SecProbe.io

CORRESP
1
filename1.htm

Confidential Treatment
Requested by Sasol Limited, File No. 1-31615

Ms Jill S. Davis

Branch Chief

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

April 13, 2006

Sasol Limited Form 20-F
for the Fiscal Year Ended June 30, 2005

Filed October 26, 2005

File No. 1-31615

Dear Ms Davis

We refer to the Staff’s comment
letter dated February 17, 2006, relating to the Form 20-F of Sasol Limited (the
“Company”) for the fiscal year ended June 30, 2005. Set forth below in detail
are the responses to the Staff’s comments, which have been provided in each case
following the text of the comment in the Staff’s letter. The Staff is referred to the
definitions contained in the Form 20-F for the fiscal year ended June 30, 2005.

          1.

          We note that on page 37 you state that you are investing $462 million in a
          new polymer plant in a joint venture with the National Petrochemical
          Company of Iran. We note also the information in your financial
          statements regarding the amount of assets, expenditures, capital commitments,
          revenue and loss associated with your operations in Iran. Finally, we
          note that a Reuters article dated February 18, 2005, reports that a firm
          you co-own was fined for the unlicensed sale to Iran of a chemical that
          can be used to make nuclear weapons.

In
light of the fact that Iran has been identified by the U.S. State Department as a state
sponsor of terrorism and is subject to U.S. economic sanctions, please describe
for us the extent and nature of any current or anticipated contacts with Iran that
are not already disclosed in your filing, including through affiliates,
subsidiaries, and other direct or indirect arrangements. Address for us the materiality
of your contracts with Iran, and discuss whether your dealings with Iran constitute a material
investment risk for your security holders.

In
preparing your response, please address materiality not only in quantitative terms, but
also in terms of qualitative factors that a reasonable investor would deem important in
making an investment decision, including the potential impact of corporate activities
upon a company’s reputation and share value. In this regard, we note that Arizona
and Louisiana have adopted legislation requiring their state retirement systems to

Sasol Limited
1979/003231/06

1 Sturdee Avenue Rosebank 2196   PO Box 5486   Johannesburg   2000   South Africa

Telephone +27 (0)11 441 3111   Facsimile +27 (0)11 788 5092   www.sasol.com

Directors: PV Cox (Chairman)  LPA Davies (Chief Executive)  TS Munday (Deputy Chief Executive)  E le R Bradley

WAM Clewlow  BP Connellan  VN Fakude (Executive)  MSV Gantsho  A Jain (Indian)  IN Mkhize  S Montsi

JE Schrempp (German)  Company Secretary: NL Joubert

Confidential Treatment
Requested by Sasol Limited, File No. 1-31615

page 2 of 35

prepare reports regarding state pension fund assets invested in, and/or permitting
divestment of state pension fund assets from companies that do business with countries
identified as state sponsors of terrorism.

In
your materiality discussion, please also address the possibility that products sold into
Iran by you or your subsidiaries could be put to military uses, including the
manufacture of nuclear weapons as noted in the referenced Reuters article.

Response

The
Company, through its affiliates, currently contracts with entities in Iran for the sale of
chemical products. The products are generally used in the detergent, personal care and
food industries and in the production of paints and adhesives. The sale of products to
entities in Iran amounted to R71 million for the fiscal year ended June 30, 2005. These
sales included organic specialities and linear alkylbenzene by Sasol Olefins and
Surfactants, calcined medium temperature pitch coke by Sasol Synfuels, and ketones,
alcohols, acrylates, and glycol ethers by Sasol Solvents. Certain chemicals used for
commercial purposes can be used for, or applied to military purposes. To our knowledge,
the products supplied are not put into military use, although we have recently established
that approximately 1% of the solvents products we sell into Iran have been purchased by
agencies of the Ministry of Defence. As a result, the sales to these agencies have ceased
forthwith.

Through
our subsidiary Sasol Oil International Limited, the Company has a crude oil contract with
Naftiran Intertrade Company Limited for the purchase of 12,000 barrels per day of Iranian
crude oil (4.4 million barrels per annum), for processing at the Natref crude oil refinery
in Sasolburg, South Africa. The contract is negotiated for an annual period January to
December. The value of the contract is estimated at $220 million per annum at current oil
prices. During the 2005 calendar year, Sasol purchased approximately 4.8 million barrels
of Iranian crude oil.

