South Africa

Sasol grapples with Transnet’s rail and pipeline chaos

Sasol, South Africa’s biggest company by revenue, said unabated rail snarl-ups hampered its chemical shipments, and pipeline disruptions slowed deliveries to its oil refinery, highlighting the deficiency of services provided by state logistics firm Transnet. 

“While overall supply-chain performance has improved and close collaboration with Transnet continues, it remains a risk to our business,” Sasol said in a production and sales update on Monday. 

The company’s coal export sales remained flat in the three months through September due to “operational challenges” at the rail operator, while its 108,000 barrel-a-day Natref refinery took delivery of less crude than expected because the illegal tapping of a Transnet pipeline that supplies the plant led to eight outages. 

Anglo American spinoff Thungela Resources and Glencore have also complained that a lack of capacity on Transnet’s 20,000-kilometer freight rail network limited their ability to export coal just as prices surged after Russia’s invasion of Ukraine.

The delivery of other goods has also been hit. A force majeure declared by Sasol last year on the local supply of ammonia remains in place due to a shortage of rail cars. 

Spokespeople for Transnet weren’t immediately able to comment. Transnet Chief Executive Officer Portia Derby will leave her post at the end of October, while several other senior executives have also resigned in the face of criticism about the company’s poor performance.  

“In South Africa, our suppliers and customers face ongoing business disruptions” because of the challenges at Transnet, including senior leadership changes, Sasol said.