Operating profit declined to R815 million from R1 593 million as lower US dollar coal prices and the stronger rand reduced coal export earnings. We increased the coal transfer price between Sasol Mining and Sasol Synfuels in the year to ensure it better reflected cost increases experienced by the industry, as well as to achieve better alignment with current market prices. The increase also helps ensure a fair return on capital expenditure to fund our mine replacement programme, which aims to secure supplies to Sasol Synfuels. The price increase, along with signifi cant gains in productivity and cost savings of almost R200 million, helped us meet our targeted return on investment. As part of the business recovery programme initiated during the economic crisis, our target is to save about R400 million a year in costs by 2012. 

## Converting our mining rights 

A major highlight in 2010 was the conversion, in March, of Sasol Mining’s old-order mining rights to new-order rights by the Department of Mineral Resources. In terms of the requirements of the Mineral and Petroleum Resources Development Act of 2002, this means we have a licence to mine current reserves. The granting of the conversion was based on Sasol Mining’s black economic empowerment strategy which includes – among other things – investment and support for majority-black-women-owned mining group Ixia Coal. Other supporting 

Sasol Mining’s total coal production increased to 42,6 Mt in 2010 from 39,1 Mt in 2009. 

factors were our achievements in employee equity, management diversity and enterprise development. 

In line with the group’s strategic goal of delivering on the South African transformation agenda, in 2009 we concluded a memorandum of understanding with Ixia Coal on the way forward for this start-up company. We expect to conclude the Ixia deal and associated financing in 2011. 

## Developing our people 

We continue to develop our people, spending more on education, implementing new training and retention strategies and launching initiatives to use technology more effectively. Among these are efforts to disseminate shift performance data to miners in good time. This is already bearing fruit, helping to support the increase in productivity achieved. In 2011, we plan to establish an underground training section, offering a more genuine training environment. We are also developing our own simulators of mining production equipment to allow trainees to better measure and improve their productivity. 

Our training initiatives comply with the Empowerment Charter for the South African Mining Industry, and we are pleased to report substantial progress in meeting its many other requirements. Sasol Mining is also actively involved in the work of the mining industry 

development, growth and employment task team. Sustaining coal supply 

Some of our mines are approaching the end of their useful lives and we are developing new mines and shafts to sustain a consistent supply. This is in answer to the group’s strategic goal of nurturing and growing our asset base. During the year, we started construction of Twistdraai Colliery’s new Thubelisha shaft. We also obtained board approval for the construction of the Impomelelo mine, which will replace the ageing Brandspruit Colliery. Construction is due to start in 2011. 

Another important feature of the year was the successful coal blasting and extraction of a 170 000 ton sample of coal for Project Mafutha (a proposed greenfields CTL facility in Limpopo Province). This coal will now be tested in Secunda for its suitability for gasifi cation. We also continued to assist Sasol Synfuels International with potential mining opportunities in China and India. 

