UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16
OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
Report on Form 6-K for August 23, 2016
Commission File Number 1-31615
Sasol Limited
1 Sturdee Avenue
Rosebank 2196
South Africa
(Name and address of registrant's principal executive office)
Indicate by check mark whether the registrant files or will
file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F __X__ Form 40-F _____
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Note: Regulation S-T Rule 101(b)(1) only permits the submission
in paper of a Form 6-K if submitted solely to provide an attached
annual report to security holders.
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
Note: Regulation S-T Rule 101(b)(7) only permits the submission
in paper of a Form 6-K if submitted to furnish a report or other
document that the registrant foreign private issuer must furnish
and make public under the laws of the jurisdiction in which the
registrant is incorporated, domiciled or legally organized
(the registrant's "home country"), or under the rules of the home
country exchange on which the registrant's securities are traded,
as long as the report or other document is not a press release,
is not required to be and has not been distributed to the
registrant's security holders, and, if discussing a material
event, has already been the subject of a Form 6-K submission or
other Commission filing on EDGAR.
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing
the information to the Commission pursuant to Rule 12g3-2(b)
under the Securities Exchange Act of 1934.
Yes _____ No __X__
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b):
82-_______________.
Enclosures: Outcome of the Lake Charles Chemicals Project review
Sasol Limited
(Incorporated in the Republic of South Africa)
(Registration number 1979/003231/06)
Sasol Ordinary Share codes: JSE : SOL NYSE : SSL
Sasol Ordinary ISIN codes: ZAE000006896 US8038663006
Sasol BEE Ordinary Share code: JSE : SOLBE1
Sasol BEE Ordinary ISIN code: ZAE000151817
("Sasol" or "the Company")
Outcome of the Lake Charles Chemicals Project review
On 6 June 2016, Sasol announced the preliminary findings of the
detailed review of the Lake Charles Chemical Project (LCCP),
which was initiated in March 2016. The review has been completed,
and involved a verification of the details and quantities of
approximately 60 000 individual line items, based on actual
costs, detailed engineering, benchmarking against other projects
as well as actual field construction productivity factors. These
factors were then combined with the updated execution strategy to
prepare an updated project cost and schedule. An independent
third party review of the estimate has also been carried out.
The LCCP consists of a world-scale 1,5 million ton per year
ethane cracker, and six downstream chemical units - two large
polymers plants (low-density and linear low-density polyethylene)
and an ethylene oxide/ethylene glycol plant, which together will
consume around two thirds of the ethylene produced by the
cracker; and three smaller, higher-value derivative plants, which
will produce specialty alcohols, ethoxylates and other products.
The project is under construction near Lake Charles, Louisiana in
the USA, adjacent to Sasol's existing chemical operations.
The detailed review has confirmed that the total capital cost for
the project is expected to be US$11 billion, which includes site
infrastructure and utility improvements. This is an increase of
$2,1 billion from the original estimate at the time of final
investment decision (FID) in October 2014. This estimate includes
a contingency, which measured against industry norms for this
stage of project completion, we consider being sufficient to
effectively take the project to beneficial operation within the
revised cost estimate. At 30 June 2016, the capital expenditure
to date on LCCP was $4,8 billion, and the overall project
completion was around 50%.
The schedule for LCCP remains the same as communicated on 6 June
2016. The first unit, the linear low-density polyethylene unit,
is expected to achieve beneficial operation in the second half of
calendar year 2018, which will be followed by the ethane cracker
and ethylene oxide and mono ethylene glycol units later that
year, with the low-density polyethylene unit shortly thereafter.
This will result in over 80% of the total output from LCCP
reaching beneficial operation by early 2019. The remaining
derivative units will reach beneficial operation by the second
half of 2019.
An investor fact sheet for the LCCP has been compiled, which
contains more granular information pertaining to the outcome of
the project review as well as updated capital cost, cash flow,
schedule execution, key project assumptions and other relevant
project information. The investor fact sheet is posted under the
LCCP tab in the Investor Centre section of the Sasol website,
www.sasol.com. Please note that any forward looking information
contained in this investor fact sheet has not been reviewed or
reported on by Sasol's external auditors.
The detailed review process has confirmed that the $2,1 billion
capital cost increase is mostly attributable to the following
factors, in an approximately equal proportion:
* a significant increase in site and civil costs due to much
more ground works required to establish the site compared to
what was estimated at FID as a result of poorer than
anticipated subsurface conditions, 50 % more weather day
delays over the site construction period compared to the
average norm, and much lower field productivity resulting
from a conscious decision to proceed with out-of-sequence
site preparation activities while waiting for a variation of
permit conditions to be granted. Site and civil works are
now substantially complete;
* an increase in the home office and construction costs of the
Engineering, Procurement, Construction and Management
Contractor (EPCm) mainly as a result of a increase in
contractor wage rates compared to what were assumed at FID,
lower engineering productivity, and an increase in
contractor engineering hours as a result of the increased
material quantities; and
* an increase in labour costs as a result of higher quantities
of material for installation, the decision to change to a
higher-skilled and thus higher cost crew mix to enable
planned labour productivity improvements for the remainder
of the project, and lump-sum contracts placed at higher
rates than estimated.
