- Mozal aluminium smelter in Mozambique to be placed on care and maintenance from March 2026 after failure to secure a new electricity supply agreement.
- One off costs estimated at US$60 million as drought pressures hydroelectric power availability.
- South32 to redirect alumina supply to third party customers as production winds down.
Australia based mining group South32 has announced plans to place the Mozal aluminium smelter in Mozambique under care and maintenance from mid-March 2026, following prolonged and unsuccessful negotiations to secure an affordable and reliable electricity supply.
The facility directly employs around 2,500 people, with a significant multiplier effect creating up to 5000,000 additional jobs through contractors and related services.
The decision follows the expiry of the current power supply agreement in March 2026 and ongoing deadlock with the Government of Mozambique, Hidroeléctrica de Cahora Bassa and South African utility Eskom over electricity pricing. Drought conditions affecting hydroelectric generation have further complicated negotiations.
South32 confirmed that Mozal will be placed on care and maintenance on or around 15 March 2026. As a result, the company has not procured raw materials required to sustain operations beyond that date.
Chief Executive Officer Graham Kerr said the smelter’s continued operation depended on securing electricity at a price that would allow Mozal to remain internationally competitive.
“Despite extensive engagement, the parties remained deadlocked on an appropriate electricity price, a situation worsened by ongoing drought conditions impacting power supply from Hidroeléctrica de Cahora Bassa,” Kerr said. “Our focus now is on safely transitioning the smelter to care and maintenance from March 2026.”
South32 said it would work closely with employees, suppliers, customers and local communities to manage the transition. Mozal’s production guidance for the 2026 financial year to March remains unchanged at 240 kilotonnes on a South32 share basis.
The company expects one off costs of approximately US$60 million to place the smelter into care and maintenance, including employee separation and contract termination costs. Ongoing annual care and maintenance costs are estimated at around US$5 million.
Alumina previously supplied from South32’s Worsley Alumina refinery to Mozal will be sold to third party customers, with index linked pricing options already secured.
Mozal, in which South32 holds a 63.7 percent stake, accounted for just over 29 percent of the group’s aluminium production in the 2025 financial year. The company has already flagged a US$372 million impairment related to the smelter in its 2025 results, reflecting the anticipated shutdown.
Author: Bryan Groenendaal
