Sustainable development report 2007 - encouraging black economic empowerment in our south african operations 1/2

Challenges

	Introduction
	Promoting improved safety performance
	Addressing the challenge of climate change
	Responding to the challenge of skills development
	Encouraging black economic empowerment

encouraging black economic empowerment in our south african operations

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"By putting employees, skills development and capacity building at its core, this transaction demonstrates our unwavering commitment to South Africa's socioeconomic transformation, thus also helping us ensure continued success. I am very excited by this transaction as I have no doubt that it will contribute significantly to both Sasol's and South Africa's long-term economic success."

Pat Davies – Sasol chief executive

This year, the share of our Exel and Sasol
convenience centre franchisees who are
black South Africans rose to 49% from 37%.

Our biggest economic challenge in South Africa is to play a successful role in stimulating the advance of the broad-based economic empowerment of historically disadvantaged South Africans, particularly African, Coloured and Indian people. We see this as a strategic economic and business initiative.

To promote our commitment to BEE in South Africa, we operate a BEE coordination office in Johannesburg. This office reports to our chief executive and group executive committee (GEC), and oversees all corporate BEE activities, which have six main components:

•	introducing into our South African businesses equity ownership by historically disadvantaged people;
•	procuring goods and services, preferentially, from historically disadvantaged South Africans;
•	progressing employment equity in our South African businesses;
•	building human capacity and talent in the industry;
•	facilitating the development of smaller BEE enterprises; and
•	advancing social upliftment initiatives.

Announcing South Africa’s largest empowerment deal

In September 2007, Sasol Limited announced South Africa's single largest broad-based black economic empowerment (BEE) ownership transaction to date. If approved by shareholders, the transaction will be implemented in 2008. Entailing a proposed 10% of Sasol Limited's issued share capital, the equity ownership value is approximately R17,9 billion at the closing share price of R285 on 5 September 2007. (While this announcement was made after the end of the 2007 financial year, the preparatory work for the conclusion of this deal was undertaken during the reporting period, and we feel that this initiative warrants particular reference in our sustainable development report.)

A prominent feature of the transaction is that it entails a broad black public share offer, aimed at making as many black South Africans as possible, most of whom have never owned shares before, to become shareholders. In addition to increasing public ownership, almost 27 000 Sasol staff will be allocated shares in terms of a large-scale employee share ownership scheme undertaken in consultation with Sasol's trade unions. Another significant feature of the deal is its strong focus on creating economic capacity and skills development among historically disadvantaged communities within South Africa by choosing suitable BEE partners and by creating a Sasol Foundation.

The BEE transaction will be structured so that a proposed 10% interest in Sasol Limited will be transferred to:

•	the South African black public (3%) - with a particular focus on lower income groups and especially women;
•	selected BEE groups (1,5%) - with consideration given to BEE groups currently involved in Sasol's business (such as unions, customers and suppliers), as well as broad-based BEE groups with a skills development focus (particularly in science and technology), with particular preference to groups active in the vicinity of Sasol's operations in Sasolburg and Secunda;
•	Sasol employees with permanent South African residence - below managerial level comprising 60% black and 40% white employees; and black managers and black non-executive directors (4%); and
•	the Sasol Foundation (1,5%) - this will be created to contribute in a meaningful way to growing South Africa's skills particularly in science and technology, with a particular focus on communities near Sasol's operations in Sasolburg and Secunda, as well as women's groups.

The BEE transaction will be funded through a combination of equity, third-party funding and facilitation by Sasol. In recognition of its proven track record in extending empowerment initiatives to a broad-base of previously disadvantaged South Africans, Sasol is working with the National Empowerment Fund (NEF) to explore ways of reaching as many black South Africans as possible, especially those in the lower income groups.

As a major participant in the South African economy, we welcome the role that Sasol can play in helping to meet the country's socioeconomic objectives as outlined in the government's broadbased BEE policies and the Accelerated and Shared Growth Initiative for South Africa (ASGISA). It is with this in mind that Sasol is structuring its BEE transaction to have a long-term sustainable impact on both Sasol and South Africa, thus helping realise South Africa's full economic potential.

A full-time team of project managers and other specialists have been dedicated to implementing the transaction.

Full details of the BEE transaction will be announced in the first half of 2008 when the transaction will be proposed to Sasol's shareholders. This will include details of the process that qualifying persons should follow to participate in the employee share scheme and the black retail public offer. Black groups will be requested to express their interest in participating in the transaction as selected partners.

This deal complements the other equity ownership transactions at subsidiaries within the group, most notably the sale of 25% of Sasol Oil (Pty) Limited to Tshwarisano LFB Investment (Pty) Limited with effect from 1 July 2006, and the expected finalisation of the first phase of our Sasol Mining empowerment deal with an announcement on a second empowerment transaction made in October this year. This year, the share of our Exel and Sasol convenience centre franchisees who are black South Africans (African, Indian and Coloured) rose to 49% from 37%. In the period ahead, we are on target to allocate 75% of all new service stations to black franchisees.

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