Sasol made the much anticipated announcement yesterday that they were proceeding with the ethane cracker, see the official media release: Sasol announces final investment decision on world-scale ethane cracker and derivatives complex in Louisiana. There you go. An investment of a whopping 8.1 billion Dollars. At the current exchange rate (10.945 Rand to USD) it is 88.65 billion Rand, around 24.7 percent of the entire market cap of the existing business, as the market values it currently. This is huge. And of course, a decision will be taken in due course on the GTL plant, that is still a long way off, for now this is the news to focus on.
Time frames? 4 years!! It takes a long time to build something of this size and scale, it really does and we should continue to receive updates on the project as it proceeds, during the time the project will suck a lot of cash. The first release around December 2012 suggested that the cracker project costs would be around 5-7 billion Dollars and be operational by the 2017 calendar year, obviously the delays were as a result of a little more planning, nothing too much in terms of size and scale.
In other news related to Sasol, the IDC, who own 53 266 887 shares of the company, nearly 29.5 billion Rand worth of one of the largest companies listed here are said to be shopping the business around. A Bloomberg story titled South Africa to Assess Selling IDC Stakes in Listed Stocks. Wow. Would you, if you had the opportunity, sell Sasol and buy Eskom? Not me, sorry. However, when strapped for cash, the options narrow.