African
Amines, an affiliate of which the Company owns 50%, exported dimethylamine
(“DMA”) in the 2003 financial year to Iran and Australia. African Amines was
fined R100,000 for the exportation to Iran without a permit in violation of the South
African Non-Proliferation of Weapons of Mass Destruction Act, 1993 (Act 87 of 1993). DMA
is used to make a wide range of agricultural chemicals, including herbicides. African
Amines contracted with the export customers prior to the product being listed as a
substance that requires an export permit. The product was listed prior to the actual
export. Although the Company commenced the application of the permit the export was made
prior to receiving the permit. An internal African Amines disciplinary meeting was held on
July 11, 2003 to address the transgression and the appropriate disciplinary actions were
taken. It is the Company’s and African Amines’ policy to comply with
international non-proliferation regulations.

Sasol
Polymers Germany (“SPG”), a company incorporated and having its principal place
of business in Germany, which is an indirect wholly-owned subsidiary of the Company, has
entered into a joint venture with the National Petroleum Company of

Sasol Limited
1979/003231/06

1 Sturdee Avenue Rosebank 2196   PO Box 5486   Johannesburg   2000   South Africa

Telephone +27 (0)11 441 3111   Facsimile +27 (0)11 788 5092   www.sasol.com

Confidential Treatment
Requested by Sasol Limited, File No. 1-31615

page 3 of 35

Iran (“NPC”)
to construct and operate an integrated ethylene and polyethylene production facility in
Iran, Arya Sasol Polymer Company.

The
Company’s capital commitment to the Arya Sasol polymer project was R3,277 million at
June 30, 2005 as disclosed on page 33 of the Form 20-F.

All
contacts regarding our polymers project in Iran have been disclosed in the Form 20-F for
the fiscal year ended June 30, 2005 on the pages as noted by the Staff and no additional
contacts are foreseen.

Arya
Sasol Polymer Company will manufacture only ethylene and polyethylene. Ethylene is one of
the fundamental building blocks in the production of polyethylene. The ethylene which is
not used in the production of polyethylene will be sold to the external market.
Polyethylene is most widely used for the production of packaging materials. The material
is freely traded and is easily available. To our knowledge, these products will not be put
into military use.

We
believe the investment risk of our activities in Iran are adequately disclosed in the Risk
Factors in our 2005 Form 20-F under the caption “There is a possible risk that
sanctions may be imposed by the US Government as a result of our Iran-related
activities.” The risk factor discusses a potential imposition of sanctions in
connection with the Polymers project and also a potential gas-to-liquids (“GTL”)
project opportunity, with respect to which no investment decision has yet been made. The
Company is not progressing a feasibility study on the potential GTL project in Iran,
although this may change. The political situation in Iran is being monitored. If a
stage-one feasibility study is initiated it will, however, take up to two years before the
investment merits of a potential GTL project are precisely determined for consideration
and scrutiny by the relevant risk assessment, governance and investment decision making
bodies within the Company, which will also take full cognisance of the political situation
prevailing in Iran at that time. The Staff will be apprised in future filings of any
progress or changes in this regard. We do not believe the extremely small amount of export
sales to Iran or the purchase of crude oil from Iran for our Natref refinery pose any
material investment risk.

In
considering materiality, we have considered US sanctions legislation and we note the fact
that certain US states have adopted legislation relating to the divestment of state
pension fund assets from companies that do business with countries identified by the US
Government as state supporters of terrorism. To our knowledge our activities in Iran have
not had a negative effect on our reputation or share value.

          2.

          In future filings, please revise your risk factor regarding the possible risk
          that U.S sanctions may be imposed (p26) to:1) disclose that the Iranian
          Transactions Regulations prohibit or restrict most transactions between
          U.S. person and Iran, and that they are stated to have been adopted, in part, as
          a result of Iranian sponsorship of international terrorism and active
          pursuit of weapons of mass destruction; and 2) make clear that the Iran
          and Libya Sanctions, now applicable only to Iran, was adopted

Sasol Limited
1979/003231/06

1 Sturdee Avenue Rosebank 2196   PO Box 5486   Johannesburg   2000   South Africa

Telephone +27 (0)11 441 3111   Facsimile +27 (0)11 788 5092   www.sasol.com

Confidential Treatment
Requested by Sasol Limited, File No. 1-31615

page 4 of 35

          with the
          objective of denying those countries the ability to support acts of
          international terrorism and fund the development or acquisition of
          weapons of mass destruction.

Response

We
confirm that in future filings we will disclose the fact that the Iranian Transaction
Regulations prohibit or restrict most transactions between U.S. persons and Iran.
Additionally we will amend our disclosure to note that the Iran and Libya Sanctions Act is
now applicable only to Iran.

