SecProbe.io

CORRESP
1
filename1.htm

Page 1

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) E le R Bradley  BP Connellan  HG Dijkgraaf (Dutch)
VN Fakude (Executive)  MSV Gantsho  A Jain (Indian)  IN Mkhize  AM Mokaba (Executive)  S Montsi  TH Nyasulu
KC Ramon (Executive)  JE Schrempp (German)  TA Wixley   Company Secretary: NL Joubert

March 11, 2008

Mr. H. Roger Schwall
Assistant Director
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C 20549

Dear Mr. Schwall

Sasol Limited Form 20-F for the Year Ended June 30, 2007
Filed November 21, 2007
File No. 1-31615

We refer to the Staff’s comment letter dated 31 January 2008, relating to the Form 20-F of
Sasol Limited (the “Company”) for the year ended 30 June 2007. 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 year ended 30 June 2007.

1.

We note in the “Regional Office: Dubai” section of your website that Sasol Middle East
supplies and serves several countries, including Syria, and the G.D. Portbury Limited,
operating as Sasol Gulf, supplies and serves several regions, including East Africa.
Your filing does not include any specific information regarding business contacts with
Syria or with Sudan, which is located in eastern Africa. Syria and Sudan are countries
identified by the U.S. State Department as state sponsors of terrorism, and are subject
to U.S. economic sanctions and export controls. Please describe to us the nature and
extent of your past, current, and anticipated contacts with Syria or Sudan, if any,
whether through direct or indirect arrangements. Your response should describe in
reasonable detail any products, technology, and services you have provided into those
countries, and any agreements, commercial arrangements, or other contacts with the
governments of those countries or entities controlled by them.

Response
The Company does not have any operations in Syria or the Sudan and is not currently
contemplating investing in operations in these countries.

The Company does not provide, and has not provided, any technology to persons in
Syria or the Sudan, and the Company is not currently contemplating doing so in the
future.

page 2 of 9

The Company does not have any agreements, commercial arrangements, or other
contacts with the governments of Syria or the Sudan, or to our knowledge with entities
controlled by them.

The Company, directly through its affiliates, Sasol Olefins and Surfactants, Sasol
Solvents and Sasol Wax and through its distributors, has sold chemical products to
entities in Syria and the Sudan during fiscal 2007. None of these products were
manufactured in the Company’s United States based operations, nor were any of
these products sold by an entity incorporated in the United States. Total sales to
entities in the Sudan amounted to R136 million for the year ended 30 June 2007.  Total
sales to entities in Syria amounted to R19.4 million for the fiscal year ended 30 June
2007.

The products are generally used in the detergent, personal care and food industries
and in the production of paint and adhesives. These sales consisted of:
•

Esters (Brand name Cosmacol)
This product is used in the pharmaceutical industry to improve the tactility of
creams and the efficiency of sunscreens.

•

Medical grade Poly Ethylene Glycol (Brand name Lipoxol Med)
Pharmaceutical application.  This product is used as a solvent or dilluent to modify
the physical attributes of liquids (like cough syrup) and has limited application as a
laxative.

•

Triglyceride (Brand name Witepsol)
Pharmaceutical application, usually used in suppositories.  This product is a waxy
carrier, with no medicinal attributes of its own.

•

Nonylphenol Ethoxylates
Industrial Detergent and emulsifier.  Also used in textile applications like leather
processing.

•

Alcohols (Carbon length 16 - 18)
Commodity chemical used to produce raw materials for detergents.

•

Paraffin (Brand name Linpar)
Commodity petrochemical.  Very basic molecule with various uses in the
petrochemical industry, amongst others a building block for detergent raw
materials.

•

Gasoil
Oil refinery raffinate stream. This product has energy value and contains
paraffins.

•

Alcohol Based Surfactants (Various brand names)

•

Ketones

•

Acrylates

•

Candle wax
This product is used in the manufacture of candles.

All of these products are commodity-type products which are readily available from
many suppliers in the international market.

page 3 of 9

2.

