SOUTH32 said on Monday it had put its 63.7%-owned, 320,000 ton a year Mozal aluminium smelter in Mozambique on care and maintenance, effective March 15.
Costs associated with the mothballing, including employee separation and contract termination, would total $60m on a 100% basis. Approximately $5m in monthly care and maintenance costs would also be incurred, the group said.
Alumina supplied from South32’s Worsley Alumina refinery to Mozal will now be sold to third party customers at index-linked prices, said South32.
“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,” said Graham Kerr, CEO of South32.
South32 impaired its investment in Mozal by $372m last year after failing to secure affordable power beyond March. Drought has crippled Mozambique’s hydroelectric supply, whilst negotiations with South Africa’s Eskom for backup power proved unsuccessful.
“Over the past six years we have engaged extensively with the Government of the Republic of Mozambique, Eskom and other key stakeholders but were unable to secure sufficient and affordable power supply for Mozal beyond March 2026,” Kerr said.
Kerr previously raised the prospect Mozal could one day be resuscitated which is why it has been put on care and maintenance rather than move to a closure. “We wouldn’t be looking to go into full closure mode until the HCB (Hidroeléctrica de Cahora Bassa) power contract and future was understood,” he said.
An estimated 4,000 direct and indirect jobs, representing one-third of Mozambique’s manufacturing employment, will be affected by the move.
