General

MBABANE – Japan may hold the key to rescuing Eswatini’s coal industry from its steep decline, following revelations that the Asian economic giant has expressed interest in sourcing anthracite from the kingdom.

Minister for Commerce, Industry and Trade, Manqoba Khumalo, speaking to Eswatini TV while attending the Tokyo International Conference on African Development (TICAD), said Japan could serve as an alternative market for Eswatini’s coal exports at a time when its primary market, South Africa, is in turmoil. “Japan has shown interest in taking Eswatini anthracite,” Khumalo said. “We are actively exploring Japan as another viable market for our coal, particularly in light of the challenges we are facing with South Africa’s steel industry and energy-intensive sectors.”

Eswatini’s coal sector, once a dependable source of export earnings and jobs, has been rocked by a collapse in demand from neighbouring South Africa. Coal production plunged by 31.5 per cent year-on-year in the first quarter of 2025, according to the Central Bank of Eswatini’s (CBE) Recent Economic Developments report.

This contraction formed part of a wider 28.9 per cent drop in the mining sector, dragging the national economy into negative territory. Real gross domestic product (GDP) fell by 0.3 per cent on a seasonally adjusted basis, reversing the previous quarter’s growth of 1.7 per cent. The decline has its roots across the border, where high electricity tariffs have crippled South Africa’s smelting industry. Fourteen smelters have already shut down operations, cutting off demand for Eswatini anthracite, which plays a critical role in the smelting process.

Maloma Colliery Limited, the country’s largest coal producer, has already announced processes of retrenching some of its workers. Its Chief Executive Officer, Jabulile Shabangu, said the power crisis in South Africa had slashed orders, leaving mines with unsold stockpiles.

 “Electricity costs have severely impacted smelters, forcing closures and reducing demand for our product,” Shabangu explained. “This has undermined the viability of operations that once relied heavily on Eswatini’s coal.”

The downturn has reverberated across the entire coal supply chain. Logistics operator Grindrod Logistics Eswatini revealed that export coal demand has dropped by nearly 50 per cent at its Sidvokodvo operations, idling about 200 Eswatini-owned trucks and putting transporters at risk of asset repossessions. “Falling coal demand has put us in a very difficult position,” said Grindrod Logistics Director, Mkhululi Dlamini. “If the trend continues unchecked, retrenchments will deepen across the value chain. With Maloma already retrenching, fears are growing that the same could happen to our business.”

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Minister for Commerce, Industry and Trade Manqoba Khumalo. (Pic: File)