(Amongst 1.4 million children across the world who did a FridaysForFuture protest on May 24, KwaZulu-Natal kids were out in an unusual space, in all Durban’s diversity and creativity. In my 15 years witnessing protests in this city, this had the most accurate representivity of the city in race, class, gender and generational terms. Though there were only 100+ or so, the activists linked up environment, social justice and economic muscle.

Their targets were the most irresponsible financiers of fossil fuels in a part of Durban – uMhlanga, as Sandton is to Joburg – that normally escapes protester attention due to the bourgeoisie’s strategic distancing from the masses. Those who came with fire in their hearts included a couple of kombi loads from the South Durban Community Environmental Alliance and Ubunye bamaHostela, after they had joined 1000 protesters demanding the resignation of the corrupt mayor in central Durban that morning.

The uMhlanga central business district is an uncreative grid of lego block buildings close to Africa’s second-largest shopping mall (“Gateway Shopping Theatre”), a site where white capital fled once Durban’s main CBD deracialised in the mid-1990s. But late afternoon on Friday, those barren streets resonated with the chant, “Don’t be a gasshole, don’t frack with me!” and reappropriated liberation war songs. Perhaps the best experience was an Allan Gray investment representative have to grimly listen for 20 minutes, as a township activist read out a sophisticated critique of her firm’s massive investment in Sasol. Her grimace also reflected a capitalist embarrasment: over the prior 48 hours, Sasol – in which Allan Gray is the #2 investor – had dumped 13% of its share value due to its Louisiana idiocy: a $12,9 billion mega-project white elephant mistake.

Long known as a major carbon criminal, Sasol still can brag that its Secunda site – for squeezing Mpumalanga coal and Mozambique gas in to petrol – is the single worst hot-spot – point source – for CO2 emissions in the world. In just five years, 2016-2020, the firm anticipates that it will emit 300megatons of greenhouse gases. SDCEA’s been battling Sasol for years. Divestment is the very least of the punishments it

Northglen News

Published on May 24, 2019

Protestors marched to create awareness about climate chance and biodiversity loss before handing over a memorandum to various stakeholders.





Peaceful march set to take place on uMhlanga promenade

Organisers say the youth of Durban are concerned about losses to biodiversity and weather extremes increasing in both frequency and intensity.

18 hours ago

Youngsters, JJ Niemand, Noah and Leah Harding took part in a similar march earlier this year where young children, parents and youth gathered outside Wilson’s Wharf  before marching to the Durban City Hall to hand over a mandate to the Department of Energy and the Department of Mineral Resources.

FROM 1.30pm today to 5pm hundreds of young people from around Durban are expected to take to the uMhlanga promenade to take part in a peaceful placard demonstration.

The Youth March Against Unlawful Endangerment aims to ensure that the youth march and hand over memoranda to SASOL shareholders; Allan Gray Investment Counsel, Old Mutual Limited and Investec Asset Management.

On their Facebook page, organisers of the march said: “We are marching against oil corporations’ intent on drilling our ocean and land. Their business models pose a threat to the Paris Agreement climate goals of limiting global warming to well below 2°C, to prevent a catastrophic and irreversible climate change. We, the youth of Durban, are concerned about losses to biodiversity and weather extremes increasing in both frequency and intensity. Drought, extreme heat and flooding are occurring more often and it is expected that hurricanes will get stronger. These impacts pose a substantial risk to the vulnerable and poor.”

“We call on ENI and Sasol to cease all operations that ultimately produce green house gas emissions in RSA, thereby drastically reducing South Africa’s use of fossil fuels to follow the global emission reduction pathway of the Intergovernmental Panel on Climate Change,” said organisers.

The march forms part of #FridaysforFuture youth marches which have been gaining momentum around the world and are now backed by teachers and academics.

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Sasol’s latest cost overrun is reckless, say investors

As recently as February, Sasol warned that the project had risen to $11.8bn just four months after telling investors that it was on track to cost $11.13bn


23 May 2019 – 05:10 Lisa Steyn, Giulietta Talevi and Warren Thompson

Sasol joint CEO Bongani Nqwababa. Picture: MARTIN RHODES

Another cost blowout at Sasol’s ambitious Lake Charles Chemicals Project of more than $1.1bn (R15.8bn) — in just three months — has sparked investor fury over management’s “reckless” use of shareholder funds.

The shock news hit the market on Wednesday when Sasol announced that the huge Louisiana chemicals project would cost between $12.6bn and $12.9bn, almost 45% higher than its initial estimate of $8.9bn at the time the investment was announced in 2014.

