Do You Need a License to Trade Coal in South Africa?

Clear, authoritative guide on domestic coal trading in South Africa. Learn why no license is needed, when export permits apply, and how to ensure supply legitimacy.

About the Author: National Coal Supplier is a trusted source for 10,000+ monthly readers seeking industry insights on coal mining, gold, and chrome. Backed by industry analysts and technical writers, we provide accurate data on grades, specs, and sourcing of coal types, including peas, small nuts, and duff, serving buyers, exporters, and energy firms.

Key Takeaways

• You don’t need a permit to trade coal domestically if sourced from a legal mine.

• Saving or presenting a certificate of origin protects you from legal or reputational harm.

• Eskom requires beneficiation; simple resellers may not qualify for supply contracts.

• Exporting coal needs a registered business and an export license, not a DMRE permit.

• Strong documentation and BEE compliance ensure you stay eligible for industrial tenders.

Selling coal in South Africa is more than just sourcing and supplying. It requires a clear understanding of the legal framework, especially if you're aiming to operate within industrial supply chains or government contracts. This aritcle outlines what you need to know about coal trading license requirements in South Africa and clarifies common misconceptions.

1) Do You Need a License to Trade Coal in South Africa?

You do not need a license or permit to sell coal in South Africa. Trading coal, that is, buying and reselling it,  is not regulated under the Mineral and Petroleum Resources Development Act (MPRDA).

However, if you're involved in mining coal, you will need the proper permits and rights from the Department of Mineral Resources and Energy (DMRE).

There is a growing number of traders entering the coal market to meet the rising demand from industrial sectors, municipalities, and exporters. Knowing that no license is required makes market entry more accessible. However, legal sourcing and transparent operations remain critical. Learn more on how and where to buy coal in South Africa.

2) What Qualifies as "Trading" vs. "Mining"

Mining involves the physical extraction of coal from the ground and always requires a mining right or permit. Trading refers to purchasing coal from legal sources and reselling it to industrial users or distributors. No license is needed to trade coal as long as it is sourced from a legitimate, permitted mine.

Understanding this distinction helps you avoid unnecessary permit applications. Many new entrants to the market confuse trading with mining, leading to delays and misinformation. If you're simply sourcing, storing, and distributing coal from verified suppliers, you are operating within legal bounds.

3) Do Mining Permits or Rights Apply to Traders?

No. These permits only apply to the actual extraction of coal. If you are not involved in mining, you do not need a mining right or permit. However, traders must retain proof that the coal was legally obtained. A certificate or declaration from the original mine validating the coal's source is recommended to prevent legal or reputational risks.

Buyers, especially industrial and government clients, often request documentation to confirm that coal was sourced responsibly. This is especially relevant for bulk buyers who must maintain compliance records under their own procurement policies.

4) Key Permits and Authorisations Under the MPRDA

The MPRDA governs mining activity, not coal trading. This section is relevant only if you plan to mine your own coal.

Mining Permits: When They're Needed

Mining permits are required for small-scale coal extraction on land areas under 1.5 hectares. These are valid for two years and renewable. They are irrelevant for pure trading operations. However, if you're planning to vertically integrate and open your own pit, you'll need to go through this process.

The process includes:

• Submitting an application through the SAMRAD portal

• Providing an environmental management plan

• Notifying affected landowners and communities

Even small-scale operations require environmental clearance, land access agreements, and site assessments.

Exploration vs. Production Rights

Exploration and production rights relate to mining, not trading. However, if you're sourcing coal, it is your responsibility to ensure that your supplier holds these rights.

You can confirm this by:

• Requesting a copy of their valid mining right or permit

• Checking the DMRE public records

• Visiting the SAMRAD database

This due diligence protects you from unintentionally engaging in transactions involving illegally mined coal.

5) What Eskom Requires from Coal Suppliers

If you're planning to supply coal to Eskom, more stringent conditions apply. Learn more about Eskom specs coal requirements.

Value-Adding Suppliers vs. Mere Traders

Eskom generally works with value-adding suppliers who perform beneficiation steps such as crushing, screening, or blending. Simple resellers without added processes may not qualify unless they partner with a processing facility.

Value-adding activities improve fuel quality and consistency, which Eskom requires to meet performance and emissions standards. Even if you're not doing beneficiation yourself, working with a partner who handles it could open doors for Eskom tenders.

If your coal is not beneficiated, Eskom is likely to reject your bid or disqualify you from supply tenders. This policy helps Eskom manage efficiency, storage, and environmental obligations.

6) Export Considerations (If Applicable)

Exporting coal introduces different compliance requirements. Learn more on how to export coal from South Africa.

DMRE Permits Needed for Export

To export coal from South Africa, you must operate through a registered business and obtain an export license from SARS (South African Revenue Service). While you don't need a DMRE permit to trade domestically, exports must comply with international trade protocols.

Exporters also need to:

• Register with the International Trade Administration Commission (ITAC)

• Comply with SARS customs requirements

• Provide documentation of coal origin and value

These steps ensure traceability and compliance with global trade norms. Coal destined for international markets must also meet buyer-specific quality and testing standards.

If you're exporting to countries with stricter regulations, such as the EU or China, be prepared to submit detailed quality analysis reports, chain-of-custody records, and beneficiation logs.

7) How to Apply for Required Permits (For Mining or Export Only)

If you're entering mining or exporting coal, here’s how the application process works.

Online Application via SAMRAD Portal

Mining permits are applied for via the SAMRAD online application system, run by the DMRE. The portal guides you through eligibility checks, document uploads, and environmental compliance.

You must:

• Register an account

• Complete permit forms

• Upload an environmental management plan

• Submit proof of landowner consultation

The system also provides status updates and alerts throughout the permit application cycle.

