Maputo, Aug. 26, 2025 (Lusa) - Mozal, Mozambique's largest manufacturer, has "suddenly" cancelled contracts with around 20 companies, leaving at least 1,000 unemployed, after announcing the possibility of closing down in 2026, the Confederation of Economic Associations (CTA) revealed on Tuesday.
"This declaration [of the possibility of Mozal closing in 2026] was followed by the sudden cancellation of contracts with around 20 Mozambican companies that supply Mozal, directly affecting around 1,000 jobs and jeopardising the continuity of companies with decades of uninterrupted collaboration with the foundry," said the president of the Confederation of Economic Associations (CTA), Álvaro Massingue.
Mozal, which has around 5,000 workers at the second largest aluminium smelter in Africa, on the outskirts of Maputo, announced in August that it intends to cut investment and lay off contractors, maintaining the operation only until March 2026, when the electricity supply contract ends, claiming that it is unable to continue.
In a statement to the market, the Australian group South32, which leads the unit, said that it has been in dialogue with Mozambique's government, Hidroelétrica de Cahora Bassa (HCB) and South Africa's Eskom - which buys electricity from HCB and sells it to Mozal - "to ensure that there is a sufficient and affordable supply of electricity" to "allow it to operate beyond March 2026, when the current [power supply] contract expires".
At a press conference in Maputo on Tuesday, the Mozambican employers considered it "unacceptable that a company that has benefited so much from the national fiscal, institutional and economic environment should adopt a stance that destabilises the Mozambican business fabric and weakens investor confidence".
The president of the CTA, which brings together the private sector, said that to avoid the closure of this industry's activities, the Confederation believes that the government can consider concessions in the energy tariff, but only with clear and structured counterparts for the national economy.
"This crisis can and must mark a turning point. This is not the time to abandon Mozal," said Massingue.
The impasse between Mozal and the government over the renewal of energy supply contracts remains, with businesspeople asking the government to re-evaluate the company's request, but suggesting that at least 40% of production be allocated to companies based in Mozambique, to transform aluminium locally into semi-manufactured and finished products, boosting industrialisation.
CTA also wants the new agreement to increase the number of local companies providing services to Mozal to increasingly benefit small and medium-sized enterprises, arguing that "decisions on Mozal's future must reflect the interests of the country and its productive sector".
On 22 August, Mozambique's government 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.
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).
On 18 August, the Mozambican President said that the energy tariffs proposed by Mozal, Mozambique's largest industry, would lead to the collapse of HCB, reacting to 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.
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