In response, Sasol’s share price plunged as much as 15%, wiping about R35bn off its market capitalisation — the biggest fall in 20 years. The stock closed 12.9% down at R375.

As recently as February, Sasol warned that the costs had risen to $11.8bn just four months after telling investors it was on track to cost $11.13bn.

“Correct me if I’m wrong, but this overrun hasn’t been anything but reckless mismanagement of shareholders’ capital,” said Standard Bank analyst Adrian Hammond on a conference call with Sasol management. In response, joint CEO Bongani Nqwababa said: “It’s important to look at the long term because we are confident the fundamentals are robust.”

Once on line Lake Charles will convert gas into chemical products and was viewed as a “game changer” for the company as it will triple the volume of chemicals that Sasol produces in the US. Essentially, the 69-year-old company, which began life using synthetic fuels technologies, will become a mainly chemicals business, like US group DuPont.

But, said Visio Capital director Patrice Moyal, “the implication is that Sasol has invested approximately 75% of its market capitalisation in its largest offshore investment with a clear lack of controls”.

Abdul Davids, portfolio manager at Kagiso Asset Management, said he found the news shocking. “It’s unnerving that it is so late in the day, the project is 96% done, to now suddenly find out you need to spend over $1bn is alarming.”

While Sasol’s joint CEOs Nqwababa and Stephen Cornell have taken responsibility for the debacle, Davids said “there should be repercussions, but it’s probably more for the board
to decide”.

Sasol has already made changes to its management team at Lake Charles, which now falls under its executive vice-president of chemicals, Fleetwood Grobler, who said they were “extremely disappointed” in the cost increase.

Moyal was highly critical that the cost overruns related to “basic issues” such as accounting duplications ($230m), forecast improvements not being realised, defective work from contractors, further weather contingencies and lower productivity. “We are particularly concerned that management and board remuneration has been inversely correlated to the delivery of shareholder value creation,” he said.

In light of the increase in capital costs and the latest market pricing outlook, Sasol said the forecast internal rate of return for the project had declined from 7.5% to 6%-6.5%, where the cost of capital was now over 8%.

The cost increase will shave $300m off Sasol’s expected earnings for the 2022 financial year, now set at $1bn.

It has prompted Sasol to double the amount of assets it has earmarked for sale to $2bn in order to help its cash position, although Grobler said “we do have the balance sheet strength to absorb this capital increase”.

However, he said, “if we do not get the value we will not proceed” with any asset sales.


Sasol shares dive after revised costs

A further $1 billion (R14.4bn) will be needed for the completion of its ambitious Lake Charles Chemicals Project

PETROCHEMICAL giant Sasol had its biggest one-day drop on the JSE in more than 20 years after it once again revised the cost of its ambitious Lake Charles Chemicals Project (LCCP) by a further $1 billion (R14.4bn).

Reuters SASOL stock plunged 12.99 percent to close at R375 on the JSE yesterday, the biggest plunge since October 1, 1998.

The news saw the group’s stock drop by 12.99 percent to close at R375, the biggest plunge since October 1, 1998.

In February Sasol had said it expected the project to cost between $11.6bn to $11.8bn, but yesterday revised the figure to $12.9bn. The mega project had an initial price tag of $8.9bn at the time the final investment decision was made in 2014, taking the total cost overruns over the years to $4bn. Sasol said the increase in the LCCP’s cost did not alter the group’s capital allocation strategy.

“This increase in the anticipated LCCP capital costs is extremely disappointing. Executive management has implemented several changes since February 2019 to further strengthen the oversight, leadership for the project and frequency of reporting,” Sasol said.

“Actions include segregation of duties between project controls and finance functions and assigning a senior vice president to have responsibility for the LCCP project controls.”

Sasol said it would now accelerate its $2bn non-core asset disposal programme and use the proceeds to deleverage its balance sheet. The company, however, did not disclose which assets it will sell.

Shareholder activist Theo Botha said there was not enough accountability on how the project was implemented. “Sasol market cap is R269bn. The total project cost at say $13.5bn will be R193bn. Sasol is betting the farm on this project,” Botha said.

The Louisiana-based LCCP consists of a 1.5 million-ton-per-year ethane cracker, and six downstream chemical units and is currently under construction near Lake Charles, adjacent to Sasol’s existing chemical operations.

The project was expected to contribute more than 70 percent to Sasol’s overall revenue once it is fully commissioned. Sasol said the LCCP, which has also endured numerous delays, was close to completion. The group said overall project completion was at 96 percent as of March, with construction completion at 89 percent.

