Mozambique: South32 Recorded Costs of 117 Million Dollars As Result of Mozal Shutdown

Maputo — The Australian mining firm South32 has recorded extraordinary costs of 117 million US dollars as a result of the operational shutdown of its Mozambican affiliate Mozal aluminium smelter, which was the country's largest industrial facility.

Mozal has been paralyzed since last March due to a dispute between the Mozambican government and the South32. The parts did not reach any agreement regarding electricity prices.

South32 says it cannot continue aluminium production at the current cost of electricity, which, as for any aluminium smelter, is the main input. The two billion US dollar facility requires around 950MW of power.

Mozal's shareholder structure consists of South32 (63.7 percent), South Africa's Industrial Development Corporation (32.48 percent) and the Mozambican government (3.9 percent).

Mozal accounts for around three percent of Mozambique's Gross Domestic Product (GDP) and was Mozambique's single largest industrial private employer, providing over 20,000 jobs over the past 25 years.

According to South32 quarterly report, production fell by 30 percent and sales dropped 22 percent in fiscal year 2026, which ended on June 30. "These charges include 33 million dollars associated with severance payments and contract terminations, as well as accounting write-downs of 89 million dollars related to raw materials, consumables, and inventory following the smelter's transition to care and maintenance status on March 15."

Mozal directly and indirectly employed over 4,000 workers. It produced 248,000 metric tons of aluminum up to March 2026, a 30 percent decline compared to the 355,000 tons recorded in the previous fiscal year, while sales fell from 351,000 to 275,000 tons, representing a 22 percent drop.

Las June, IDC announced options regarding the acquisition of Mozal. The company launched tender to hire an "independent commercial and technical adviser on three options, namely acquiring South32's shares through pre-emptive rights or a direct offer; facilitating an alternative shareholding structure involving other shareholders or strategic partners; and Selling down its own stake and exiting the investment."

The smelter requires approximately 950 megawatts of continuous baseload power, historically supplied by Hidroeléctrica de Cahora Bassa (HCB) routed via South Africa's Eskom grid, under a supply agreement that expired in March.

Mozal's shutdown had also wider implications, including for Eskom, which reportedly earned about R5 billion a year from electricity sales to the smelter.

Read the original article on AIM.

Mozambique: South32 Recorded Costs of 117 Million Dollars As Result of Mozal Shutdown

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