Jon Harris

Jon Harris
Executive Vice President:
Upstream Business



Cost and safety leadership position in South Africa

Sustainable feedstock to SA value chain

Continuous Improvement mindset delivering value

R14 bn mine replacement programme completed below budget and without supply disruption

Successful B-BBEE partnership in place with Ixia Coal


Deliver value growth from oil and gas asset development

Strategic producer in Mozambique

Focus on maintaining plateau and maximising discovered southern Mozambique resources

Valued partner in Gabon oil

Optimising portfolio: Divest Canadian shale assets

Earnings before interest, tax, depreciation
and amortisation (EBITDA)*
Mining: 13%
E&PI: 4%
Energy: 38%
Perfmance Chemicals: 24%
Base Chemicals: 18%
Group functions: 3%

Advancing our strategy in phases


Explore and produce gas in Southern Africa

Secure coal feedstock to 2050

Grow in Mozambique and West Africa

  • Develop Southern Mozambique to its full potential together with our partners
  • Deliver full potential of our Gabon asset
  • Continue to develop a risk balanced portfolio of growth options to execute in line with balance sheet fl exibility
  • Secure low-cost coal feedstock
  • Acquire producing assets with exploration running room
  • Continue to invest in the early part of exploration life cycle and farm down for value
  • Active management of portfolio to deliver long term absolute EBIT growth while remaining within the remit of Group ROIC

* Refer to Inside back cover for definition of EBIDTA.



Mining is responsible for securing the coal feedstock for the Southern Africa integrated value chain, mainly for gasification but also to generate electricity and steam. By doing this, we convert low-cost coal to higher-value products.


Safety performance marred by three tragic work-related fatalities

Business improvement programme yielding higher productivity and cost efficiency

Higher external coal purchases and reduced export sales to enable continuous supply to the Sasol value chain

Acquired additional mining rights, ensuring sufficient coal reserves to supply Secunda to 2050

Reached three-year wage agreement with trade unions, in support of maintaining labour stability and an uninterrupted coal supply

Extended homeownership programme, benefiting 140 employees since January 2016

Increased engagement with our people, particularly on safety and B-BBEE transactions

Looking ahead

In the year ahead, as our R14 billion mine replacement programme nears completion, achieving safe operations remains our top priority. We continue our work to ensure our long-term sustainability by also maintaining our compliance with B-BBEE ownership requirements as well as securing the least-cost, optimum-quality coal for our Secunda operations to 2050. We are monitoring regulatory requirements and continue to participate in related discussions through the Minerals Council South Africa. As part of our digitalisation efforts, we are implementing solutions to better integrate all mining operations and monitor machines and people more accurately. We remain focused on strengthening our relationships with recognised trade unions, government and our fenceline communities.


2018 marked the second of two very challenging years at our mining operations. 2017 was marred by a prolonged labour strike which impacted productivity, employee morale and engagement and led to several cost increases. In 2018, our operations were affected by three tragic work-related fatalities, those of Mr Dumisani Sibanyoni on 6 December 2017, Mr Mandla Mahlangu on 24 January 2018 and Mr Nefthali Sepeame on 9 February 2018. Safety remains our top priority and we are deeply concerned about these fatalities. In the year, we took decisive action to refocus on safety. We implemented a complete work stoppage to pause and reflect on our safety performance and carried out a month-long safety campaign to identify the root causes and learnings of high-severity incidents, which we are sharing across our operations. Given the fatalities and work stoppages, productivity declined.

However, to enable an uninterrupted supply, we purchased coal from third parties and reduced sales of export coal. To ensure continuity of coal supply to Secunda Synfuels until 2050, we secured a mining right for Block IV at Syferfontein colliery and received approval from the Department of Mineral Resources to acquire two important reserves – Alexander and Rietfontein.