Asief Mohamed, chief investment officer of Aeon Asset Management, said the LCCP’s cost overruns were unprecedented and showed poor project management. “The company’s executive and non-executive directors should take full responsibility for the cost overruns. They are doing as bad a job as was done by Eskom in building Medupi and Kusile. The role of the consultants the company has employed in the project must also come under scrutiny,” Mohamed said.

Sasol said that its review of the costs and schedule of the project had revealed weaknesses in the project’s integrated controls which it was fixing.

“The board has also commissioned a review to be conducted by independent external experts,” the group said.

“This review will cover the circumstances that may have delayed the prompt identification and reporting of the above-mentioned matters. Upon conclusion of the review the board will take appropriate action.”



Sasol: What’s a billion between friends?

By Sasha Planting• 23 May 2019

Signs that costs were starting to overrun the budget began to emerge in January. In February, Sasol’s leadership took immediate and decisive action to correct the problem. However, news of the latest cost overrun saw the share price drop 13%. Management’s credibility is at stake. Can it recover?

Sasol’s multibillion-dollar Lake Charles Chemical Project (LCCP) in Louisiana, United States, is easily the biggest project ever undertaken by a South African company off-shore. And in Louisiana it is the largest single manufacturing investment in the history of the state, dwarfing those of the 500 companies from 50 countries that have been drawn by the abundance of liquefied natural gas in the region.

Announced in 2012 and given the green light in 2014, the petrochemical complex, which includes an ethane cracker that will produce 1.5 million tons of ethylene annually, and six chemical manufacturing plants, was projected to cost $8.3-billion and come on stream in 2018.

The complex is now expected to cost Sasol 60% more, at somewhere between $12.6-billion and $12.9-billion, which includes a contingency of $300-million. This is about $1-billion more than was projected in February when joint CEOs Stephen Cornell and Bongani Nqwababa insisted that they had provided for everything to complete the project.

Even this figure had drifted from the “worst-case scenario” of $11-billion, projected in August 2016.

In March 2019, the overall project completion was at 96%, with construction completion at 89%. With so much complete, what went wrong?

In January, an independent market report suggested that the project would overrun its budget. In February, Sasol moved responsibility for the LCCP to its executive vice president of chemicals, Fleetwood Grobler, a Sasol long-timer known as Mr Fix-it, with the previous head taking early retirement.

Grobler’s team initiated a full review of the costs and build schedule which showed that while the project was largely on schedule with three units already operating, the ethane cracker coming online in July 2019 and the last unit coming on stream in February 2020, the cost assumptions were just plain wrong.

“I want to say how disappointed we are to be talking to you about a further increase to the capital costs.”

With these words, joint-CEO Nqwababa began the conference call where he and Cornell spelt out the reasons for the cost overrun and what they were doing about it.

“We duplicated certain allowances from the Louisiana government in the previous budget,” he said. In addition, “not all contracts and orders were reflected in the February cost estimate and anticipated performance improvements did not materialise”.

This accounted for some $530-million additional expenditure.

Another $470-million was needed to complete the project. This includes work to correct previously identified defective carbon steel forgings and the replacement of parts of heat exchangers due to corrosion.

Last, another $260-million had to be budgeted because the review identified a significant increase in required finishing activities such as heat tracing, insulation and fireproofing, Sasol said.

And then there is the $300-million contingency.

Nqwababa assured investors that the underlying drivers of the additional costs are understood and known. “The board and team is focused on ensuring that no stone is left unturned to ensure we use this experience to make sure Sasol is even stronger. We will ensure that all lessons are learnt and appropriate actions taken.”

The market did not take well to the update, with the Sasol share price falling about 13% on the day to R375.00.

Sasol’s share price is discounting any value from the Lake Charles project

Source: Sharenet “Is anyone going to take responsibility? It doesn’t look like it,” says Karl Gevers, head of research at Benguela Asset Management.

“The biggest issue here is the already fragile perception of management quality — they don’t seem to have their finger on the pulse.”

“There are no guarantees in investing and I will have to take responsibility for my decisions. But, the incompetence of Sasol management has cost my investors money,” says Mark Ansley, a portfolio manager with Argon Asset Management.

“The question is, how much of a black hole is this? We like the valuation of the old Sasol business. And I do think there is value in the cracker. But do you want to rush in and buy more Sasol with all this uncertainty? After all, what upside can we see in a year?”

While management insisted that the increase in the LCCP’s cost will not alter Sasol’s capital allocation strategy, it complicates management’s stated ambition to reduce debt.