Required Documentation

Applications must include:

• Environmental Management Plan (EMP)

• Landowner and community consultation records

• Company registration documents (especially for exporters)

• Proof of beneficiation (if supplying Eskom)

A well-prepared application can reduce approval delays. Working with a consultant who specializes in mining or export compliance can also streamline the process.

Costs, Processing Times & Duration

For mining activities, permits are valid for two years and can be renewed up to three times. Export license applications with SARS are generally processed within 10 business days.

Typical costs include:

• Environmental assessments: R20,000 to R100,000 depending on location

• Legal fees: R10,000 to R50,000

• Application fees: Around R1,000 for mining permits

Timeframes for mining permits vary by region and complexity. On average, expect:

• 3 to 6 months for standard applications

• Up to 12 months for high-impact or contested sites

8) Related Regulations & Compliance Obligations

Coal traders still have responsibilities to ensure their supply chain is legal and transparent.

Environmental Management (NEMA)

This applies only to those handling, processing, or stockpiling coal at significant volumes. Pure resellers are typically not subject to NEMA, but it's best to verify based on operational scope.

If you operate a coal yard, washing facility, or blending station, you'll need to comply with:

• Environmental impact assessment (EIA) requirements

• Regular audits and pollution prevention plans

• Licensing from provincial environmental authorities

Mine Health & Safety Act Compliance

Again, this applies only if you're involved in onsite beneficiation or physical handling of coal. Traders storing or transporting coal must still follow general health and safety best practices for workers and logistics staff.

Key responsibilities include:

• Safe loading and unloading procedures

• Dust and fire hazard mitigation

• PPE for workers handling coal in bulk

Impact on Public Procurement and Eskom Tender Eligibility

To qualify for public tenders or Eskom contracts, you must meet Broad-Based Black Economic Empowerment (BEE) criteria and demonstrate supply chain traceability, even if you are not a miner.

Documents typically required include:

• BEE compliance certificates

• Valid tax clearance from SARS

• Proof of local content where applicable

Government procurement favors companies that align with economic transformation goals and environmental responsibility.

9) Practical Steps for Industrial Buyers

Coal buyers must take precautions to avoid working with non-compliant suppliers.

Confirm Mining Rights or Beneficiation Capability

If you're buying in bulk or bidding on Eskom tenders, verify that your supplier has legitimate mining credentials or beneficiation capacity.

This protects your business from disruptions, reputational risks, and potential legal issues.

Due Diligence: Check Source Documentation

Ask for a certificate or declaration proving the coal's origin. This ensures you're not inadvertently buying stolen or illegally mined coal.

Confirm the documentation includes:

• Mine name and license number

• Date and tonnage

• Beneficiation processes completed

Prepare for Environmental & Social Compliance Checks

This mainly applies to large-scale suppliers or public sector tenders. Your environmental and social record can influence long-term contract eligibility.

Be ready to show:

• Community engagement initiatives

• Pollution prevention and control strategies

• Sustainable transport or logistics plans

Consider BEE, Tender Eligibility, and Logistics

BEE compliance, operational scale, and reliable delivery schedules still matter for supplier credibility, even in unlicensed trade.

Strong logistics support, from consistent trucking capacity to access to rail or ports, enhances your reputation as a reliable partner.

10) Final Thoughts

Understanding coal trading license requirements in South Africa helps avoid unnecessary red tape. You do not need a permit or license to trade coal domestically. You only need permits if you're mining coal or exporting it abroad.

What matters most is verifying that your supply is legal, traceable, and compliant. For traders, documentation and trust in your supply chain are more important than licensing paperwork.

11) Frequentky Asked Questions

What is a coal trading license in South Africa?

A coal trading license in South Africa is a legal permit issued by the Department of Mineral Resources and Energy (DMRE) that allows businesses or individuals to buy and sell coal commercially. It ensures compliance with national regulations and provides traceability across the supply chain. Without this license, coal traders risk penalties, legal action, or being shut down. The license is part of South Africa’s broader effort to regulate mineral trading and ensure responsible practices within the coal market.

Who needs a coal trading license in South Africa?

Any person or business engaged in the buying and selling of coal, including brokers, transporters, and wholesalers, is legally required to obtain a coal trading license. This includes companies dealing in bulk orders, export sales, or distribution across provinces. Even if coal is not mined directly by the trader, handling or reselling it without proper authorization is illegal. The regulation applies to local operations and exporters, ensuring all transactions are properly tracked and taxed by the state.

How long does it take to get a coal trading license?

The application process for a coal trading license in South Africa typically takes 60 to 90 business days, depending on the completeness of your application and responsiveness of the DMRE. Delays can happen if documents are missing or incorrect. To speed up approval, ensure that your tax clearance certificate, business registration, and proof of coal sourcing are valid and properly submitted. Working with a licensing consultant or legal advisor can also reduce administrative setbacks and improve turnaround time.

Can foreign companies apply for a coal trading license?

Yes, foreign companies can apply for a coal trading license in South Africa, but they must meet the same regulatory requirements as local businesses. This includes registering a legal entity within the country, securing a South African Revenue Service (SARS) tax number, and demonstrating a credible supply and distribution plan. Some permits may also require local partnerships or compliance with B-BBEE (Broad-Based Black Economic Empowerment) policies. Legal assistance is recommended for foreign entities navigating the licensing framework.

What documents are required for a coal trading license?

Applicants must provide a valid South African company registration certificate, SARS tax clearance certificate, company profile, ID copies of directors, proof of coal sourcing, and a business plan outlining trading operations. Additionally, the DMRE may request B-BBEE certificates and environmental compliance documents depending on the scale and location of your operations. Ensuring these documents are complete and up-to-date is critical to avoid delays. Inaccurate or missing paperwork is the most common reason for rejections or extended processing times.