Maputo, Aug. 22, 2025 (Lusa) - Mozambique's government on Friday considered the tax contribution of Mozal, Mozambique's largest industry, to be "extremely low", expressing an interest in moving forward with a review of its obligations in this area.
'As a result of the timing of the contract with Mozal (...) although this industrial unit contributes around 3.2% of GDP, it represents less than 0.2% of the state's tax revenues,' said Mozambican government spokesman Inocêncio Impissa at a press conference in Porto.
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 intends to cut investment and lay off contracted contractors, maintaining the operation only until March 2026, when the electricity supply contract ends, claiming it has 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, the Cahora Bassa Hydroelectric Plant (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 [energy supply] contract expires".
Speaking to journalists, Impissa acknowledged that a possible paralysis of this company's activities would have negative impacts on the country, which is why he called for progress in negotiations with this industry.
The government spokesman referred to "the need to re-evaluate the terms of the tax package applied as well as other benefits for Mozambique, without prejudice to the profits that Mozal and any other company legally deserve for their work".
Mozal buys almost half of the energy produced in Mozambique and has an estimated weight of at least 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).
Today, Impissa clarified that HCB can only supply Mozal with up to 350 megawatts of the 950 it needs from 2026, citing that HCB has low storage levels due to the drought in the region, jeopardising energy production.
"Eskom of South Africa could supply the remaining 600 megawatts, and it is Mozal's responsibility to take steps to achieve this. It should be noted that if HCB were to sell the energy to Mozal at the proposed cost, Mozambique would incur a huge financial loss, as it would be far below the costs of producing and transporting this energy service," he said.
"Mozambique said it will supply 350 megawatts from HCB to Mozal at the minimum price that allows it to cover the costs mentioned above (...) including the adjustment planned for 2028," Impissa added.
On Monday, the Mozambican President said that the energy tariffs proposed by Mozal, Mozambique's largest industry, would lead to the collapse of HCB, rejecting the threat of closure of the aluminium smelting plant in 2026.
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.
PME/ADB // ADB.
Lusa
