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Report: Sasol plans sale of South African coal mining business in coming weeks

Sasol Ltd. plans to start a formal sales process for its South African coal mining business in the coming weeks, Bloomberg News reported Sept. 18, citing people familiar with the matter.

With a turnover of 20 billion South African rand in 2018, the mining business produces about 40 million tonnes of coal per annum and sells almost exclusively to other parts of the Sasol group.

The company also plans to sign a coal purchase agreement with whoever buys the mining business, one of the sources said.

Sasol refused to directly comment on a possible mine sale but said that it will not sell assets at suboptimal prices.

Sasol announced a long-term review process in November 2017 involving the disposal of certain assets and said in May that it will accelerate the asset sale program.

The potential disposal could also help Sasol ease its environmental liabilities as investors are increasingly becoming concerned about the effect of businesses on climate change.

This comes following a recent review that increased the estimated cost of the company's Lake Charles chemical project in Louisiana by about US$1 billion.