Sasol, a major producer of synthetic fuels in South Africa, has reduced production at its Secunda Operations as a result of a significant coal supply shortfall.
In an update to the market on Monday, Sasol said its forecast production volumes for Secunda for the current financial year has been revised to between to 6.7 and 6.8 million tons, down from a previous forecast of between 7.3 and 7.4 million tons.
Sasol produces synthetic fuels at Secunda with the use of its world leading coal-to-liquids technology.
The revised production stems from a significant shortfall in coal supply which has resulted from production issues at Sasol’s coal mines where, since the end of October, three major production impacts have resulted in more than 1 million tons of lost coal production.
These include significant safety events, adverse weather conditions and some significant operational challenges.
"Due to the lower than expected coal availability and coal quality, we have reduced Secunda Operations production rates until such time that our mining productivity rates increase and we have rebuilt our coal stockpile to well above our threshold requirements," the group said in a statement.
"We are committed to gradually lift production rates as coal availability improves, while carefully monitoring the supply and demand balance We will also supplement our production shortfall by purchasing coal on the open market. It is not possible to determine the shortfall at this point."