Table of Contents
Key Points
- Sasol reduces gas production in Mozambique due to safety concerns amid post-election violence and instability.
- The unrest disrupts Mozambique’s operations and threatens South Africa's energy supply via the Rompco pipeline.
- Sasol CEO Simon Baloyi steers the company through global challenges, focusing on sustainability and innovation.
Gauteng-based energy and chemicals group Sasol, led by South African executive Simon Baloyi, has scaled back natural gas production at its Temane processing plant in Mozambique.
The decision comes amid rising safety concerns fueled by post-election violence, which has disrupted the region's stability and industrial operations.
The unrest, triggered by Mozambique’s contentious October elections, has led to widespread instability, claiming at least 54 lives this week.
The volatility has disrupted South32’s mining activities and temporarily closed Mozambique’s main border crossing with South Africa, creating ripple effects across industries reliant on regional connectivity.
Heightened security measures amid regional unrest
Sasol’s precautionary measures reflect the severity of the situation. “We are operating with heightened caution to ensure the safety of our personnel, service providers, and local communities,” Sasol spokesperson Alex Anderson said Wednesday.
While no security breaches have been reported at the Temane site, Anderson emphasized the company’s commitment to safeguarding its assets in an increasingly volatile environment.
The production scale-back carries significant implications for South Africa, which depends heavily on the Rompco pipeline to transport natural gas from Mozambique to Sasol’s Secunda industrial complex.
As a critical energy source for provinces like Gauteng and KwaZulu-Natal, any sustained disruption could strain South Africa’s already precarious energy infrastructure.
Broader impact on Mozambique’s energy sector
The unrest, exacerbated by allegations of electoral fraud following Frelimo’s confirmed victory in October, has raised broader concerns about Mozambique’s stability.
Protests have escalated, spreading to public institutions, including prisons, and threatening the viability of the country’s natural resource sector—a cornerstone of its economy that has attracted substantial foreign investment.
Although Sasol’s Temane facility remains operational under heightened security, prolonged unrest could jeopardize the company’s ability to meet its gas supply commitments, with potential knock-on effects for regional energy plans.
Sasol’s strategic resilience
Under CEO Simon Baloyi, who took over in April 2024, Sasol is navigating an array of challenges, from regional unrest to global financial pressures.
The company reported a R56.7 billion ($3.2 billion) loss in the last fiscal year, its first since 2020, driven by asset devaluations in the U.S. and South Africa.
Despite these setbacks, Sasol continues to push forward with its strategic initiatives. The company is expanding its gas supply network to serve over 300 South African customers and exploring electricity generation from natural gas as part of its energy transition efforts.
Additionally, Sasol is partnering with Topsoe to develop an e-fuels demonstration plant in Germany, signaling its intent to lead in sustainable energy innovation on a global scale.