We
do not believe that references as to why the laws and regulations are stated as having
been adopted provide information relevant to the investment risk of the Company’s
investments in Iran to the reader of the Form 20-F. Moreover, as a South African company,
we are unable to comment on the political issues influencing US legislation.

          3.

          We note your disclosure indicating that the Governments of South Africa and
          Mozambique have a call option to acquire 50% of the shares of Rompco.
          Please describe to us in further detail the terms of the call option.

Response

From
the inception of the Mozambique Natural Gas Project the Company, as project sponsor and
developer, agreed with the Government of South Africa, as well as the Government of
Mozambique, the participation of Government-owned/controlled companies in the pipeline
portion of the project.

Republic
of Mozambique Pipeline Investments Company (Proprietary) Limited (“ROMPCO”) is
the South African incorporated company in which the pipeline portion of the project vests.

Upon
the request of the two Governments, the participation of the Government-nominated
companies, iGas (Proprietary) Limited (owned by the South African Government) and
Companhia de Moçambique de Gasoduto S.A.R.L. (“CMG”) (owned by the
Mozambique Government), was structured as an option to jointly acquire up to 50% of the
shares in ROMPCO. The detailed structure of the option was agreed to by the parties in the
ROMPCO Shareholders’ Agreement. In order to give effect to this option, a dual share
structure was implemented in ROMPCO in terms of which Sasol Gas Holdings (Proprietary)
Limited initially held 100% of the beneficial shares (full voting rights and rights to
dividends), the so-called Class B shares (10 million Class B shares). Each of iGas and CMG
initially held 2.5 million Class A shares (shares which have limited voting rights and no
right to dividends). Each Class A share affords the holder thereof a call option on 1
Class B share in ROMPCO, at a price determined in accordance with the price formula agreed
to by the parties in the ROMPCO Shareholders’ Agreement.

Sasol Limited
1979/003231/06

1 Sturdee Avenue Rosebank 2196   PO Box 5486   Johannesburg   2000   South Africa

Telephone +27 (0)11 441 3111   Facsimile +27 (0)11 788 5092   www.sasol.com

Confidential Treatment
Requested by Sasol Limited, File No. 1-31615

page 5 of 35

The
price at which iGas and CMG can purchase Class B shares from Sasol Gas Holdings is based
on the total capital invested in the construction of the Mozambique to South Africa
pipeline, together with an agreed risk premium. In the case of iGas, the option was
available until three months after the Company presented iGas with reserve reports by
independent reserve auditors indicating sufficient gas reserves in order to provide the
base load volume of 120 MGJ for the 25 year duration of the project. In the case of CMG
the option remains available until three months after the second anniversary of the
commercial commencement of the project and will accordingly lapse on June 26, 2006.

With
effect from July 1, 2005 iGas exercised its option to acquire 25% of the issued Class B
shares in ROMPCO from Sasol Gas Holdings, in accordance with the provisions of the ROMPCO
Shareholders’ Agreement.

CMG
is currently in the process of finalizing negotiations with a number of financiers to
acquire financing in order to exercise its option. In terms of the provisions of the
option, iGas will have the right to acquire the Class B Shares in respect of which CMG is
not able to exercise its option before the termination date thereof.

On
March 22, 2006 CMG submitted to Sasol Gas and iGas a formal request for the extension of
their option in order to afford it time to conclude its financing negotiations. The
request by CMG is currently being considered by the ROMPCO shareholders.

The
exercise of the option will affect neither the participating interests in the
unincorporated gas fields joint venture, nor the gas sales and gas transportation
contractual arrangements.

The
Company believes that the business risk profile of the particular investment will not be
adversely affected as a result of the exercise of the option. On the contrary, the Company
believes that the exercise of the option would positively affect the political risk
profile of the investment.

          4.

          We note your disclosure of the explosion at the Secunda West ethylene
          production facilities which R236 million insurance proceeds were
          received, net of excess payments. Please quantify the total proceeds
          received and separately state what amount was attributed to property casualty
          loss and business interruption insurance. Tell us how you have
          categorized these proceeds in your statement of cash flows. Additionally
          tell us the total costs associated with this event and whether further costs
          will be incurred in relation to this incident.

Response

The
total insurance proceeds received for the explosion at the Secunda West ethylene
production facility amount to R384 million. Of this amount R225 million was received in
respect of business interuption losses and R159 million in repect of property damage. The
excess payment for the business interuption losses claim was R68 million and the property
damage claim was R12 million. In preparing the disclosure provided on page