“The increased capital cost will result in the gearing level for Sasol remaining elevated for 18 to 24 months,” the company said in a statement.

The company has taken steps to conserve cash. Among these is the acceleration of its non-core asset disposal programme, previously announced.

Assets with an aggregate net asset value of $2-billion will be sold. Whether these will include some South African assets has not been disclosed.

More bad news was that the anticipated contribution from the LCCP has been negatively impacted by a change in the short- to medium-term pricing outlook. As a result, the earnings before interest, tax, depreciation and amortisation (Ebitda) for financial year 2022 of $1.3-billion have been revised to about $1-billion.

The long-term market pricing outlook is more favourable and supports Sasol’s projected Ebitda contribution from the LCCP of $1.3-billion, Nqwababa says.

“LCCP has been a huge drag on Sasol returns over the past five years. The business has geared up significantly to fund the project, increasing the financial risk while returns have declined significantly,” says Gevers.

The latest statement is that internal returns on the project are now expected at between 6%-6.5%, down from 7.5% previously.

Similarly, earnings guidance has continuously deteriorated, from the $1.38-billion to $1.48-billion range in 2016, to $1.3-billion to $1.4-billion in 2017, and in 2018 it was reduced to the $1.25-billion to $1.35-billion range, says Gevers. The latest update reduced the 2022 Ebitda expectation to $1-billion from $1.3-billion. “I don’t think many investors will trust the management team after this. Even this guidance will be taken with a pinch of salt.”

While the present management has had the task of completing the project, it is worth noting that the LCCP investment decision was driven by the previous CEO, David Constable. At the time (October 2014), he said:

“The economic benefits of this project will extend to all of our shareholders, 67% of whom are located in South Africa, and will also enable us to pursue further growth opportunities in southern Africa. In addition, this project will deliver significant benefits to the state of Louisiana and the United States. More specifically, it will enhance local investment and job creation in the surrounding communities, while strengthening downstream manufacturing and increasing exports.”

At this point it appears that the only beneficiary of the project is the state of Louisiana and surrounding communities, at the cost of shareholders. DM


Latest global school climate strikes expected to beat turnout record

Organisers say more than 1.4 million young people are set to protest about the climate crisis

Matthew Taylor

The Guardian

Fri 24 May 2019

Hundreds of thousands of children and young people are walking out of lessons around the world on Friday as the school strike movement continues to snowball.

Climate strikes were planned in more than 1,400 cities in more than 110 countries. Organisers say the number of young people taking part is set to top the 1.4 million people who participated in the global day of strikes in March.

The global campaign – inspired by Swedish teenager Greta Thunberg – comes amid increasing concern about the unfolding climate crisis, especially among young people.

Last year, the UN’s leading scientists warned that there were just 12 years to limit climate catastrophe. Earlier this month, another UN report warned that the widespread collapse of ecosystems was putting humanity itself at risk. And just last week it emerged that the Antarctic ice is melting much faster than previously feared and global atmospheric CO2 emissions reached a record level of 415ppm.

The school strike movement started in August when Thunberg, then 15, held a solo protest outside the Swedish parliament.

Since then hundreds of thousands of schoolchildren have taken part in strikes each week around the world from Australia to Canada, Ghana to Germany.

In the UK, more than 100 school climate demonstrations have been planned and organisers say they will focus on the need for radical reform of the education system to address the ecological crisis.

Noga Levy-Rapoport, of the UK Student Climate Network which helped organise the events, said climate breakdown posed “a grave threat to life on Earth”.

“In order to properly address the crisis, we need our educational institutions to be hubs of sustainability that provide a space for learning and teaching to prepare today’s students to not only be those that lead a just transition, but to prepare for a changing world,” she said.

Last month UK youth strikers and Thunberg met Westminster party leaders to highlight the scale and scope of the unfolding crisis.

They have now written an open letter to the UK’s trade union movement asking it to get behind a transformative green new deal and support the climate strikes. In a piece in Friday’s Guardian, Thunberg and other strikers from around the world call on adults to join them in a general strike in September.

Bhavreen Malhotra Kandhari, a school pupil who is due to take part in strikes in India, said: “We have learned that if we don’t start acting for our future, nobody else will make the first move. Once again our voices will be heard on the streets, but this is not just up to us.”

In Australia Eloise Kieler, a school striker from Sydney, said she felt she had no choice but to walk out of lessons.

“Despite watching the climate crisis unfold, despite knowing the facts, politicians don’t act, the fossil fuel industry keeps making huge profits,” she said.

