{"id":823360,"date":"2025-05-08T07:00:00","date_gmt":"2025-05-08T05:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=823360"},"modified":"2025-05-07T17:03:55","modified_gmt":"2025-05-07T15:03:55","slug":"70000-jobs-on-the-line-as-south-africa-heads-towards-another-disaster","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/energy\/823360\/70000-jobs-on-the-line-as-south-africa-heads-towards-another-disaster\/","title":{"rendered":"70,000 jobs on the line as South Africa heads towards another disaster"},"content":{"rendered":"\n

South Africa\u2019s looming gas crisis threatens around 70,000 jobs and an estimated 5% of the country\u2019s GDP. <\/p>\n\n\n\n

However, in response to this potentially catastrophic situation, the African Energy Leadership Centre at Wits Business School, in collaboration with IGUA-SA, is convening a symposium on Wednesday (7 May). <\/p>\n\n\n\n

This symposium aims to assess the current situation and explore possible solutions for the long-term security of natural gas supply in South Africa.<\/p>\n\n\n\n

The core of the problem lies in dwindling gas supplies from neighbouring Mozambique that are vital to South Africa\u2019s supply.<\/p>\n\n\n\n

Currently, Sasol operates gas fields in Mozambique and supplies natural gas to South African industries via pipeline.<\/p>\n\n\n\n

However, production from these fields is expected to decline sharply by as early as 2026, leaving a critical gap in the nation\u2019s energy supply chain.<\/p>\n\n\n\n

This is particularly alarming for South Africa\u2019s industrial sector, where natural gas is essential for operations that contribute substantially to economic output and employment.<\/p>\n\n\n\n

Professor David Phaho, Director of the African Energy Leadership Centre at Wits Business School, has warned of the dire consequences of the looming “gas cliff.” <\/p>\n\n\n\n

The gas cliff refers to the depletion of gas from Mozambique\u2019s Pande and Temane fields, which currently supply the bulk of South Africa\u2019s natural gas via an 850km pipeline.<\/p>\n\n\n\n

Speaking ahead of the high-level symposium, Phaho warned<\/a> that if South Africa doesn\u2019t find an alternative for natural gas in its energy mix, there will be serious consequences for the economy.<\/p>\n\n\n\n

One of the most pressing concerns, according to Phaho, is the potential loss of over 70,000 direct and indirect jobs. <\/p>\n\n\n\n

The industries that employ these workers also contribute between R300 billion and R500 billion annually to the South African economy, undermining up to 5% of the nation\u2019s GDP.<\/p>\n\n\n\n

This estimate comes from IGUA-SA and underscores how important natural gas is to the country\u2019s industrial economy.<\/p>\n\n\n\n

Phaho pointed out that the manufacturing sector will be most impacted, noting that both large industries and small to medium enterprises rely on natural gas.<\/p>\n\n\n\n

He added that these enterprises rely on gas as an energy source and feedstock, or fuel to operate critical machinery. <\/p>\n\n\n\n

He said that sectors such as steel, petrochemicals, and long-haul transportation industries, which are difficult to decarbonise, are also vulnerable.<\/p>\n\n\n\n

What needs to happen to avoid the cliff <\/h2>\n\n\n
\n
\"\"<\/a>
Professor David Phaho, Director of the African Energy Leadership Centre at Wits Business School<\/em><\/figcaption><\/figure><\/div>\n\n\n

Considering the serious consequences, Phaho outlined realistic alternatives South Africa could pursue to mitigate this looming crisis. <\/p>\n\n\n\n

In the short term, importing liquefied natural gas (LNG) is the most viable option.\u00a0<\/p>\n\n\n\n

Potential entry points include the Richards Bay, Durban, and Maputo ports in Mozambique, where gas could be fed into the existing pipeline infrastructure. <\/p>\n\n\n\n

\u201cIn the longer term, we must look at regional exploration opportunities,\u201d he said, referencing significant hydrocarbon finds in Namibia\u2019s Orange Basin, which South Africa shares.<\/p>\n\n\n\n

Although these projects are years away from maturity, they represent a critical part of the long-term energy security strategy.<\/p>\n\n\n\n

Despite the urgency, Phaho remains optimistic that this crisis could also be an opportunity for regional collaboration and policy reform. <\/p>\n\n\n\n

\u201cThere\u2019s an opportunity for us to collaborate with our neighbouring countries to ensure natural gas security in the southern part of the continent,\u201d he said. <\/p>\n\n\n\n

He added that Mozambique still holds the third-largest gas reserves in Africa, and increased engagement there could be mutually beneficial. <\/p>\n\n\n\n

At the same time, the government has taken steps toward preparedness, developing a Natural Gas Master Plan and engaging various stakeholders to ensure a stable and enabling policy environment.<\/p>\n\n\n\n

The upcoming symposium will bring together players from government, academia, and the private sector\u2014including entities like Transnet Pipelines, Sasol, the IDC, and Eskom\u2014to craft a \u201cgas pact\u201d for the next 25 years. <\/p>\n\n\n\n

\u201cIt\u2019s one thing to admire the problem, but we thought: let\u2019s bring in all the relevant stakeholders to formulate solutions,\u201d said Phaho.<\/p>\n\n\n\n

At the beginning of the year, Sasol said it would extend its operations to buy more time to around mid-2027.<\/p>\n\n\n\n

The company added that it also made a pact with the government and Eskom to work together to avoid the looming \u2018gas cliff\u2019 in South Africa.<\/p>\n\n\n\n

However, business leaders remain concerned. Avoiding the \u2018gas cliff\u2019 requires facilitating, expediting and aggregating the demand for imported liquified natural gas. <\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa faces a gas crisis that could risk 70,000 jobs and 5% of GDP, prompting urgent action from business, government, and industry stakeholders.<\/p>\n","protected":false},"author":92,"featured_media":823363,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9874],"tags":[22465,21413,853,22466,3439],"class_list":["post-823360","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-igua-sa","tag-natural-gas","tag-south-africa","tag-the-african-energy-leadership-centre","tag-wits-business-school"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/823360","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=823360"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/823360\/revisions"}],"predecessor-version":[{"id":823445,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/823360\/revisions\/823445"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/823363"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=823360"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=823360"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=823360"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}