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Oct 26, 2007

Creating energy

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Sasol�s South African energy cluster is the dominant contributor to the bigger group and oversees operations in four areas namely Sasol Mining, Sasol Gas, Sasol Synfuels, and Sasol Oil.

In the record results for the year ended June 2007, when the group reported turnover of R98-billion and an operating profit of R25,6-billion, the cluster contributed a whopping R77-billion to overall turnover and R21-billion to operating profits.

The operating profit of Sasol Mining was at R1 171-million, about 5% lower than the prior year, owing primarily to the planned higher coal purchases from an external supplier, Anglo Coal's Isibonelo Colliery, lower production volumes as a result of the Synfuels shutdowns, and the effect of the strike in December 2006.

Sasol Mining supplies coal to Sasol's synthetic fuels and chemical plants. The company has two regional operations, one of which is the Sigma Colliery, near Sasolburg, which consists of the Sigma/Mohlolo underground, and the Wonderwater strip-mining operations.

The second operation is the Secunda Collieries, consisting of five underground operations at Secunda, and the Syferfontein underground and strip-mining operations near Trichardt.

Sasol reports that the mining activities extracts close to 50-million tons of coal a year, and more than 90% of it comes from Secunda's four underground mines and one surface mine. The underground operations together, comprise the world's largest single underground coal mining complex. Around 4-million tons a year of coal is used for export.

Sasol Gas experienced a 7% increase in sales volumes, higher sales prices and the profit of R346-million on the sale of 25% of Republic of Mozambique Pipeline Investment Company, resulted in Sasol Gas increasing its operating profit by 27%, to R1 936-million.

Sasol reports that it is making good progress in the expansion of its pipeline gas network. During the financial year, a second pipeline gas cogeneration plant, for the production of electricity and steam, was commissioned in Newcastle, KwaZulu-Natal.

Sasol Gas was established in 1964, based on the availability of synthetic gas produced at Sasolburg. Using Mozambican natural gas, and hydrogen-rich gas from the Sasol Chemicals Industry and methane-rich gas from the Sasol Synthetic Fuels at Secunda, the company built a substantial gas market in South Africa, and has developed an extensive 1 500-km pipeline network in South Africa, which delivers gas reliably to more than 540 customers, mainly in industry sectors in Gauteng, Mpumalanga, and KwaZulu-Natal.

Sasol Synfuels had another record year, achieving an increase in operating profit of 20%, to R16 251-million, owing to higher oil prices and a weaker rand. Production volumes were 2,8% lower than last year as a result of the shutdowns, production instabilities during the start up of the SCC, and some production interruptions.

Operating costs have increased as a result of the need to import high-octane fuel blending components to meet demand during shutdowns, as well as higher coal and natural gas costs.

The Synfuels operation operates the world's only coal-based synfuels manufacturing facility at Secunda. The company produces synthesis gas from low-grade coal, and uses unique Sasol high-temperature Fischer-Tropsch technology o convert this into a large range of petrochemicals. These products include petrol, diesel, liquefied petroleum gas, and other synthetic liquid fuels, as well as industrial pipeline gas and chemical feed stocks.

Sasol Synfuels produces most of South Africa's chemical and polymer building blocks including ethylene, propylene, ammonia, phenolics, alcohols, and ketones.

Sasol Oil reports that operating profits declined marginally by 1%, to R2 417-million, mainly as a result of lower volumes from Sasol Synfuels, owing to the shutdowns and an increased level if imported petrol, diesel, and fuel components.

Sasol reports that the operation is making progress in retail network expansion under the Sasol and Exel brands, with 392 service stations in operations. This exceeds the industry growth.

Sasol Oil markets the group's liquid fuels and lubricants. The division oversees Sasol's interest in the National Petroleum Refiners of South Africa and Tosas, the joint venture bituminous products manufacturer and maker. Sasol Oil also markets Sasol Formula 100 Dual Fuel petrol, through 1 650 blue pumps in South Africa's industrial heartland.

Edited by: Creamer Media Reporter
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