The Republic of South Africa has a surface area of 1 127 200 km² with a total population of 43 million. The economy consists of a developed First World and a developing Third World component and interacts with the economies of other developing countries on its borders or close by.

The Republic at present provides employment to 1,5 to 2 million migrant workers from neighbouring countries, especially in the mining sector. It exports agricultural produce, consumer goods and engineering products to its neighbours and provides goods transport by means of its harbours and railways to many of these countries. The Republic has an extensive infrastructure and well developed transport, base-minerals and secondary industries. Mining, especially gold mining with mines of up to 3 000m deep, is the most important economic activity.

The country has a large and dynamic energy economy, with high energy intensity, defined as the consumption of energy per unit of national economic output. In common with many developing countries, a large informal sector exists of which the activities cannot be expressed in national accounting data. This factor should be taken into account when comparisons of South African energy use are made with those developing countries.

Industrial development and the commissioning of two large coal-based liquid fuels plants in the early eighties led to a rapid increase in primary energy intensity. Primary energy and electricity consumption increased by an average of 3,7% and 3,9% respectively per annum during the previous decade. In common with world trends the country has experienced a prolonged economic recession during the past several years.

Coal is the cornerstone of the energy economy. The eighteen principal coal fields of South Africa are located in eastern Mpumalanga and northern Kwa-Zulu Natal. These reserves are the fifth largest in the world after China, the USA, the former USSR and India. Local production is used for electricity generation, conversion to liquid fuels and for export. Coal is also used in the metallurgical industry and for the production of coal gas and the generation of steam. After gold, coal has become the country’s second most important earner of foreign exchange.

Feedstocks for South Africa’s liquid fuel requirements are imported crude oil and indigenous coal and natural gas. A significant proportion of the liquid fuel requirements is derived from the Sasol oil-from-coal and the Mossgas oil-from-gas processes. Other indigenous energy reserves are off-shore natural gas and condensate and several small off-shore oil fields discovered by the government-financed Southern Oil Exploration Company, SOEKOR.

The sizeable natural gas finds off the South African coast form the basis of the Mossgas project where gas and condensate are converted into synthetic liquid fuels via the Fischer Tropsch/Sasol Synthol process.

The MBendi AfroPaedia contains extensive information on the South African oil industry.

image The electricity system has grown rapidly during the last few decades. Eskom is the national electrical power utility and owns 20 power stations with a net maximum capacity of 36 563 MW at end 1996. The national power line network measures over 255 000 km. Most of these stations are linked to collieries. South Africa produces more than 50% of the total electricity generated on the African continent. Due to large and relatively easily mineable coal reserves, the cost of South Africa’s electricity is of the lowest in the world.

South Africa has a high solar radiation intensity of 5500 watt hours per square metre per day and a large number of sunny days per year, especially inland in winter where most of the economic activity takes place. The potential for developing solar energy is therefore high. However, the relatively low price of electricity makes it difficult to justify the large-scale use of solar energy at present.

The potential for utilising wind energy varies from region to region with the coastal areas showing the greatest potential. Wind energy is generally used in rural areas for lifting ground-water.

The developing rural population is generally dependent on firewood for energy needs, but shortages, hardship and ecological damage are experienced in certain areas. Rural electrification is vigorously pursued in many areas, but because of the low power density, the costs are high and cannot be afforded by a large component of the population. Some renewable energy technologies are expected to contribute towards reducing this problem.

The electrification of recently urbanised areas proceeds at an accelerated pace. Over the past few years, electricity sales to these customers has been the fastest growing segment of the energy market in South Africa.

The greatest energy challenge facing South Africa is to ensure that adequate and affordable energy is available at all times to all its people.

Shaun Bakamoso

Greetings. I'm Shaun Bakamoso, and I'm thrilled to be your guide through the dynamic world of business news in South Africa here at With a passion for staying informed and a keen interest in the ever-evolving landscape of business, I've dedicated myself to providing you with timely, insightful, and comprehensive coverage of the latest developments impacting the South African economy. / Instagram