SOUTH African petrochemicals group, Sasol, is to keep its coal mining business, said Reuters citing its CEO, Fleetwood Grobler.
“There was some speculation about the future of our mining business, but I want to clarify mining is a key driver to the integrated coal to liquid value chain and we intend to keep it,” Grobler told a news conference, after Sasol reported a 74% drop in interim profit.
It was speculated in September last year that Sasol would sell the 40 million tons per year coal operations as the company grappled with cost overruns and delays at its giant US chemicals project, Lake Charles.
Selling its coal mines would also help Sasol reduce its environmental liabilities at a time when more investors are focusing on how businesses affect climate change, it was said at the time of the speculation.
By October, however, it was less clear that Sasol wanted to go this way with Paul Victor, Sasol CFO, telling Energymx that some of the group’s assets offered an important cost and competitive advantage.
“From a cost perspective we produce essentially Brent crude at a cost equivalent of $35 to the barrel. There are few assets globally that have that competitive advantage,” said Victor. “You cannot give that kind of competitive advantage away.”
Victor said that having a sustainable future didn’t mean the complete absence of coal in its asset portfolio. “Sustainable doesn’t mean zero carbon,” he said.
“Do we want to grow our export capacity? No, and we never said that we wanted to. Do we want to grow our CTL? No.
“So we need to evaluate how these things contribute towards a sustainable future. Once we have done that, we will communicate to the market,” he said.
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