Petrochemical company Sasol has reported higher coal exports in the year to end-June, partly due to better performance by Transnet Freight Rail (TFR).
The company, which has long been SA’s largest corporate taxpayer, said on Monday its coal export sales improved due to “slight” improvement by Transnet.
“Export sales volumes improved by 5% compared with the 2023 financial year, driven by increased production at our Thubelisha colliery and improved Transnet Freight Rail performance,” said the company.
Sasol Mining operates six coal mines that supply about 40-million tonnes of thermal coal feedstock a year to its operations in Secunda and Sasolburg, and to the export market.
The group exports about 3.3-million tonnes a year through its shareholding in Richards Bay Coal Terminal (RBCT).
Sasol is the latest company to report operational improvement from Transnet in recent weeks. The country’s largest iron-ore producer, Kumba, said last week it had begun to see improved performance from Transnet in the second quarter of the year.
Transnet and Eskom have come under fire for hobbling SA’s economic growth over the years.
Recovery path
This led to President Cyril Ramaphosa establishing the national logistics crisis committee in 2023 to address the challenges. Since then Transnet has been on a recovery path.
The coal industry, under the banner of RBCT, last year stepped in to provide financial assistance to Transnet to procure locomotive spare parts. The lack of parts affected the performance of the rail, ports and pipelines operator over the past few years, costing the economy billions of rand and thousands of jobs.
Since 2019, Transnet has been struggling to get a service provider that can assist in supplying spare parts for some of the trains it bought in a controversial deal for 1,064 locomotives.
Transnet has about 200 locomotives that remain idle and cannot be returned to the railway lines as the Chinese Railway Rolling Stock Corporation (CRRC) refuses to provide it with spare parts.
Under the agreement, RBCT is assisting with the procurement of locomotive spares, namely batteries and compressors. Transnet will foot the bill through a reimbursement mechanism agreed upon by Transnet and RBCT.
While the recent World Bank report ranked SA’s ports as some of the world’s worst performers, Transnet was beginning to turn things around, said Business Unity SA.
The business grouping said that since the study was conducted Transnet had removed 30,000 containers from the backlog in Durban and vessel anchoring times had been reduced from 18 days in October to four in January.
Sasol’s energy business achieved operational improvements in mining, gas and Secunda Operations in the fourth quarter, but despite this and a strong rand oil price, the group continues to see the effects of lower diesel differentials and inflationary pressure on its liquid fuels segment.
Mining productivity, at 983 tonnes per continuous miner per shift, was higher compared with the previous year and improved in the fourth quarter, aligning with market guidance, the petrochemicals company said in its production and sales metrics report on Monday.
Mining saleable production for the full year did, however, ease 2% to 30.2-million tonnes compared with the previous year mainly due to a reduction in mining sections and increased discards from Sasol’s export beneficiation plant.
The group continues to focus on complex-wide initiatives across all collieries to improve mining’s overall performance. In Mozambique, the group achieved its first gas flow from the production-sharing agreement in May, resulting in full-year 2024 production exceeding the upper end of its market guidance.
In Mozambique, gas production was 6% higher year-on-year and exceeded market guidance of 113-billion standard cubic feet to 119-billion standard cubic feet.
Natural gas and methane-rich gas sales volumes in SA were 4% and 7% higher year-on-year, respectively, due to higher production and external customer demand. Production volumes at Secunda Operations increased 1% year-on-year to 7.0-million tonnes, within market guidance of 6.9-7.1-million tonnes, mainly due to a phase shutdown in 2024 relative to a total shutdown in 2023.
Chemical sales
The fourth-quarter performance increased 9%, benefiting from improved equipment availability and operational stability.
Chemicals total sales volumes were higher compared to 2023, with all segments achieving sales volumes within market guidance. Despite a slight improvement in Transnet rail performance, Sasol is still experiencing constraints on its supply chain, affecting the Chemicals Africa segment.
“We continue to proactively manage production rates and inventory levels at several of our international facilities in response to lower demand, while strict cost and capital management measures continue,” it said.
Sasol said that it would release its outlook for 2025 when it released annual results on August 20.
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