- NTCSA says new agreement must protect its financial sustainability and South African electricity consumers.
- Current long term supply arrangement expires in March 2026 after more than 20 years.
- Cross border pricing challenges remain as NERSA mechanisms do not apply outside South Africa.
National Transmission Company South Africa has reaffirmed its commitment to concluding a new electricity supply agreement with the Mozal aluminium smelter in Mozambique, while ensuring that the outcome does not place unintended cost burdens on South African electricity consumers.
In a statement issued on Wednesday 17 December 2025, the Eskom Holdings subsidiary confirmed that negotiations are continuing ahead of the expiry of the current long standing supply agreement on 15 March 2026. The existing arrangement has been in place for more than two decades and all parties have long been aware of the need to conclude a replacement contract.
NTCSA said the Mozal smelter requires an electricity tariff significantly below the direct cost of supply in order to remain globally competitive. However, the company cautioned that such pricing is not sustainable under current conditions. South 32, the owners of the facility, has announced plans to mothball the smelter. There are 2500 jobs at stake. Read more
NTCSA chief executive officer Monde Bala said a new approach is required that balances regional industrial development with financial discipline.
“It has become clear that this arrangement is not sustainable for the NTCSA going forward. A mutually beneficial solution developed collaboratively with stakeholders in both Mozambique and South Africa is essential to support regional industrial activity while ensuring our financial sustainability and fairness to South African electricity consumers,” Bala said.
He added that the Negotiated Price Agreements framework administered by the National Energy Regulator of South Africa applies only within South Africa and cannot be extended to cross border electricity supply arrangements.
Despite these constraints, NTCSA said it remains open to reaching an agreement and has consistently communicated an appropriate price range for a new electricity supply contract over the past year.
The company reiterated that protecting households and small businesses from unintended cost impacts remains central to Eskom’s mandate, while continuing to support industrial customers within a lawful and economically sustainable framework.
NTCSA said it will provide further updates as negotiations progress.
Author: Bryan Groenendaal
