Energy and chemicals group Sasol has again reduced its coal production forecast for the current financial year, owing to ongoing quality problems affecting production at its Secunda Operations, where coal and gas is converted into fuels and chemicals.

In a production and sales update, the JSE-listed company said production from its mining unit had been revised down to between 28-million tons and 30-million tons, while its coal cost range had been revised to between R650/t and R670/t.

“The destoning project to improve the quality of coal is progressing well and remains on track for completion in the first half of the 2026 financial year, within the previously communicated cost of less than R1-billion.

“However, to support gasifier effectiveness for the period until the destoning plant is in beneficial operation, a management decision was taken to reduce own coal production by a further two-million tons and replace it with higher quality purchased coal, which contains lower sinks,” Sasol said in a statement.

Sinks refers to material mined with the coal that contains rock fragments, as well as other impurities.

Sasol is currently repurposing its Twistdraai export coal plant into a 10-million-ton-a-year destoning operation to improve the quality of coal being used in its gasifiers at the Secunda Operations, in Mpumalanga.

Once blended with other coal sources, Sasol aims to decrease the sinks or stone content of the coal feedstock to less than 12%, with the material that will be processed through Twistdraai expected to have only 1% sink material

The destoning initiative is also central to the group’s strategy for recovering yearly output at Secunda Operations to above 7.4-million tons.

Sasol has maintained its production guidance for Secunda Operations this year at between 6.8-million and 7-million tons.

“Fuels sales volumes are expected to decrease to 1% and 3% lower than the 2024 largely due to the supply disruptions,” Sasol said, referring to an unplanned outage at Secunda Operations and a delay in the production ramp-up after a fire at the Natref refinery in January.

“Chemicals Africa sales volumes are also projected to be 2% to 4% lower than the 2024 financial year, driven by lower Secunda Operations production and the uncertainty surrounding ongoing global tariff disputes.”

Sasol said it was actively assessing the potential impact of US tariffs on its operations, supply chain, and pricing strategies.

“Engagements with the relevant stakeholders are ongoing and we remain focused on ensuring continuity, mitigating potential disruptions and identifying any upside opportunities for Sasol.”