Sasol is increasing investment in its coal mining operations as it works to secure the feedstock needed to boost production at its Secunda Operations and reduce reliance on externally purchased coal.
The move comes as the energy and chemicals group cuts overall capital expenditure across the business.
Sasol’s Secunda Operations produced 7.2 million tonnes of coal in the year to June 2026, its highest level in five years. The company is targeting production of between 7.2 million and 7.4 million tonnes in the 2027 financial year.
More Coal From Its Own Mines
Sasol bought 8.8 million tonnes of coal externally during 2026. It expects that figure to fall to between 5 million and 7 million tonnes in the coming financial year.
At the same time, the group plans to increase its own coal production from 28.4 million tonnes in 2026 to between 30 million and 32 million tonnes in 2027.
Sasol ultimately wants to supply 34 million tonnes from its own mines by 2028.
CEO Simon Baloyi said the company was focused on improving coal quality, increasing production from its own mines and making its feedstock more cost competitive.
Mining Gets More Investment
While Sasol’s overall capital expenditure has been falling, investment in its mining operations has moved in the opposite direction.
Mining capex increased from R2.9 billion in 2024 to R4.1 billion in 2026. The company expects to invest another R1 billion to R1.5 billion more in mining during the 2027 financial year.
The additional investment includes work on replacing a mining shaft.
Meanwhile, Sasol has reduced its overall 2027 capital expenditure guidance from between R27 billion and R29 billion to R22 billion and R25 billion.
Coal Also Important For Future Gas Supply
The company’s coal strategy is also linked to its plans to produce methane-rich gas for industrial customers.
Sasol is exploring this as a potential bridge solution ahead of the expected loss of natural gas supplies from Mozambique from 2028.
However, the company says it needs greater certainty around gas pricing before making a final investment decision on the project.
For now, Sasol’s priority remains clear: produce more coal internally, improve its quality and reduce dependence on external suppliers while keeping Secunda running efficiently.
Main Image: Moneyweb
