16th Mar 2026 06:58
(Alliance News) - South32 Ltd said it has placed Mozal Aluminium on care and maintenance, after failing to secure an "affordable" electricity supply deal in Mozambique.
"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," Chief Executive Officer Graham Kerr said on Monday.
The care and maintenance move took effect from Sunday.
The Perth, Australia-based miner said the alumina supplied from its Worsley Alumina refinery to Mozal will now be sold to third-party customers at "index-linked" prices.
The current power supply agreement expires this month.
South32 holds 63.7% of Mozal, which is an aluminium smelter located near Maputo, the capital of Mozambique.
Historically, the majority of electricity for Mozal has been generated in Mozambique by a hydro-electric power generator, Hidroelectrica de Cahora Bassa. HCB is majority owned by the Mozambican government.
Electricity from Eskom Holdings SOC Ltd, the state-owned electricity supplier of South Africa, is supplied to Mozal when HCB is unable to meet all of Mozal's electricity requirements.
"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," South32's Kerr said on Monday.
South32 has previously indicated that one-off costs to place Mozal into care and maintenance are about USD60 million. Ongoing annual care and maintenance costs are around USD5 million.
For the financial year that ended June 30 last year, Mozal aluminium production was 355,000 tonnes, up 13% from 314,000 tonnes the year before.
South32 shares closed down 5.7% to AUD4.16 in Sydney on Monday.
By Artwell Dlamini, Alliance News senior reporter South Africa
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