Because the world embraces a simply vitality transition, petrochemicals big Sasol stands at a essential crossroads as one among South Africa’s largest industrial employers and a key pillar of South Africa’s vitality and petrochemical sectors.
With this in thoughts, Sasol’s ‘Sasol South Africa – The Simply Transition: Jobs, Justice and Prospects’ report, examines the rising operational, monetary, environmental and social pressures going through Sasol and the implications for employees, communities, municipalities and South Africa’s industrial future.
Throughout a dialogue on Could 29, chemical engineer Dr Bruce Younger mentioned a few of the report’s findings, highlighting that about 27 000 direct and 425 000 oblique jobs rely on Sasol’s operations within the nation.
He mentioned a giant restructuring was possible within the cities of Secunda and Sasolburg, arguing that planning wanted to start out now.
“Cutbacks are unlikely to occur all of sudden. Half of Sasolburg, for instance, is predicated on fuel feedstock. The opposite half processes feedstock from Secunda. Because the fuel runs out in Sasolburg, there may be an inevitable restructuring coming there.”
Younger defined that Sasol was closely linked into the South African economic system, noting that plastic manufacturing alone, for instance, multiplied into 25 000 direct jobs downstream.
Therefore, he reiterated the significance of correct planning, noting that expertise in coal-based industries didn’t simply switch to photo voltaic, wind or new industries.
“With no plan, hundreds of jobs and whole communities are in danger.”
Younger identified that Sasol was going through challenges on a number of fronts.
He described Sasol South Africa’s monetary place as fragile, noting that the corporate had excessive debt and a weak steadiness sheet. He additionally famous that the corporate’s income have been too low to fund full-scale technological transformation.
Younger highlighted feedstock challenges, which included quantity decline, high quality prices and transport prices for coal. He additionally famous that, as fuel ran out, liquefied pure fuel (LNG) was not reasonably priced.
Moreover, he defined that the ageing plant would require vital funding to interchange.
One other problem contains the goal to scale back emissions by 30% by 2030 and to succeed in internet zero by 2050.
He additionally famous that the chemical substances being produced by Sasol have been going through declining volumes, describing the worldwide chemical setting as “extremely aggressive and oversupplied”.
SECUNDA
Younger highlighted that coal mining productiveness at its operations in Secunda had been in a long-term decline and that the fee per ton had been steadily growing.
He famous that the Isibonelo Colliery, which provides about 10% of Secunda’s coal, was depleted, with long-term substitute coal provide unsure.
He mentioned there was an general development of rising feedstock prices, worsening coal high quality and rising provide safety dangers.
When it comes to manufacturing, Younger mentioned Secunda’s economics have been extremely volume-sensitive, with decrease output weakening profitability and money circulation.
He famous that Sasol had reversed its earlier greenhouse-gas-driven coal discount technique, with the corporate now concentrating on 7.4-million tonnes a yr by 2028.
“Secunda manufacturing has been going through a long-term decline, primarily since 2019.
“In order that’s a persistent development and, understandably, that development can’t proceed and [for] Secunda to proceed to function, they’ve to handle that,” mentioned Younger.
He added that Sasol’s 2025 monetary statements nonetheless projected long-term decline, with output falling to seven-million tonnes a yr by 2030 and to six.4-million tonnes a yr from 2034.
He attributed the decline in manufacturing to worsening coal high quality, feedstock constraints and ageing infrastructure, noting that the decline after 2028 would largely be pushed by pure fuel decline.
Therefore, the corporate’s coal destoning venture goals to enhance feedstock high quality and stabilise manufacturing.
“All indications are that that venture goes properly,” he mentioned.
Younger warned that the chance of doing nothing amid the simply transition may end in a lack of technical experience and will have unfavorable impacts on jobs, households, cities and the economic system.
“Planning wants to start out now – to scale back job losses, damaged cities and to develop security nets.”
Following Younger’s presentation, Crompton Consulting CEO Dr Rod Crompton mentioned all gear and equipment had a finite life, including {that a} level can be reached the place it was too costly to restore or exchange machines, or the place new applied sciences would change into extra aggressive than present expertise.
“Secunda is the one supply of petrochemicals on this economic system, and for 50 years there’s been no plan on what to do after Secunda for petrochemicals.
“So when will Sasol Secunda run into issues? Properly, we all know what the fuel provide is doing, we have got a forecast from Sasol, however for the remainder it is tough to say. It additionally relies upon lots on the oil costs . . . but it surely might be earlier than we expect,” he mentioned.
Crompton described Sasol as being weak, recommending that the corporate begin getting ready for the simply transition by placing measures in place sooner somewhat than later.
MOVING FORWARD
In an effort to mitigate these points, Crompton prompt some actionable steps.
He identified that the report advisable motion on all points instantly.
Moreover, he mentioned employees and unions ought to be a part of coordinated negotiation and planning on the technical and operational modifications on financial sustainability; that authorities, enterprise and labour ought to assist create retraining programmes and help new industries; and that communities wanted to be concerned within the native plans.
“Funding and commitments are key. Worldwide companions are providing assist, but it surely’s not sufficient.”
He expressed that each path ahead concerned advanced trade-offs between industrial competitiveness, social safety, environmental considerations, and authorities urge for food and capability for interventions.
He reiterated the necessity for early planning and coordinated motion to keep away from unplanned penalties.
