SOUTH African petrochemical company, Sasol, said its coal mining division was recovering from a strike in 2017 although an unplanned mining incident and a fatality had resulted in lower productivity in the six months ended December 31.
The division, which produces most of its coal for its own synfuels manufacturing purposes, produced an interim operating profit of R2.9bn, an increase of 87%, for the first half of its 2018 financial year. Normalised operating profit, which excludes the strike cost from the previous year, registered an increase of 13%. This was owing to a higher selling price to its Synfuels division and a 19% increase in the export price.
“We are currently restoring coal stockpiles through our own production and additional external purchases,” the company said in a statement to the Johannesburg Stock Exchange. “We therefore are targeting a unit cost of production of between R285/ton to R295/ton for the full year,” it said.
“Additional coal purchases will negatively impact on our unit cost per sales ton,” it added.
In the year under review, the normalised unit cost of production increased by 3% above inflation to R284/ton compared to the prior year. “We are now focusing on making the operations safe and consequently, we expect our production to be lower than planned for the full year,” it said.
