the government’s approach was consistent and grounded in a long-term plan energy plan where renewables and other forms of power, including nuclear, would gradually reduce the proportion of coal in the mix.

Our duty as government, working with the state, is to execute and implement … a policy called [the] integrated resource plan … it talks to now, and it talks to the future, and the security [of] supply and moving to low carbon emissions,” he said at the Absa seminar.

This, of course, should be no revelation: the clamour for renewable energy is strong, and the government’s journey from a high-carbon-emission economy to a low-carbon economy is as old as the Ramaphosa administration itself.

The problem is, the road to this “new energy state” has been made controversial by several factors: first, government lethargy itself, and its failure to articulate its policy; and second, politics. And in this murky world, lobbyists operate in the dark corners, with brown envelopes and tog bags full of cash at the ready.

Clear public policy, government efficiency and investor confidence are the collateral damage of this politics.

All of which means that, instead of a clear plan to implement the integrated resource plan backed by solid investor buy-in, Mantashe’s ministry and the industry are mired in a constant but false coal-energy dichotomy not of their own creation. 

In that dichotomy, renewables are seen as the firm favourites of big business, with coal an anachronistic fossil fuel that survives purely due to the lethargy of Mantashe and his department. And the false impression is created that only big business and tree huggers are the genuine proponents of green energy. 

Mantashe has to consider how to extricate himself from this caricatured situation — but it won’t be easy. 

There are pitfalls in whichever option he chooses: if he were to genuinely de-emphasise coal, the fossil fuel would become a policy orphan where no one would address the collateral damage to towns whose coal-based economies would quickly become ghost towns.

All about the financing

Even as Mantashe spoke at the Absa seminar, it was clear that many of the level-headed listeners in the room, whose businesses may also be looking for any sign of opportunity in energy, appreciated this dilemma. 

Simi Siwisa, Absa’s head of public policy, said this discussion must be sensitive to SA’s status as an emerging market. 

The transition to net zero [carbon emissions] in emerging markets requires a nuanced approach to reduce economic and socioeconomic costs on such countries,” she said. “On the macroeconomic front, fossil-fuel-based economies might have balance of payments difficulties should the transition be not well managed.”

Siwisa’s view is not much different from Mantashe’s — but the politician in him will always put it in his own way: “We are not Germany,” he will say. “We don’t have a neighbour that is France.”

When this debate is stripped bare, and its constituent parts recognised, we may find a better way to move forward and create a much more certain environment for investors to understand. 

But the government will also need to lead another conversation about funding coal mining in the context of the “just transition” to a low-coal economy. 

As it is, banks in SA and overseas are already turning up their noses at new coal projects. As a result, there are many junior miners with mining rights in coal-rich areas that will struggle to realise their potential, even if they’re able to produce export-quality coal.

As Siwisa put it:  “There should be a clear strategy to replace foreign currency income from fossil fuel exports. Countries like Angola and Nigeria fall in this category. Just transition should also not be considered as a single event, but rather a long-term pathway that will balance medium-term priorities with long-term measures to address climate change.”

She pointed out that a country like SA, with high unemployment, has to consider a path in which long-term quality jobs are protected. Especially during Covid, the economic shifts need to happen, but gradually.

Unless the previous Paris commitments on climate finance are honoured, there will be limited progress

At the heart of the transition, the debate is financing. Unless the previous Paris commitments on climate finance are honoured, there will be limited progress,” she said. 

Mantashe, as we know, is fond of anecdotes and stories. During his time at Luthuli House, he often used to narrate a tale from Eastern folklore, where herders found they could rely on a caterpillar to find their cattle. No goal, in other words, is ever that simply attained: it takes nuance and strategic skills. 

The debate about financing the legacy problem of coal is similarly far more nuanced than the banal coal-versus-renewables dichotomy suggests. 

Positions are often driven by fundamentalists — and when you throw in the government’s often inept communication, you can see why policy certainty on this issue has been the first casualty.


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