South32 Suspends Mozal Aluminium Smelter After Power Deal Collapse

Australian mining company South32 announced on March 16 that it has placed its Mozal aluminium smelter in Mozambique under maintenance after its electricity supply contract expired and renewal negotiations failed. The company had signalled this outcome in recent months, warning that operations could not continue without a new agreement. Mozal remains one of Mozambique’s most significant industrial assets, employing around 2,500 workers.

Mozal Aluminium, Africa’s second-largest aluminium smelter after the Hillside facility in South Africa, depends on electricity supplied by state-owned Hidroeléctrica de Cahora Bassa (HCB). However, negotiations on a new supply agreement stalled as the contract approached expiry. South32 cited disagreements over electricity tariffs as the main obstacle to reaching a deal, prompting the company to halt operations once the contract lapsed.

Energy Constraints and Economic Impact

Aluminium smelting is among the most energy-intensive industrial processes and requires a stable, long-term power supply to remain viable. Without access to affordable and reliable electricity, continued operations become difficult to sustain.

“Over the past six years, we have held in-depth discussions with the Government of Mozambique, Eskom, and other key stakeholders, but we have been unable to secure a sufficient and affordable electricity supply for Mozal beyond March 2026,” said South32 Chief Executive Officer Graham Kerr.

The suspension removes one of South32’s key assets and a major contributor to Mozambique’s economy. In 2024, Mozal employed more than 2,500 people and generated economic activity equivalent to around 4% of the country’s GDP.

For now, neither South32 nor Mozambican authorities have indicated whether negotiations could resume, leaving the future of the smelter—and its broader economic impact—uncertain.