Notwithstanding these challenges, various other savings
opportunities have been identified and are being implemented
to mitigate the increase in the overall capital cost estimate.
With the project now over 50% complete, several changes have
been, or are in the process of being, implemented which are
intended to ensure that the project has a good probability of
being completed within the updated capital cost estimate of
$11 billion. Mitigation actions to ensure successful project
delivery, amongst others, include improved productivity and
construction readiness that will be achieved through focused
risk management processes, improved phasing of engineering,
cost-effective mobilisation of resources and synchronised
workface planning; improved change management practices;
and key project leadership personnel changes.
Although unplanned event-driven risks may still impact the
execution and cost of the project, we are confident that the
remaining construction, procurement, execution and business
readiness risks can be managed within the estimate as a
result of these changes.
Even though the expected capital expenditure for LCCP has
increased, we do not expect this to result in the Company
exceeding its self-imposed gearing targets. Details of the
project's updated funding requirements have been included in
the LCCP investor fact sheet. Sasol will be publishing its
2016 financial year results on 12 September 2016, and will
provide an update on the group's gearing levels and funding
plans at that time. The cash savings that have been achieved
from the Company's low oil price Response Plan, and the cost
savings resulting from the Business Performance Enhancement
Programme, are both well ahead of previously communicated
targets.
The expected returns from the LCCP have also been updated,
taking into account our updated oil, natural gas and
petrochemical price forecasts as well as the revised cost
and schedule resulting from the review process. On an
unlevered basis, the returns from LCCP are expected to be
slightly above the Company's US dollar weighted average cost
of capital of 8%, although below the returns expected at the
time of FID in October 2014. We still consider the LCCP to be
a sound strategic investment that will return value to our
shareholders for many years into the future. Key project
assumptions, value contribution development and sensitivities
have been included in the LCCP investor fact sheet.
An impairment review, in conjunction with the preparation of
our annual financial statements, has been completed as a result
of the changes in macro-economic assumptions as well as the
expected increase in the LCCP capital cost estimate. In terms
of International Financial Reporting Standards, the derivative
units are separately tested for impairment. An impairment of
$65 million has been recognised for our 2016 financial year
pertaining to the low-density polyethylene unit.
The Chairman of the Sasol Limited Board of directors,
Dr Mandla Gantsho, said "The Lake Charles Chemicals Project is
an important part of Sasol's prudent growth strategy, and the
substantial increase in the estimated capital cost has been an
issue of concern. The detailed project review was therefore
critical. We have taken decisive action to address the issues
raised and have learned lessons for the benefit of future
projects. This project still represents a world-scale chemicals
facility, based on a sustainable feedstock cost advantage, and
remains a value accretive pillar of our future business."
Sasol will be hosting a conference call at 15:00 South African
time (09:00 Eastern time) on 24 August 2016 to discuss this
announcement, which will be webcast via Sasol's website
www.sasol.com.
23 August 2016
Johannesburg
Sponsor: Deutsche Securities (SA) Proprietary Limited
Disclaimer - Forward-looking statements: Sasol may, in this
document, make certain statements that are not historical
facts and relate to analyses and other information which are
based on forecasts of future results and estimates of amounts
not yet determinable. These statements may also relate to our
future prospects, developments and, business strategies and
industry dynamics including commodity prices. Examples of such
forward-looking statements include, but are not limited to,
statements regarding anticipated capital expenditure, project
completion schedule, availability of funding, impact on gearing
ratio and projected returns of our LCCP project, as well as
commodity prices, exchange rate fluctuations, volume growth,
increases in market share, total shareholder return, executing
our growth projects and cost reductions, including in connection
with our BPEP and RP. Words such as "believe", "anticipate",
"expect", "intend", "seek", "will", "plan", "could", "may",
"endeavour", "target", "forecast", "consider", "project",
"confident" and similar expressions are intended to identify
such forward-looking statements, but are not the exclusive means
of identifying such statements. By their very nature,
forward-looking statements involve inherent risks and
uncertainties, both general and specific, and there are risks
that the predictions, forecasts, projections and other
forward-looking statements will not be achieved. If one or
more of these risks materialise, or should underlying
assumptions prove incorrect, our actual results may differ
materially from those anticipated. You should understand
that a number of important factors could cause actual
results to differ materially from the plans, objectives,
expectations, estimates and intentions expressed in such
forward-looking statements. These factors are discussed more
fully herein and in our most recent annual report on Form
20-F filed on 9 October 2015 and in other filings with the
United States Securities and Exchange Commission. The list
of factors discussed therein is not exhaustive; when relying
on forward-looking statements to make investment decisions,
you should carefully consider both these factors and other
uncertainties and events. Forward-looking statements apply
only as of the date on which they are made, and we do not
undertake any obligation to update or revise any of them,
whether as a result of new information, future events or
otherwise.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant, Sasol Limited, has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Date August 23, 2016 By: /s/ V D Kahla
Name: Vuyo Dominic Kahla
Title: Company Secretary