Africa’s second-largest aluminium smelter may halt operations in March after owner South32 Ltd. failed to secure a new electricity supply deal before its current agreement expires.
Africa’s second-largest aluminium smelter may halt operations in March after owner South32 Ltd. failed to secure a new electricity supply deal before its current agreement expires.
South32 said the Mozal plant, located just outside Mozambique’s capital Maputo, would become unviable under a proposed new tariff set to replace its existing rate early next year.
Rob Jackson, South32’s vice president of supply, said negotiations are deadlocked, and the most likely scenario is for Mozal to continue operating until the current electricity supply agreement expires, after which it would be placed on care and maintenance in March 2026.
A shutdown would jeopardise the jobs of 2,500 workers and contractors in a country already grappling with high youth unemployment, Bloomberg reported.
Aluminium was Mozambique’s third-largest export last year, earning $1.1 billion, all from Mozal. South32 has already booked a $372 million write-down linked to the possible closure. Shares fell 6.3% on the Johannesburg Stock Exchange by late afternoon Thursday.
If Mozal closes, roughly 950 megawatts of power could be freed up.
Continue reading with Eandel
Subscribe to unlock the complete story and receive your subscriber benefits.
