Sasol is reducing its purchases of coal from external suppliers as the group increases investment in its own mining operations to secure feedstock for its Secunda synfuels plant, with production at the facility reaching a five-year high of 7.26 million tons in the 2026 financial year.

The JSE-listed energy and chemicals group produced 28.4 million tons of coal from its own mines in the year to June 30, 2026, and expects that volume to increase to between 30 million and 32 million tons in the 2027 financial year, before rising further to 34 million tons by 2028. External coal purchases are projected to fall from 8.8 million tons in 2026 to between 5 million and 7 million tons in 2027.

The shift reflects the substitution of externally purchased coal with own-mine production and does not indicate an equivalent decline in Sasol's overall coal requirements. CEO Simon Baloyi said during a results presentation that the implementation of a R1-billion conversion of the Twistdraai export-coal washing plant into a destoning facility had materially improved coal quality, with sinks — or impurities — reduced to below 12%.

"Looking ahead, we will ensure sustained coal quality while focusing on increasing own coal production, reducing external coal purchases and improving the cost competitiveness of our feedstock," Baloyi said during the results presentation.

The improved coal quality, combined with greater gasifier availability and the absence of a scheduled shutdown in the 2026 financial year, contributed to Secunda Operations achieving its highest annual output in five years. A shutdown is planned for the 2027 financial year, with Sasol forecasting production of between 7.2 million and 7.4 million tons.

Mining-related capital expenditure is defying the downward trend in the rest of the group, rising from R2.9 billion in 2024 to R4.1 billion in 2026, while group-wide capex fell to R20.9 billion. CFO Walt Bruns told Engineering News & Mining Weekly that Sasol Mining was likely to invest between R1 billion and R1.5 billion more in the 2027 financial year than the R4.1 billion invested in the prior year, including in a shaft replacement project.

Executive Vice President for Mining Sandile Siyaya confirmed that Sasol would continue to reduce external purchases, having bought 8.8 million tons in 2026. "We have given guidance of between 30 million and 32 million tons," Siyaya said, reaffirming the goal of supplying 34 million tons from internal collieries by 2028.

Sasol is also evaluating the production of methane-rich gas from coal as a bridge supply for industrial customers facing a gas supply crunch from 2028, when the company halts natural gas supplies from Mozambique. Baloyi described the National Energy Regulator of South Africa's approval of its gas pricing application as a "positive step towards enabling the MRG bridge solution". Nersa approved a maximum gas price of R97.31 per gigajoule for the first quarter of the 2026/27 financial year for end-user customers and R92.44/GJ for traders and resellers.

However, Baloyi said Sasol would not make a final investment decision on the MRG-related investment until there was greater pricing certainty for a longer period. Bruns indicated that the company would need to invest in additional pipeline infrastructure to facilitate the supply of MRG to industrial customers, which currently consume about 40 petajoules of gas yearly.