Recession won't dampen Sasol's mining plans


Recession won't dampen Sasol's mining plans

Published Date: 2017-06-10 | Source: Fin24 | Author: Lameez Omarjee

Recession won't dampen Sasol's mining plans

Sasol will not be deterred by the low growth environment and remains heavily invested in Southern Africa for the long term.

This is according to Lucky Kgatle, senior Vice president of Sasol mining. He was speaking at a briefing at Shondoni Colliery in Mpumalanga on Thursday.

Shondoni, which means "place of wealth", is one of four new mines part of a R14bn mine replacement programme. The other new mines are Thubelisha which replaced Twistdraai, Impumelelo which was traded for Brandspruit and Syferfontein which was expanded. Shondoni supplanted the Middelbult mine.

When asked about Sasol's commitment to the projects in light of the low growth environment and recent reports that the country is in recession, Kgatle affirmed the chemicals and energy company was taking a long-term investment view.

"I do not know any other mining houses who spent R14bn in South Africa in terms of projects," he said, adding that Sasol remained committed to long-term investments in Southern Africa.

Kgatle explained that the recession was cyclical and that Sasol and that it would not abandon its longer term investments simply because the investment environment became challenging in the short term. He added that the projects remain a compelling case for investment.

New mines

Shondoni mine, which is 94% complete, is expected to produce between 8.5 million and 10.5 million tonnes of coal per year. Of the R5.46bn budget only R4.53bn has been spent.

Construction of Thubelisha, which means "new beginning", has been completed. Kgatle commended the project for being under budget and on time. The colliery is expected to produce 10.5 million tonnes of coal per year. Of a budget of R3.386bn, only R3.286bn was spent.

Impumelelo, which means "success through working together", is in phase two of its construction, or 40% complete, is expected to produce between 8.5 million and 10.5 million tonnes per year for the R5.566bn allocated budget, only R4.801bn has been spent.

Syrerfontein, part of an expansion from Tweedraai, is expected to produce 2.5 million tonnes of coal. Of the allocated budget of R1.378bn, only R1.251bn was spent to compete construction.

Only two fatalities were incurred on the projects so far, back in in 2010 and 201 at Thubelisha and Impumelelo.

Over 40% of labour was recruited from local communities in which the mines will operate, explained Kgatle. Over 90% of the workforce is South African. Kgatle said that the ratio of employment at the new mines has not changed. Jobs have neither been lost nor have new ones been added.

The company also embarked on a rehabilitation programme of old mines that include Twistdraai Central and West, as well as Middelbult North and Brandspruit. The spend on these programmes amounted to over R51m.

Shondoni Colliery, in Secunda. The mined coal is used at Secunda's synfuels operations.