South32 has announced that operations at Mozal Aluminium, one of Mozambique’s largest industrial facilities, will be suspended from around 15 March 2026, after the company failed to secure a new electricity supply agreement beyond the expiry of the current contract.
In a statement released on Tuesday, the mining and metals group said Mozal would be placed on care and maintenance, following extended negotiations with the Government of Mozambique, Hidroeléctrica de Cahora Bassa (HCB) and South Africa’s Eskom to obtain sufficient and affordable power to keep the smelter operating.
“Despite these efforts, a new electricity supply agreement has not been secured,” South32 said, adding that raw materials required to sustain production beyond March 2026 have therefore not been procured.
South32’s chief executive, Graham Kerr, said the company had repeatedly stressed that Mozal’s continued operation depended on access to competitively priced electricity. “Unfortunately, the parties remained deadlocked on an appropriate electricity price, a situation exacerbated by ongoing drought conditions affecting electricity supply from HCB,” he said.
Kerr noted that the company would now focus on safely transitioning the smelter into care and maintenance. “We understand today’s announcement is difficult for our team at Mozal and we are focused on supporting them through this process,” he said, acknowledging the impact on employees, suppliers, customers, communities and other stakeholders.
Mozal’s production guidance for the 2026 financial year, covering the period up to March, remains unchanged at 240,000 tonnes of aluminium on a South32 share basis.
The company expects one-off costs associated with placing the smelter into care and maintenance — including employee separation payments and the termination of contracting arrangements — to total approximately US$60 million. Ongoing annual care and maintenance costs are estimated at around US$5 million.
South32 also said that alumina supplied from its Worsley Alumina refinery to Mozal will be redirected to third-party customers, with options already secured to sell the material at index-linked prices.
The suspension of Mozal, a major exporter and one of the country’s largest electricity consumers, is expected to have significant economic implications for Mozambique, highlighting the challenges facing energy-intensive industries amid constrained power supply and climate-related pressures.
