Sasol sets aside R8bn for coal replacement projects

Mon, Mar07, 2011, ByTerence Creamer

JOHANNESBURG (miningweekly.com)- Energy and chemicals producer Sasol confirmed on Monday that it had set aside R8-billion for its coal-mine replacement programmes, which had been designed to ensure continued supply to its coal-to-liquids facility at Secunda, as well as to sustain exports.

The group, which is the world’s largest producer of motor fuels and chemicals from coal, had allocated more than R3-billion for the new export coal mine to replace the depleting Twisdraai operation.

The Thubelisha export coal mine, already under construction, would also supply the JSE-listed group’s synfuels factory in Secunda, in Mpumalanga.

The coal-mining unit, reported operating profit of R705-million for the six months to December 31, 2010, a 315% positive turnaround on the corresponding period a year earlier.

However, once a R565-million share-based expense relating to the Ixia Coal black economic–empowerment transaction was included, its operating profit contribution fell to R140-million, which was 18% down on the prior period-on-period.

Production and sales volumes also decreased in line with a planned Sasol synfuels outage.

The larger group reported 21% rise in earnings attributable to shareholders of R7,6-billion for the interim period, with operating profit rising to R12-billion, on the back of higher average crude oil and chemicals prices.

Sasol had stated previously that it planned to retain its export coal business, but that it would require a new mine in order to maintain volumes. Both Twistdraai and Brandspruit would soon be mined out, while Thubelisha and Impumulelo were scheduled to replace them.

The first-phase expansion programme at Secunda, involving R7,8-billion, would be fed by natural gas from Mozambique, but further growth phases might seek to use additional coal, including coal fines.

Sasol said that it would spend R23-billion on capital projects this financial year and revealed that it would spend R31-billion during the 2012 financial period. Edited by Creamer Media Reporter

Tags: The Thubelisha export coal mine, Ixia Coal, Mozambique,

Sasol Boosts Dividend 11% as Oil Gain, Cost Control Lift Profit

March 07, 2011, 4:41 AM EST

By Carli Lourens

March 7 (Bloomberg) -- Sasol Ltd., the world’s largest producer of motor fuels made from coal, boosted its first-half dividend 11 percent as oil price gains and cost control lifted profit.

The increase to 3.10 rand (45 U.S. cents) a share also takes into account “the improved market and economic conditions,” Johannesburg-based Sasol said in a statement today. Net profit jumped 21 percent to 7.6 billion rand in the six months through Dec. 31 from 6.3 billion rand a year earlier.

Sasol’s profit is closely tied to oil prices and to the South African currency exchange rate against the dollar. Oil gained 16 percent to $105.96 a barrel in New York so far this year while the rand weakened 3.8 percent to 6.88 on the dollar.

A proposed $8.8 billion coal-to-fuel project in China by Sasol and partner Shenhua Ningxia Coal Industry Group Ltd. was approved by the Chinese environmental ministry, according to a posting on the ministry’s website today. A feasibility study on a gas-to-fuel plant in Uzbekistan should be completed this month and an initial study into a coal-to-fuels plant in India is in its “final stages,” Sasol said today.

Costs will be contained within “inflationary levels” for the full year, the company said. Synthetic fuel output will be “marginally lower” in the full year after falling 7.5 percent in the first half as the South African coal-to-fuels plant underwent its biggest ever planned maintenance outage, it added.

The company uses proprietary Fischer-Tropsch technology to make gasoline, diesel and jet fuel from coal it mines in South Africa and from natural gas from below the ocean floor near Qatar. The company shifted the focus of future investment to gas last year, betting it will be a more profitable raw material than coal.

Tags : Shenhua Ningxia Coal Industry Group, Fischer - Tropsch technology

Sasol’s China coal-to-liquids plant on hold

No more work to be undertaken before application approved

Friday 04, 2011
By SISEKO NJOBENI

PETROCHEMICALS group Sasol said yesterday it would put on hold new work on a planned coal-to-liquids project in China while it awaited the outcome of the Chinese government’s review of the project application.

Sasol and its partner in the project, Shenua Ningxia Coal Industry Group, submitted a project application last year to the National Development and Reform Commission, a macroeconomic management agency that falls under China’s State Council. The commission lists planning of the layout of key construction projects among its functions.

The application seeks approval from the Chinese government to build the coal-to-liquids plant at the Ningdong energy and chemical base in the northwest autonomous region of Ningxia Hui.

Sasol and Shenua Ningxia Coal Industry Group are 50-50 partners in the mooted 94000 barrels a day plant. The project will use Sasol’s proprietary technology. The companies have completed feasibility studies.

Sasol spokeswoman Jacqui O’Sullivan said yesterday the project would cost $8bn-$10bn. As 50% equity partner, Sasol is liable for half of the costs.

Ms O’Sullivan said Sasol and Shenua Ningxia Coal Industry Group were awaiting the decision of the National Development and Reform Commission.

"The project has reached a key decision point and the partners have decided to delay initiation of any further project activities until the outcome of the decision is known," Ms O’Sullivan said.

The Chinese project is one of several Sasol is pursuing outside SA. According to Sasol, the proposed project would be the largest single-project foreign direct investment in China and its largest coal-to-liquid fuels project yet.

In comments made in Beijing when he was part of President Jacob Zuma ’s delegation to China last year, Sasol CE Pat Davies said Sasol and Shenua Ningxia Coal Industry Group had put together "the best possible commercially proven overall integrated technology package".

Sasol’s decision to halt further work on the project follows last month’s announcement of its decision to can a proposed coal-to-liquids plant in Indonesia.

The project had still been at what was called the "ideas stage" of development.

The canning of the project in Indonesia was regarded as an indication that, for Sasol, new greenfields coal-to-liquid projects will play second fiddle to gas-to-liquids projects.

(sourced:Business Day, news worth knowing)
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