Sasol’s Wartime Windfall Revives Debate Over Coal’s Future

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessSasol's Wartime Windfall Revives Debate Over Coal's FutureSasol Ltd., the world’s largest producer of fuel from coal, is reaping the benefits of a surge in fuel prices due to the Iran war, while helping shield its home market of South Africa from the resulting supply shock.Author of the article: You can save this article by registering for free here. Or sign-in if you have an account.3ohra{nxlgvm2f[tsipkoua(_media_dl_1.png SAPIA, Sasol(Bloomberg) — Sasol Ltd., the world’s largest producer of fuel from coal, is reaping the benefits of a surge in fuel prices due to the Iran war, while helping shield its home market of South Africa from the resulting supply shock.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountChief Executive Officer Simon Baloyi has increased his focus on coal-to-liquids fuel output, along with production from its crude refinery, at an opportune time.“Sasol continues to play a very key and meaningful role into what I will call the national security of the country,” Baloyi said in an interview in Bloomberg Johannesburg office on Tuesday. The company needs to preserve the Fischer-Tropsch process technology “to make sure that we can produce the required critical chemicals during a time like this,” he said.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe company expects to report earnings before interest, taxes, depreciation and amortization of as much as 62 billion rand ($3.8 billion) in the year ended June 30, Sasol said in a filing on Wednesday. That compares with 52 billion rand in the same period a year earlier.Sasol’s coal-to-liquids technology makes it one of South Africa’s largest greenhouse gas emitters, putting it at odds with environmental groups. Investors, however, are weighing the long-term sustainability of the business against its plan to cut emissions 30% by 2030. Under Baloyi, the company has doubled down on its synthetic-fuels operations while seeking to lower carbon intensity by maximizing production, reducing coal used for power generation and increasing its use of renewable energy.Sasol has built about 500 megawatts of renewable-energy capacity, secured more than twice that amount, and plans to procure 2,000 megawatts over time. The company is also pursuing carbon-offset projects, Baloyi said.At the same time, the company’s Secunda hub increased production to the highest in five years, according to a business update last month, helping South Africa plug a gap left by fuel imports from the Middle East that are stuck in the Strait of Hormuz, along with imported oil products from the US.South Africa’s refining sector shrank by about half in the years before the war due to under-investment and accidents that closed plants. That’s left Sasol with nearly two-thirds of operational fuel-making capacity in the country. A unit of Glencore Plc owns the only other working refinery. Sasol was left with buying all the crude to run the 108,000 barrel-a-day Natref refinery after then-partner Prax Group went into business administration last year.“We were fortunate because we can run all of it ourselves while refinery margins are extremely high,” Baloyi said, adding that full ownership of a refinery isn’t always beneficial. “In some instances it can be a bad thing.”This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Prax’s stake is being sold in a process that is expected to conclude by the end of the year, he said. With the war pushing oil prices beyond $100 a barrel, Sasol’s been realizing a healthy profit considering its $50 breakeven level. The conflict has also taken a toll, however. Operations at the Oryx gas-to-liquids plant in the Persian Gulf that it owns with QatarEnergy were first halted days after the start of the conflict.Production almost resumed at one point, Baloyi said. “We were busy with startup activities, then the war flared up, then we shut down,” he said. Sign up here for the daily Next Africa newsletter and subscribe to the Next Africa podcast on Apple, Spotify or anywhere you listen.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.