Energy and chemicals group Sasol is aiming to begin ramping up internal coal production and reducing external coal purchases after its destoning plant reached beneficial operation in December.

CEO Simon Baloyi said the project, which involved a repurposing of the Twistdraai export coal plant, had been completed within its budget of about R700-million and was facilitating the delivery of coal to Sasol's Secunda Operations with a total sinks content of about 12%.

This lower level of rock fragments and other impurities in the material is expected to significantly reduce the damage caused to Secunda's gasifiers by low-quality coal. It is also expected to increase yields from the gasifiers, which provide the synthetic-gas feedstock needed to produce fuels and chemicals at the Mpumalanga complex using the Fischer-Tropsch process.

Sasol is now also leasing out its export entitlement at the Richards Bay Coal Terminal.

"External coal purchases remained elevated in the first half during the destoning plant ramp-up and while coal purchases will continue in the second half to supplement our own production, it is expected to be lower than the first half and to normalise in financial year 2027," Baloyi said.

During the interim period external purchases of 4.9-million tons were required to balance lower own production and support increased coal consumption at Secunda Operations.

CFO Walt Bruns told Engineering News that external purchases would fall in the second half to about 4-million tons and that he expected them to normalise to a yearly rate of between 4-million and 6-million tons.

Previously closed low-quality sections had already been brought back into operation, and the focus was now on increasing internal production volumes, with saleable production expected to be 28-million to 30-million tons in the 2026 financial year.

Bruns indicated that Sasol was aiming to increase that to between 32-million and 34-million tons, but introduce that additional internal supply at costs below the average of R700/t it was spending to source coal externally.

It might also need to expand its destoning operations, but Bruns said there was other coal washing capacity available and that the group could, thus, consider toll processing instead.

HIGHER SECUNDA OUTPUT

Sasol reported weaker financial results for the period on the back of difficult market conditions and impairments, with earnings before interest and tax of R4.6-billion being 52% lower than the prior period.

Nevertheless, it was able to report a 10% period-on-period increase in output at its Secunda Operations to 3.7-million tons during the interim period, owing to improved gasifier performance and the fact that there had been no phased shutdown during the period.

It maintained its full-year production guidance of between 7-million and 7.2-million tons, however, indicating that the repair of its gasifier fleet was still ongoing.

In Mozambique, meanwhile, gas production was 4% lower than the prior period, which Sasol attributed mainly to the expected natural decline in producing wells from its Petroleum Production Agreement (PPA) asset in Pande and Temane.

This was only partially offset by an increasing contribution from the Production Sharing Agreement (PSA) that was ramping up.

"External gas sales in South Africa was 6% lower than the prior period mainly due to lower customer demand resulting from business closures. Internal demand was also lower due to increased pure gas production from coal at Secunda Operations during the first half of 2026," Sasol said.

Combined gas production volumes in 2026 from the PPA and PSA licence areas in Mozambique have been revised to between 0% and 5% below that of the 2025 financial year, from 0% to 10% above 2025, mainly due to delays in relation to the PSA and Central Térmica de Temane (CTT) gas-to-power project.

Sasol booked an impairment of R3.9-billion in relation to PSA during the period, indicating that while the quantum of gas remained unchanged, a r...