Maputo, Aug. 18, 2025 (Lusa) - The Mozambican President has said that the energy tariffs proposed by Mozal, Mozambique's largest industry, would lead to the collapse of the Cahora Bassa Hydroelectric Plant (HCB), rejecting the threat to close the aluminium smelting plant in 2026.
"What we are doing right now is defending the national interest and the interests of the Mozambican people. We can't, we have a greater responsibility as a government, we can't accept tariffs that will lead HCB to subsidise Mozal and collapse HCB, which is our golden goose," Daniel Chapo told journalists after attending the Southern African Development Community (SADC) summit in Madagascar on Sunday.
Mozal, which has around 5,000 workers at the second largest aluminium smelter in Africa, on the outskirts of Maputo, announced on 14 August that it would cut investment and lay off contracted contractors, maintaining the operation only until March 2026, when the electricity supply contract ends, claiming that it had no guarantee of continuity.
In an information to the market, reported by Lusa, the Australian group South32, which leads the unit, said that it has been in dialogue with Mozambique's government, HCB and South Africa's Eskom - which buys electricity from HCB and sells it to Mozal - "to guarantee the supply of sufficient and affordable electricity" to "allow it to operate beyond March 2026, when the current [power supply] contract expires".
"Both the Republic of Mozambique and the government, as well as HCB as a company, have no contract with Mozal. This is the first aspect. The Republic of Mozambique, through HCB, has a contract with Eskom, which is South African (...) If this issue is to be debated, in principle, it should be with Eskom, at the South African level," the Mozambican President also refuted.
"We are currently discussing this aspect and in this debate on tariffs, I'm absolutely sure that one day a consensus will be reached," Chapo added.
For Mozal, the commitments made so far do not guarantee sufficient and affordable electricity beyond March 2026.
"As a result, we will limit investment in Mozal, interrupting the coating of vessels and deactivating the associated contractors as of this month," reads the same previous information, which foresees the plant being placed on a "maintenance" regime at the end of the current contract.
Mozal buys almost half of the energy produced in Mozambique and has an estimated weight of around 3% of the Gross Domestic Product (GDP).
Mozambique's government said on 15 July that the supply of energy to Mozal is not in question, but that it wants it to be guaranteed by the state-owned Electricidade de Moçambique (EDM).
"It's in our interest that Mozal continues to have enough energy (...) It's also in the government's interest that the provider, the one who supplies energy, becomes EDM," said the cabinet spokesman, Inocêncio Impissa, adding: "Today the contracting is done directly and what is intended is to introduce the “player”, which is EDM, which is the entity responsible for commercialising the energy produced by our hydroelectric plant [HCB]. And there are details here that have to be finalised for this to happen."
Mozal's electricity is supplied by South Africa's Eskom, which in turn buys energy from HCB - 66% of the total produced in 2024 - which operates in the centre of Mozambique. Still, Mozambique's government wants to reverse this scenario.
Lusa reported in February 2024 that Mozambique's government intends to repatriate the electricity it has been exporting from HCB to South Africa since 1979 for domestic use from 2030, as stated in the Strategy for Energy Transition in Mozambique until 2050.
The document sets out this objective for 2030: "The main short-term hydro priority is the repatriation of HCB electricity, currently exported to South Africa (8-10 TWh) [TeraWatt-hours], as well as the addition of 2 GW [GigaWatt] of new national hydroelectric capacity by 2031."
PVJ/ADB // ADB.
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