SOUTH32 is to start winding down operations at the Mozal Aluminium smelter in Mozambique in anticipation of the operation being placed on care and maintenance from March 2026.
As a result the group will take an impairment of $372m against its financial 2025 results which will reduce Mozal’s carrying value to $68m with the impairment to be excluded from financial year 2025 underlying earnings.
Announcing this today South32 CEO Graham Kerr said the decision by management resulted from South32 being unable to secure “sufficient and affordable” electricity beyond March 2026 when the smelter’s current power supply contract ends.
Mozal had been negotiating for a renewed power contract with the Mozambique government, Eskom and power company Hidroelectrica de Cahora Bassa.
Kerr’s final assessment of the talks was that “these engagements do not provide confidence that Mozal will secure sufficient and affordable electricity beyond March 2026.”
He commented, “as a result we will limit investment in Mozal stopping pot relining and standing down associated contractors starting this month.”
Mozal’s financial 2026 production is expected to be about 240,000 tons (South32 share) reflecting fewer pots in operations as the smelter stops pot relining and with operations only continuing to March next year.
Mozal gets its power from the Cahora Bassa hydro-electric scheme on the Zambezi River in Mozambique which also supplies power to Eskom, the South African power utility. In terms of Mozal’s power agreement, Eskom provides emergency power in the event of interruptions from HCB.
South32 had targeted 2026 as the year in which it returned Mozal to its nameplate 370,000 tons a year production after it only produced 314,000 tons in 2023/24. Prior to violent protests in Mozambique, following disrupted elections in October, South32 had forecast production of 360,000 tons for the 2025 financial year.
About 20 kilometres west of Maputo, Mozambique’s capital, Mozal is the biggest industrial employer in the Southern African country.
