Thursday, February 19, that it is necessary to find “responsible” and socially just solutions in light of the announcement of the suspension of activities at the Mozal aluminum smelter, located in Maputo province, after Australian company South32 failed to secure a new electricity supply agreement at competitive prices.
“We are committed to finding responsible and socially just solutions in light of Mozal’s decision to close its operations next March,” said the head of state during a reception in Maputo for the diplomatic corps accredited to the country.
According to the president, “this is a serious and ongoing dialogue that takes into account the social impact on thousands of Mozambican workers and families directly or indirectly linked to this enterprise.”
Mozal recently announced that it will proceed with collective redundancies under the operational suspension regime (“care and maintenance”) from March 15. In a document sent to the Mozal Trade Union Committee and consulted by Diário Económico, the company proposes compensation “of 6% of annual salary for each year of service for those earning above seven minimum wages in the sector and 40 days’ salary for each year of service for the rest.”
South32 confirmed that, despite the government’s attempts to resolve the dispute over energy tariffs, it will suspend operations. “It will switch to maintenance and conservation mode due to the impossibility of guaranteeing a sufficient and affordable supply of electricity. We are working closely with our employees and partners on this transition,” said Graham Kerr, chief executive of South32, Mozal’s main shareholder, after presenting the group’s results.
Quoted in a statement released by Reuters, the official said that last year South32 recorded a $372 million drop in its business because it was unable to guarantee affordable energy supplies due to the impact of drought on Mozambique’s hydroelectric power plant. He added that it had not been possible to reach an agreement on reasonable prices with the South African backup energy supplier Eskom.
“There is a team working with Mozal and the entities involved to ensure that the future of the company is not detrimental to any of the parties,” said Inocêncio Impissa.
According to the CEO, in Mozambique, the mining company employs more than 2,000 people directly, another 2,000 outsourced workers, and the factory is responsible for one-third of jobs in the country’s manufacturing sector. “The cost of maintenance, including contract termination, is around US$60 million, and the ongoing annual maintenance and conservation costs will be around US$5 million,” he recalled.
In turn, the government announced that it is making every effort to prevent the closure of the aluminum smelter. The assurance was given by the Minister of Mineral Resources and Energy, Estêvão Pale, in statements made on the sidelines of a conference on mining and energy held in Cape Town, South Africa.
“We are doing everything necessary to keep Mozal in operation,” said the minister, without giving details on the status of negotiations with the company or electricity suppliers.
The minister’s intervention came at a time when South32 announced in December 2025 that it would place the aluminum smelter on “care and maintenance” from March 15, 2026, if a new energy supply contract was not secured.
“A new electricity supply agreement has not been secured and, therefore, Mozal will be placed on ‘care and maintenance’ around March 15, 2026,” the company said in a document sent to the media, adding that “the raw materials needed to sustain operations beyond March 2026 have not been procured.”
Last year, the government assured that it was closely monitoring the company’s situation after it announced the suspension of activities due to the lack of a new electricity supply agreement. According to the spokesperson for the Council of Ministers, Inocêncio Impissa, a technical team is working with Mozal and the entities involved to avoid negative impacts on workers, suppliers, and other stakeholders.
“There is a team working with Mozal and the entities involved to ensure that the future of the company is not detrimental to any of the parties,” said Inocêncio Impissa.
Without giving details on the stage of negotiations, he clarified that any decision will be made public at the appropriate time. “When the result is effectively finalized, it will be announced through the Council of Ministers or the Ministry of Mineral Resources and Energy, which is monitoring substantive issues with Mozal,” he explained.