We are committed to creating a safe place for our employees to work and to restore productivity. To this end, we implemented a business improvement plan aimed at improving productivity to levels last seen in 2011 and reducing costs through digitalisation and improving our work processes. We started to see some of the early benefits of the programme, with increased productivity from March 2018. Our employees are more positive and leaders are spending more time in mining operations to coach, mentor and support our people.

For the first time ever, we reached a multi-year wage agreement with all our participating trade unions, which will support labour stability in our operations. We continued to build our relationships with all stakeholders and embarked on leadership capability development for management and union leaders.

Saleable production

Saleable production

External purchases

External purchases

Unit cost per production ton

Unit cost per production ton

Exploration and Production International

Exproration and production international

Exploration and Production International (E&PI) develops and manages the Group’s upstream interests in oil and gas exploration and production. We have assets in South Africa, Mozambique, Gabon and Canada.


Safety performance impacted by a tragic fatality in Mozambique

Advanced work in Mozambique, completed drilling campaign in PSA licence area and maintained stable gas production at PPA facilities

Spent R48,2 million on social investment in Mozambique

Refocused portfolio, commenced with disposal process for Canadian shale gas assets

Recorded 12% decline in Gabon production as a result of the field’s natural decline

Normalised EBIT* of R270 million

Sustained US$ profitability in Mozambique due to higher sales prices

Looking ahead

Achieving zero harm remains our top priority as we reshape E&PI into a fully-fledged oil and gas company and restructure the portfolio for growth. In Mozambique, we continue to work to sustain our relationships, consolidate existing assets and pursue additional exploration licences. We are considering partnerships with other oil and gas operators to secure the feedstocks required by Sasol’s South African plants up to and well beyond 2050 and to maximise shared value with that country’s government. In Central and West Africa, we are pursuing both development-ready and producing assets, partnering with independent, small to medium-sized players to extract value.

Performance summary

Higher gas and crude oil sales prices supported a cash profit of R2,5 billion. Our existing operations in Mozambique and Gabon benefited from higher prices, however volumes were impacted by lower demand in Mozambique and the natural decline of the field in Gabon. Despite our positive cash profit earnings before interest and tax was lower due to the impairment of our Canadian shale gas operations of R2,8 billion and the impairment of the Mozambique PSA project of R1,1 billion.

In line with our strategic objectives, we continued to pursue the development of the PSA and explore for opportunities in West Africa. Our capital allocation framework guides us in first de-deleveraging the balance sheet and then looking for smaller investments to grow the portfolio. We are advancing the process to sell our Canadian shale gas assets and will make further announcements once the process is further advanced.

In Mozambique, we completed all the defined activities in the field development plan (FDP) licence area. Results for phase 1 showed that oil production would likely be at the low to mid-range presented in the FDP while gas volumes were within the FDP’s ranges. We are evaluating the future monetisation of the project and have already realised substantial capital savings by scaling back the oil development.

Engagements have continued to enable the Central Termica de Temane or CTT, previously known as Mozambique Gas to Power (MGtP), to which the phase 1 gas volumes are committed. Phase 2 appraisal drilling results indicate gas volumes to be lower than initial estimates. After a successful annual shutdown in March 2018, our Petroleum Production Agreement (PPA) facilities continued to meet the production volumes in their gas sales agreements. Regrettably, we reported a work-related fatality. Mr Nelson Alberto Vilanculo, an employee of a service provider at our PSA drilling rig site, was fatally injured in a vehicle accident on 25 August 2017. Safety remains our top priority.

In Gabon, we focused on maximising the efficiency of the Etame Marin Permit asset and extending the producing licence beyond 2021. In line with our strategy, we farmed into the DE8 block, acquiring a 40% working interest and drilled one exploration well which was written off. We are actively looking at other licences in the region. This is part of our goal to acquire early, high-equity positions in exploration assets to provide portfolio leverage through early cycle exploration farm-outs to defray capital and risks.






* Normalised earnings represent reported EBIT adjusted for remeasurement items and the closing rate translation effects based on information contained in the published Group consolidated annual financial statements for the year ended 30 June 2018.