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Climate hypocrisy will land Africa with ‘stranded fossil assets’

A giant shiploader at work on a stockpile at Richards Bay Coal Terminal. Berlin is courting African nations to alleviate its dependency on Russian coal and natural gas as European nations face sanctions that affect these supplies owing to the war in Ukraine, says the writer. Picture: African News Agency (ANA)

A giant shiploader at work on a stockpile at Richards Bay Coal Terminal. Berlin is courting African nations to alleviate its dependency on Russian coal and natural gas as European nations face sanctions that affect these supplies owing to the war in Ukraine, says the writer. Picture: African News Agency (ANA)

Published May 29, 2022


By Patrick Bond

Boris Yeltsin in the early 1990s by her predecessor Helmut Kohl and US leaders George HW Bush and Bill Clinton: that the North Atlantic Treaty Organisation would not expand east of Germany.

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Due to Berlin’s increasingly urgent need for replacement gas sources, industrial Germany’s fossil addiction will result in massive infrastructure capital costs to accommodate new demand.

This will, in turn, benefit mainly Western oil companies operating in West Africa, especially France’s Total and UK-Dutch firm Shell. But it will leave the continent with “stranded assets” that could later in the 2020s result in “Carbon Border Adjustment Mechanism” climate sanctions (as South Africa, especially, faces from Europe).

There is no major German oil firm, but to illustrate pressures imposed on Africa to expand self-destructive fossil infrastructure, Frankfurt-based HMS Bergbau last year bought a majority stake in Botswana coal company Maatla.

Its CEO Jacques Badenhorst then lobbied Transnet CEO Portia Derby to complete a major coal railline extension to the Botswana border. Originally, the cost of rehabilitating the tracks was a whopping R800billion, when it was the first Strategic Integrated Project priority of the Presidential Infrastructure Coordinating Commission (PICC) in the 2012 National Development Plan.

Transnet tried purchasing 1 040 locomotives to pull the 3km-long coal trains. But the Gupta brothers’ corruption of the parastatal included ill-advised vendor China South Rail (chosen by Derby’s predecessors Siyabonga Gama and Brian Molefe).

Reversing the unjustified mark-up – costing tens of billions of rands – is now, Derby says, “the most critical underestimation” she made in arresting her firm’s decline. The PICC #1 project appeared derailed, not because climate-change considerations prevailed, but instead due to Transnet’s operational troubles and cable theft.

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Rather than 80million tons of coal exported from Richards Bay annually, as projected, the level is below 60 million. HMS Bergbau’s interest remains for Botswana to export its coal – an estimated 220 billion tons (five times South Africa’s reserves and a so-called “carbon bomb” in the making) – including, now, to Germany.

Only a few thousand tons make their way weekly from Botswana to the Maputo port over a creaky 1 400km route via Zimbabwe, instead of the more logical 850km to Richards Bay. This is where Scholz remains a pernicious ally, for as he explained during the press briefing to Ramaphosa (himself formerly a coal tycoon), the West’s anti-Russian sanctions – strenuously opposed by Pretoria – will prevent Europe’s import of Putin’s coal starting in September: “This will work because there are a lot of suppliers all over the globe that are willing and ready to sell their coal to those countries that have got them so far from Russia and obviously there are some as South Africa for instance where we will do so.” (Scholz and Ramaphosa smiled gratefully to each other.) For the sake of future generations’ very survival and continental solidarity, Ramaphosa should be closing South Africa’s coal mines and offering workers and communities “Just Transition” compensation.

After all, Germany is supposedly financing such a strategy via an $8.5 billion (about R133bn) (concessional, below-market) loan to decarbonise Eskom. But, as cynics point out, Eskom CEO André de Ruyter plans to use 44% of such funding for new infrastructure based on importing so-called Mozambican “Blood Methane,” even though that would release CH4 emissions (via leakage) that over the next 20 years will be 85 times more potent a greenhouse gas than CO2 from burning coal.

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Scholz’s closest European colleague, French President Emmanuel Macron, visited Ramaphosa a year ago to persuade him that Total’s methane-gas processing plant in Cabo Delgado required thousands of South African (and Rwandan) troops for protection against further Islamic guerrilla attacks.

Then the world’s fourth-largest methane-gas field might soon supply the Eskom grid. But the Climate Justice Charter Movement calls for a European reversal of the Eskom deal, and NGOs groundWork and the South Durban Community Environmental Alliance are fighting De Ruyter’s proposed 3 000MW Richards Bay methane-gas power plant, in the courts.

Cynics also remind that on April 14, Ramaphosa visited Durban after flooding killed more than 430 people.

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He sounded genuinely ready to U-turn South Africa’s own fossil addiction: “This disaster is part of climate change. It is telling us that climate change is serious, it is here. We no longer can postpone what we need to do, and the measures we need to take to deal with climate change.”

In effect, though, Scholz is fighting that logic. To win Ramaphosa over, he invited him to next month’s G7 annual summit, at a former Nazi-linked castle in Germany’s Bavarian Alps.

There, Scholz and UK Prime Minister Boris Johnson will continue refusing World Trade Organization requests by Ramaphosa and Indian Prime Minister Narendra Modi for a waiver of Intellectual Property on Covid-19 vaccines and treatment.

The G7 will continue stalling on vitally-necessary emissions cuts. The West’s role in the war against Ukraine will intensify, leading to yet higher fossil fuel prices, gifting Big Oil even higher profits.

The contradictions are building up – with potential nuclear and climate holocausts looming – and Ramaphosa and Scholz appear as frightened bucks staring into the headlights.

* Bond is Professor at the University of Johannesburg Department of Sociology.