KEY POINTS
- Sasol plans to cut external coal purchases to 5–7Mt in 2027.
- Own coal production is targeted at 34Mt by 2028.
- Higher mining investment will support coal supply and future MRG production.
Sasol is stepping up investment in its coal mining operations as it moves to reduce reliance on externally purchased coal and secure enough feedstock to support higher production at its Secunda Operations in Mpumalanga, South Africa.
The chemicals and energy group plans to increase coal production from its own mines while steadily cutting the volume of coal it buys from outside suppliers. The strategy is aimed at improving the quality, reliability and cost competitiveness of its feedstock as the company prepares for higher production targets and future changes in its gas supply arrangements.
Sasol’s Secunda Operations produced 7.2-million tons of coal in the financial year ended June 30, the highest production level recorded at the operation in five years.
The stronger output was supported by improved gasifier availability, the absence of a major shutdown during the year and better coal quality following the completion of a major destoning project.
Sasol expects production to remain between 7.2-million and 7.4-million tons in the 2027 financial year, despite a scheduled shutdown. The company believes improvements in coal quality and equipment availability will help maintain production at elevated levels.
The improved performance also contributed to stronger group financial results. Sasol reported a 17% increase in earnings before interest, taxes, depreciation and amortisation to R61-billion, while headline earnings per share increased by 9% to R38.31.
R1-billion destoning project improves coal quality
A key part of Sasol’s strategy has been the conversion of its Twistdraai export-coal washing plant into a coal-destoning facility.
The project, which cost about R1-billion, is designed to remove impurities and improve the quality of coal supplied to Sasol’s operations.
Chief executive officer Simon Baloyi said the facility had delivered a significant improvement, with coal sinks — unwanted heavy material and impurities in the coal — reduced to below 12%.
Sasol intends to maintain these improvements while increasing production from its own mines and reducing the amount of coal sourced externally.
Baloyi said the company was focused on ensuring sustainable coal quality while improving the competitiveness of its feedstock costs.
Sasol bought 8.8-million tons of coal from external suppliers during the 2026 financial year.
That figure is expected to fall substantially in 2027, with the company forecasting external purchases of between 5-million and 7-million tons.
At the same time, Sasol plans to increase production from its own mines. Its mining division produced 28.4-million tons in 2026 and expects to raise this to between 30-million and 32-million tons in 2027.
The longer-term objective is to produce 34-million tons from its own collieries by 2028.
