Business

MBABANE - Fears of widespread job losses are mounting across Eswatini’s coal mining and logistics sector.

This follows a sharp slump in coal output that has shaken the industry’s foundations.

Logistics operator Grindrod Logistics Eswatini has warned that without urgent interventions, hundreds of jobs and businesses tied to the coal supply chain could be lost.

Yet, the company says it is already working on solutions to avert the crisis, diversifying into new mineral streams and strengthening its partnership with Eswatini Railways to safeguard employment.

According to the Central Bank of Eswatini’s (CBE) Recent Economic Developments (RED) report for June July 2025, coal production dropped by 31.5 per cent year-on-year in the first quarter of 2025, reflecting weak demand from South Africa’s steel industry.

The contraction was part of a broader 28.9 per cent decline in the mining sector, which pulled the economy into negative territory. Real gross domestic product (GDP) shrank by 0.3 per cent on a seasonally adjusted basis, compared to growth of 1.7 per cent in the previous quarter.

The decline is rooted in developments across the border. Temporary stoppages in South Africa’s steel industry and retrenchments in its smelting operations have eroded demand for Eswatini’s coal, the country’s most significant mineral export. This downturn has placed pressure not only on miners, but also on the logistics companies, truckers and businesses linked to the coal supply chain.

In an interview with the Times Business Desk, Mkhululi Dlamini, Director of Grindrod Logistics Eswatini, said the company is already experiencing the fallout from the downturn.

“Falling export coal demand has impacted nearly 50 per cent of our normal volumes at Sidvokodvo,” Dlamini explained. “This has had ripple effects on other businesses relying on the operation. Local transport operators have been equally affected, with nearly 200 Eswatini-owned trucks now standing idle and facing collapse. Transporters face asset repossessions.”

He cautioned that if current conditions persist, retrenchments across the coal value chain could deepen.

“We cannot hide the fact that falling export coal demand has put us in a very difficult position,” he said. “If the trend continues unchecked, more jobs will be lost in the coal value chain. But we are working hard to ensure that does not happen.

‘‘With recent Maloma retrenchments, there is fear of the same happening to our business,” said Dlamini.

The fears are not unfounded. Maloma Colliery Limited, Eswatini’s largest anthracite producer, has already hinted on retrenching workers. Its CEO, Jabulile Shabangu, recently indicated that high electricity tariffs in South Africa had forced 14 smelters — Maloma’s key clients — to shut down operations, cutting off demand for coal. Electricity is a major input cost for Maloma customers. “The recent price hikes have eroded profit margins and threatened the viability of these energy-intensive operations. The high electricity costs are severely impacting South Africa’s smelters, making them uncompetitive and leading to production cuts, smelter closures and increased export of raw materials,” she said.

Full article available in our publication.

Grindrod Logistics Eswatini has warned that without urgent interventions, hundreds of jobs and businesses tied to the coal supply chain could be lost. (Pics: Courtesy)

Director of Grindrod Logistics Eswatini Mkhululi Dlamini.