Johannesburg-Sasol said Aug. 18 that it has initiated consultations with various stakeholders ahead of a possible closure of Sasol Nitro’s phosphoric acid operations in Phalaborwa, South Africa. The plant, which manufactures phosphoric acid, has had varying financial success during its history in the Sasol portfolio. Sasol said current feedstock prices are at a level that has rendered the plant’s ongoing operation unsustainable, particularly in a declining phosphoric acid market. On the back of this continued decline of global and local phosphoric acid prices, as well as increased feedstock prices, Sasol Nitro is projecting significant losses for 2009 from its Phalaborwa operations. The possible plant closure will affect 245 Sasol Nitro employees at the plant, and another 250 service provider employees. Sasol has initiated talks with unions, local businesses, and local government to explore options to mitigate the impact of a potential closure. As a priority, Sasol will try to redeploy employees to other Sasol operations where possible. Sasol intends to explore the potential interest of other parties in the Phalaborwa business or assets. Should suitable buyers not be found, the plant may be dismantled and the site rehabilitated. The plant is designed to produce 325,000 tons of phosphoric acid annually, of which 100,000 tons have already been mothballed due to reduced demand. Most of this product is used for the fertilizer industry. South African animal feed producers use de-fluorinated phosphoric acid produced at the plant for the production of animal feed products. It is anticipated that consultations and negotiations with stakeholders will continue through October. If no alternative usage for the plant can be found, operations will terminate at the end of October 2009.
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