How the US-Israel-Iran conflict is reshaping South Africa’s coal exports

The US-Israel war on Iran, which has sent shockwaves through global energy markets, is creating new opportunities for South Africa’s coal exporters as countries grapple with volatile oil prices, shipping disruptions and energy security concerns. 

But while coal producers stand to benefit from stronger prices and export demand, researchers warn that increased coal production and exports carry significant environmental and social costs, from greenhouse gas emissions to the impacts borne by communities living near mines and coal-fired power stations.

The benefits of coal expansion are not evenly distributed. Communities living near coal mines and coal-fired power stations continue to bear many of the environmental and health costs associated with extraction and combustion.

Political economist and University of Johannesburg academic professor Patrick Bond argues that the damage extends far beyond local pollution.

“Combustion of coal is the main cause of the climate crisis,” he says, “and mines cause deadly local pollution and destruction of land, air and water.” 

He adds that the climate costs of coal exports are staggering and rarely accounted for economically. 

“At a social cost of carbon of $1 200 (about R19 554) per tonne, a typical large shipload causes climate damage of $530 million (about R8.7 billion).”

The climate, environmental and social impacts of coal mining and burning are “severe”, gender and climate change researcher Dr Thembi Luckett, says. This is particularly for communities that live close to coal mines and power stations. 

“These communities are black, working-class communities living under the shadow of power stations and whose suffering is rendered permissible in the name of ‘economic growth’.”

The war triggered sharp increases in fuel and shipping costs globally. Crude oil prices briefly climbed to $126 per barrel in April before easing below $100 after ceasefire discussions emerged and later settling at above $100. Diesel prices surged by 70% while shipping costs rose by 40%.

For many climate analysts, the crisis appeared to strengthen the case for renewable energy. United Nations climate chief Simon Stiell argues that the war has “supercharged” global shifts toward renewable energy as countries searched for alternatives to the volatility of fossil fuel markets.

However, while some analysts expected higher oil prices to accelerate the shift to renewable energy, coal markets have also benefited from the uncertainty, with stronger demand and higher prices in several regions.

For South Africa, a country with abundant solar and wind potential and an officially stated commitment to a just energy transition, this presents a complex picture. South Africa appears to be among the countries experiencing renewed demand for coal exports.

Bond says the country is seeing a significant increase in coal exports linked to the broader geopolitical crisis. 

“Much, much more,” Bond said when asked whether South Africa was selling more coal internationally since the escalation of the war.

Asian thermal coal prices rose between 11% and 12.6% after the conflict intensified. High-grade Australian coal rose to around $130.81 per tonne, with analysts warning prices could rise further if liquefied natural gas becomes too expensive relative to coal.

South African coal producers have positioned themselves to benefit. Mining titan Exxaro Resources announced in March that its coal exports could rise by as much as 12% in 2026, potentially reaching 8 million metric tonnes, compared to 7.1 million tonnes the previous year.

The company linked the forecast to energy market disruptions associated with the conflict and rising coal prices. Although export coal prices averaged around $90 per tonne in Exxaro’s annual reporting period, geopolitical instability has since contributed to renewed upward pressure.

Bond notes that the increase is not only reflected in prices but also in export volumes.

“Yes, the price is increasing,” he said, “but so is the annual volume of coal exports — mainly to India — up from a low of 47 million tonnes in 2021, when Transnet had many broken rail components, to close to 60 million tonnes anticipated this year.”

The economic incentives are significant. Higher coal prices translate into increased export revenues, stronger returns for investors and greater incentives for continued coal production.

Exxaro declared total shareholder payouts of R6.3 billion in 2026 despite declining profits, while continuing to invest in both coal and renewable energy. “The rate of coal sales increased especially after Colombia halted them [coal sales to Israel] in August 2025,” Bond says.

After Colombia’s decision to ban coal exports to Israel over the war in Gaza, South Africa became a significantly larger supplier of coal to Israel.

Reuters reported that South African coal exports to Israel increased by 87% to 474 000 metric tonnes in the three months to November 2025. They reached 667 442 tonnes over a three-month period, the highest level recorded since 2017. 

According to Kpler data cited by Reuters, South Africa’s share of Israel’s seaborne coal market is expected to rise to 55%, more than triple its previous share. The trend highlights a tension at the centre of South Africa’s energy policy.

South Africa publicly positions itself as committed to a just energy transition, with billions in international climate finance secured to support a move away from coal. Yet rising global demand and stronger prices continue to create incentives for coal extraction and export.

There is also South Africa’s case before the International Court of Justice in The Hague, where it has accused Israel of genocide against Palestinians in Gaza. The country’s coal exports to Israel have drawn criticism from some civil society organisations. 

In an advisory report to the government, Boycott, Divestment and Sanctions South Africa argues that continued coal exports are inconsistent with the country’s constitutional commitments and international legal obligations. It has called on the government to halt such exports.

The structure of South Africa’s coal export economy also reveals the concentration of corporate power in the fossil fuel sector. Bond points to the ownership structure of the Richards Bay Coal Terminal as indicative of the dominant players benefiting from export growth. 

These include Anglo Operations, Black Royalty Minerals, Exxaro, Kangra, Koornfontein, Liberty, Mbokodo, Optimum Coal, Quattro, Sasol, Seriti, South Dunes, SA Coal Mine Holdings, South32 Coal, Tumelo Coal Mines and Umcebo Mining.

Shaazia Ebrahim works at the Climate Justice Coalition