Please discuss the materiality of any contacts described in response to the foregoing
comment, and whether they would constitute a material investment risk for your
security holders. You should address materiality in quantitative terms, including, for
each referenced country, the approximate dollar amounts of any associated revenues,
assets, and liabilities for the last three years. Please also address materiality 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.

We note, for example, that Arizona and Louisiana have adopted legislation requiring
their state retirement systems to 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. The Missouri
Investment Trust has established an equity fund for the investment of certain state-
held monies that screens out stocks of companies that do business with U.S.-
designated state sponsors of terrorism. The Pennsylvania legislature has adopted a
resolution directing its Legislative Budget and Finance Committee to report annually to
the General Assembly regarding state funds invested in companies that have ties to
terrorist-sponsoring countries. States including California, Connecticut, Maine, New
Jersey, and Oregon have adopted, and other states are considering, legislation
prohibiting the investment of certain state assets in, and/or requiring the divestment of
certain state assets from, companies that do business with Sudan. Your materiality
analysis should address the potential impact of the investor sentiment evidenced by
such actions directed towards companies that have business contacts with Syria and
Sudan.

Response
The Company’s total sales to entities in the Sudan and Syria in fiscal 2007, 2006 and
2005 totalled R121.6 million, R254.2 million and R115.5 million, respectively.

These sales are not considered a material investment risk for our security holders for
several reasons.  In the first place, they represent a negligible percentage of our total
sales (0.12% of total sales of R98,127 million in 2007, 0.31% of total sales of R82,395
million in 2006, and 0.17% of total sales of R69,239 million in 2005).  There are no
assets and liabilities in these countries. Secondly, the products sold are commodity-
type products that are readily available in the international markets and sales thereof in
these countries do not represent a commercial priority for the Company.  Finally, the
Company does not have, nor does it have plans to develop, operations in these
countries.

The Company is generally aware of the legislation adopted by various States in the
United States cited in your letter. The Company believes that due to the relative
insignificance of the Company’s business with Syria and the Sudan, such business will
not be deemed important by a reasonable investor in making an investment decision
and that this legislation will not have a material impact on our reputation or share
value.

page 4 of 9

3.

Expand your discussion throughout this section to discuss fully the causes of material
changes to your financial results. We note the discussion of your results in your 2007
Annual Report posted on your website which contains details not found in the MD&A in
your 20-F. The purpose of this section in the 20-F is to provide management’s
explanation of factors that have affected your financial condition and results of
operations and  management’s assessment of factors and trends which are anticipated
to have a material effect on your financial condition and results of operations in future
periods. Refer to item 5 of Form 20-F. As examples only, we note the following:

•
  We note the discussion of engineering contract costs on page 135 of the 20-F, and

your statement that a shortage of engineering resources is straining the industry
and “may impact our project plans and growth ambitions.” Quantify the impact this
shortage is having, and may have, on your operations, especially in light of the
planned expansions of your synfuels business. We further note the disclosure in
your July 2007 investor newsletter on page 6 that this shortage has affected your
ability to implement major capital projects in line with initial timelines and within
budget, especially in regard to Project Turbo and the third octane train.

•
  In your discussion of the 2007 results of your synfuels business on page 154 of the

Form 20-F, you say that production volume decreased due to maintenance
shutdowns and ‘instability in your support utilities,” which also impacted 2006
results. We note the statement on page 11 in your 2007 Annual Report that
“Interruptions in power supply have become more frequent….” Expand your
discussion in the Form 20-F to state whether this trend is expected to continue
and, if so, its impact across this reporting segment.

•
  In the discussion of your synfuels business in your 2007 Annual Report on page

33, you note your plan to expand production capacity 20% over the next nine
years, adding the equivalent of 30,000 barrels per day to production volumes.
Expand your discussion in the Form 20-F to quantify the impact this potential
project will have on your operations.

•
  In the discussion of your synfuels business in your 2007 Annual Report on page

33, you discuss Project Mafutha, and state that you have earmarked significant
funds for this project. We note your statement that, “Apart from its obvious strategic
importance, we estimate that the plant, the residential area and all its supporting
utilities will add around one percent to the country’s GDP and create thousands of
new jobs.” Expand your discussion in the Form 20-F to quantify the impact this
potential project will have on your operations.

