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South32 shuts down Mozambican aluminium smelter Mozal over high electricity cost
South32 shuts down Mozambican aluminium smelter Mozal over high electricity
About this update from South32 Ltd.
South32 Limited (ASX/JSE:S32, ADR:SOUHY) has placed its aluminium smelter in Mozambique on care and maintenance after it failed to secure an affordable electricity tariff, the Australian company announced on March 16 . The firm had been in talks with the government of Mozambique for a lower power charge for its energy-intensive smelter, but since the talks fell through, it, as previously announced, shuttered the factory on March 15 . “Over the past six years, we have engaged extensively with the Government of the Republic of Mozambique , [ South Africa power utility] Eskom and other key stakeholders but were unable to secure sufficient and affordable power supply for Mozal beyond March 2026,” said South32 CEO, Graham Kerr . “While this is not the outcome we wanted, we are proud of the history and significant contribution Mozal has made to the local community and the Mozambican economy in its 25 years of operation.” The smelter, situated near Maputo , Mozambique’s capital, was a key player in the Mozambican economy. In addition to being the country’s biggest electricity user at about 950 megawatts (MW), Mozal accounted for 2% of Mozambique’s output and 20% of its export earnings. It employed 1,100 people directly and up to 5,000 indirectly. Furthermore, Mozal met about 20% of Europe’s aluminium demand. South32 holds 63.7% of Mozal, the Industrial Development Corporation of South Africa Limited holds 32.4%, and the Government of the Republic of Mozambique holds 3.9%. “As previously announced, one-off costs to place Mozal into care and maintenance, including employee separation costs and termination of contracting arrangements, are approximately $60mn (100% basis). Ongoing annual care and maintenance costs are approximately $5mn (100% basis),” South32 added in the release. “The alumina supplied from our Worsley Alumina refinery to Mozal will now be sold to third-party customers at index-linked prices.” © 2026 bne IntelliNews, source Magazine