Steve Tshwete Local Municipality in Middelburg used to be one of South Africa’s top municipalities, boasting an average 95% rates collection. Now it is bleeding revenue as Mpumalanga’s coal sector contracts, and is struggling to pay its own service providers within the mandated 30 days. Municipal chief financial officer Puselletso Milato said that as retrenchments accelerated and coal-related activity slowed, the effects were showing up in falling rates payments and growing arrears.
In November 2025 residents owed the municipality more than R604 million — a fall of more than R200m in just one year. Applications for indigent support had also increased, with 889 applicants qualifying between September 2024 and December 2025, Milato said. Once sustained by mining-linked jobs, electricity sales and industry rates, the municipality is struggling to collect payments as retrenchments ripple through households and businesses.
The growing financial strain on one of Mpumalanga’s most coal-dependent economic hubs offers an early warning of how coal-dependent towns across the province might be affected by South Africa’s energy transition. Five coal-fired power plants and 15 coal mines are expected to close by 2030 and another four plants and 23 mines by 2040. This will impact the livelihoods of 2.5 million people, most of them in Mpumalanga, according to the 2024 research by the Southern African Institute of Mining and Metallurgy.
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The job losses unfolding across the coal belt are occurring alongside major commitments by the government and international partners to support South Africa’s Just Energy Transition (JET). However, workers, civic groups and municipal officials told #PowerTracker that support had yet to materialise at local level. The JET Investment Plan has allocated nearly R2.7 billion for reskilling programmes nationwide, including R750m earmarked for youth-focused initiatives in Mpumalanga and R5.6bn for supporting coal workers.
The plan also includes R1.6bn for pilot skills-development centres in Mpumalanga, the Eastern Cape and the Northern Cape. Despite the commitments, retrenched workers and affected communities say they have seen little direct benefit. Johannes Silas, the director for development and strategic support at the municipality, warned that the cumulative impact of the downturn could hollow out the local economy.
He said there was growing concern that without effective intervention, Middelburg risked becoming a “ghost town”. The municipality was attempting to diversify the local economy by integrating existing coal-linked activities with new industries, he added, but was struggling to ensure service delivery amid municipal revenue decline. “We fund most of our infrastructure projects in-house through payments from residents but if there is no money coming in, it becomes difficult to implement those projects,” Silas said.
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