Response
We acknowledge that the Annual Report contains some information which is not
contained in the Form 20-F.  We believe that in the context of the information furnished
in our report on Form 20-F this additional information is not material to the overall
understanding of our business and operations.  We note that the Annual Report by its
own terms cross-references the more detailed information in the Form 20-F, and
indeed the 20-F is by far more complete and detailed.  We will in the future endeavour
to ensure that such discrepancies between the documents are eliminated to every
extent possible.

page 5 of 9

With respect to the examples cited, please note the following

•
  Globally, capital projects are experiencing a shortage in the availability and

competence of engineering resources. We have taken due cognisance of the
findings and predictions as reflected by reports  published in 2006/7 that speak to
the issues of shortage of engineering resources, fabrication capacity globally,
delivery times of major equipment and predictions of schedule and cost increases
on a global basis and built the general trends into our calculations. The reports
referred to have been generated by Cambridge Energy Research Associates

  (CERA) (www.cera.com), IPA (Independent Project Analysis) (www.ipaglobal.com),

  CII (Construction Industry Institute) (www.construction-institute.org) and

  consultants in the field such as the Contax Group (www.contaxgroup.com). The

  following as quoted from CERA, "Large oil and gas production projects worldwide

  are likely to continue to suffer delays owing to an expanding shortfall of qualified

  project engineering resources. Compared with the estimated number of staff

  needed to deliver projects, there could be a potential 10 to 15 percent “people

  deficit” by 2010, according to a new analysis by CERA.  CERA’s conclusion is

  based on a comprehensive analysis of the engineering and project management

  staff needed to deliver the over 400 major projects expected to come on-stream

  over the next five years."

We believe that the risks associated with doing business in South Africa, which
would incorporate the aforementioned factors, are fully disclosed in our 2007 Form
20-F Item 3D: Risk Factors under the caption “There are risks related to countries
in which we operate that could adversely affect our business, operating results,
cash flows and financial condition”. We will endeavour to ensure that where in
future we are able to quantify with a responsible degree of accuracy the impact of
these trends our filings will include the impact thereof.

As far as is practically and realistically possible, we have already built in the
learning obtained from the Project Turbo and 3

rd

 Octene Train projects into the

planned expansions for Synfuels Growth and for the whole of the Natural Gas and
Secunda Growth Programme with the goal of reducing or addressing the potential
problems referred to in the previous paragraph. Indeed we are continually
incorporating our own and others’ learning into our capital project plans and growth
strategies to sufficiently address these trends.

Additionally, we continue to factor in the potential impacts that may be experienced
in South Africa because of capital project developments currently happening within
our transportation, infrastructure and power generation industries.

•
  Power interruptions at our Synfuels plant occurred during 2007 which were related

to both internal equipment failures and external supply risks. Sasol Synfuels is
busy with a major replacement programme of switchgear and control systems as
part of the renewal maintenance expenditure. This will improve the reliability of the
utility systems over the next few years.

page 6 of 9

Management of electricity supply between Synfuels and Eskom, the South African
state owned national electricity supplier, takes place on a continuous basis and no
unplanned interruptions were envisaged at that time.  As is the case with other
industrial companies in South Africa, Synfuels has, however, embarked on an
energy efficiency optimisation process and self-generation projects to reduce
aggregate electricity demand and which will yield an improvement in the medium
term. The placement of orders for open cycle gas turbines has already
commenced. Further opportunities for increased self generated electricity are being
investigated.

Though we do not believe that these power interruptions have materially affected
our operations, we will assess in future reports whether such interruptions are
expected to continue, particularly if they are estimated to have a material impact on
our business.

•    The projected 20 percent volume growth, if realised, would have a significant

impact on the up and downstream part of our value chain. This project consists of
two phases, with approximately 15 percent of the growth expected to come via
natural gas and the remainder from coal based high temperature gasification. The
first gas based phase is currently in the feasibility study stage whilst the coal based
growth is in the pre-feasibility stage. If undertaken, growth