“This is our future: so we will walk out of school, quit our college lessons, and take to the streets to say enough is enough. Wouldn’t you go on strike too, if you thought doing so could help protect your own future?”


Friday, May 24, 2019


The Guardian

We’re Stepping Up—Join Us For a Day to Halt This Climate Crisis

We’re calling for a global strike on 20 September. Disrupting our normal lives is the only way to secure our future


Naomi Klein, Nnimmo Bassey, Bill McKibben

On 20 September, at the request of the young people who have been staging school strikes around the world, we’re walking out of our workplaces and homes to spend the day demanding action on the climate crisis, the greatest existential threat that all of us face. It’s a one-day climate strike, if you will – and it will not be the last. This is going to be the beginning of a week of action all over the world. And we hope to make it a turning point in history.

We hope to make it a turning point in history.

We hope others will join us: that people will leave their offices, their farms, their factories; that candidates will step off the campaign trail and football stars will leave the pitch; that movie actors will scrub off their makeup and teachers lay down their chalk; that cooks will close their restaurants and bring meals to protests; that pensioners too will break their daily routines and join together in sending the one message our leaders must hear: day by day, a business as usual approach is destroying the chance for a healthy, safe future on our planet.

We are well aware that, by itself, this strike and a week of international climate action won’t change the course of events. The good news is that we have the technologies we need – the price of a solar panel has plunged 90% in the past decade. And we know the policies to make them work: all across the planet some version of a Green New Deal has been proposed, laws that would speedily replace fossil fuels with the power of sun and wind, along the way providing good jobs and stabilising strong local economies. We salute the people – many of them young – working hard to pass those measures against the entrenched opposition of the fossil fuel industry.

The September day of global action is designed to support those people. We hope all kinds of environmental, public health, social justice and development groups will join in, but our greatest hope is simply to show that those working on this crisis have the backing of millions of human beings who harbour a growing dread about our environmental plight but who have so far stayed mostly on the sidelines. It may take a few attempts to get those kind of numbers in the streets, but we don’t have too long: our window for effective climate action is closing fast.

We know not everyone can join us. On a grossly unequal planet, some people literally can’t do without a single day’s pay, or they work for bosses who would fire them if they dared try. And some jobs simply can’t stop: emergency room doctors should keep at their tasks. But many of us can put off for 24 hours our usual day to day routine, confident it will be there when we return. We hope some people will spend the day in protest: against new pipelines, or the banks that fund them; against the oil companies and the politicians that spread their lies. We hope others will spend the day putting insulation in the walls of their neighbours’ homes, or building cycle paths. We hope everyone will take at least a few minutes in a city park or a farm field or on the roof of their apartment to simply soak in the beauty of the world it’s our privilege to protect.

Obviously this is a lot to ask. A day in the life of the world is a big deal, and all of us are used to our routines. But we’re not comfortable letting schoolchildren carry all the weight here – they need our backing. And disrupting our normal lives seems key – it’s normal life that is doing us in, the fact that we rise each morning and do pretty much the same things we did the day before, even amid an unfolding crisis.

We are the people who happen to be alive at the moment when our choices will determine the future for tens of thousands of years: how high the seas will rise, how far the deserts will spread, how fast the forests will burn. Part of our work must be to protect that future.

Margaret Atwood, Geneviève Azam, Tom Ballard, Fadel Barro, Nnimmo Bassey, May Boeve, Patrick Bond, Mike Brune, Nicola Bullard, Sharan Burrow, Valérie Cabanes, Rachel Carmona, Dr Craig Challen, Noam Chomsky, Maxime Combes, Thomas Coutrot, Cyril Dion, Tasneem Essop, Christiana Figueres, Prof Tim Flannery, Nancy Fraser, KC Golden, Tom BK Goldtooth, Maggie Gyllenhaal, Dr John Hewson, John Holloway, Prof Lesley Hughes, Tomás Insua, Satvir Kaur, Barbara Kingsolver, Winona LaDuke, Jenni Laiti, Bruno Latour, Annie Leonard, Michael Mann, Gina McCarthy, Heather McGhee, Luca Mercalli, Moema Miranda, Jennifer Morgan, Tadzio Müller, Kumi Naidoo, Mohamed Nasheed, Carlo Petrini, Dr Anne Poelina, Mark Ruffalo, Peter Sarsgaard, Dr Vandana Shiva, Rebecca Solnit, Gus Speth, Prof Will Steffen, Tom Steyer, Chris Taylor, Terry Tempest-Williams, Aurélie Trouvé, Farhana Yamin, Lennox Yearwood are signatories to this article