Maputo, Oct. 21, 2025 (Lusa) - The management of Australia's South32 says it is continuing to negotiate with Mozambique's government over the continuity of Mozal, an aluminium smelter and the country's largest industry. However, it still expects to suspend activity in March.
"Despite our efforts, negotiations have not progressed in such a way as to generate confidence that Mozal Aluminium will ensure it will have sufficient and affordable electricity supply beyond March 2026," reads a statement sent to the markets today by South32, which owns the plant, adding that "without the necessary electricity supply," it expects to be placed on maintenance after that date.
The Australian company said in the document, to which Lusa has had access, that it continues to "actively collaborate" with Mozambique's government, with the Cahora Bassa Hydroelectric Plant (HCB) and with South Africa's Eskom - which buys electricity from HCB and sells it to Mozal - "to ensure that sufficient and affordable electricity is available" for the smelter, the largest in Africa and which employs around 5,000 workers on the outskirts of Maputo.
The same information to the markets states that Mozal's saleable production increased by 3% to 93,000 tonnes in the third quarter of 2025, compared to the previous quarter, "with the smelter operating close to its maximum technical capacity", before the decision in August "to interrupt the coating of the vat due to the uncertainty of the future supply of electricity" after next March.
The production projection for the 2026 fiscal year remains unchanged at 240,000 tonnes, "based on continuing operations until March 2026, when the current electricity supply contract expires," he added.
"The Mozambique's government is and will naturally continue, firstly, to cherish Mozal and, secondly, it will continue to negotiate to improve the terms of negotiation and that it will continue to produce in Mozambique, with all the necessary facilities, but that there will be no harm to either party," said the spokesman for the Prime Minister's Cabinet, Inocêncio Impissa, at the end of August.
He added that Mozambique's government is informed of the risks associated with the crisis in Mozambique's largest industry and of the cancellation of contracts by some of Mozal's suppliers, but clarifies that the situation has nothing to do with the ongoing negotiations.
Mozal announced in August that it intended to cut investment and lay off contracted contractors, keeping the operation going until March, claiming it was unable to continue. A few days later, Mozambique's Confederation of Economic Associations (CTA) revealed that Mozal had "suddenly" cancelled contracts with around 20 companies, leaving at least a thousand unemployed.
On 22 August, Mozambique's government considered the tax contribution of its largest industry to be extremely low and expressed interest in proceeding with a review of its obligations in this area.
Mozal accounts for almost half of the energy produced in Mozambique and is estimated to contribute at least 3% to 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, in response to the threat of the aluminium smelting plant's closure 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.
PVJ/ADB // ADB.
Lusa
