Maputo, Aug. 19, 2025 (Lusa) - Aluminium production at Mozal, Mozambique’s largest industry, rose 13% in one year, fully recovering from post-election instability in the country, when the smelter, the second largest in Africa, acknowledged that it would halt production without an agreement for electricity supply.
Australia’s South32 provided information to the markets about the unit on the outskirts of Maputo, which it owns 63.7% of. Aluminium production for sale increased to 355,000 tonnes in the fiscal year ending in June, and sales grew 8% to 351,000 tonnes.
“The smelter completed its operational recovery plan and operated close to nominal capacity in the quarter ended 30 June 2025, having successfully managed the impacts of [post-election] civil unrest in Mozambique,” reads the same information, consulted by Lusa, which notes that the operation’s continuity remains under review while discussions continue on a new electricity supply agreement.
The Mozambican president said on Monday that the energy tariffs proposed by Mozal would cause the financial collapse of the Cahora Bassa Hydroelectric Plant (HCB), and rejected the threat to close operations at the aluminium smelter in 2026.
“What we are doing at the moment is defending the national interest and the interests of the Mozambican people. We have an added responsibility as a government, and we aim to ensure that tariffs support HCB in continuing to subsidise Mozal while maintaining the viability of HCB, which is our golden goose,” Daniel Chapo told journalists.
With around 5,000 workers on the outskirts of Maputo, Mozal announced on 14 August that it would cut investment and transition contractors, only maintaining operations until March 2026, when the electricity supply contract ends, while it seeks assurances of continuity.
In a statement to the market at the time, South32 said it had been in talks with Mozambique’s government, HCB and South Africa’s Eskom, which buys electricity from HCB and sells it to Mozal - “to guarantee sufficient and affordable electricity supply” to “allow it to operate beyond 31 March 2026, when the current [energy supply] contract expires”.
“The Republic of Mozambique, the Government, and HCB as a company each currently negotiate their energy contracts independently of Mozal. This is the first point. The Republic of Mozambique, through HCB, has a contract with Eskom, which is South African (...) This issue should, in principle, be discussed with Eskom at the South African level,” the Mozambican President clarified.
“We are currently discussing this aspect and in this debate on tariffs, I am certain that a consensus will be reached one day,” added Chapo.
Mozal considers that the commitments made so far will benefit from further reinforcement to ensure the guarantee of having sufficient and affordable electricity beyond 31 March 2026.
“As a result, we will limit investment in Mozal, pausing the coating of vessels and inviting associated contractors to conclude their services this month,” reads the previous statement, which anticipates that the factory will enter “maintenance” at the end of the current contract.
Mozal buys almost half of the energy produced in Mozambique and accounts for an estimated 3% of gross domestic product (GDP).
Mozambique’s government said on 15 July that Mozal’s energy supply remains secure, and it wants the state-owned Electricidade de Moçambique (EDM) to guarantee it.
South Africa’s Eskom supplies electricity to Mozal and, in turn, buys energy from HCB – 66% of the total produced in 2024 – which operates in central Mozambique, while the Mozambican government aims to change this scenario.
Lusa reported on 1 February 2024 that Mozambique’s government intends to repatriate, from 2030 onwards, for domestic use, the electricity it has been exporting from HCB to South Africa since 1979, as stated in the Energy Transition Strategy for Mozambique until 2050.
PVJ/ADB // ADB.
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