The Australian company South32 stated that the shutdown of the Mozal aluminum smelter, located in Maputo Province, “is not permanent and does not constitute abandonment of the business,” clarifying that the measure—which resulted in the compensation of 1,100 direct employees due to a lack of agreement on renewing the electricity supply contract—is only a temporary operational step for maintenance and preservation.
This position was included in a response letter sent to the Attorney General’s Office (PGR), after the Public Prosecutor noted irregularities in the suspension of Mozal’s activities, arguing that the procedure was carried out unilaterally by the majority shareholder South32, rather than through a general assembly decision including other shareholders.
In the document cited by Notícias, the multinational rejected the Public Prosecutor’s conclusion that the decision was legally flawed due to the absence of a general assembly deliberation. “The measure falls within the powers of the company’s governing and management bodies and does not automatically fall under matters reserved for shareholders’ approval, as stated in the notice issued last week.”
“Without prejudice to this institutional respect, we must clarify that Mozal, S.A. does not agree with the legal characterization in the notice. In the company’s view, the measure is temporary and precautionary, adopted within the framework of corporate management to preserve assets, safeguard facilities, protect the company’s economic value, and maintain conditions for a future resumption of activity,” the statement adds.
The company also explained that it maintains its legal personality, with its corporate bodies continuing to operate, its legal and contractual responsibilities intact, and the company still bound to fulfill labor, fiscal, regulatory, environmental, and other applicable obligations. “Classifying this measure as a suspension of company activity, closure, abandonment, or suspension of a substantial part of the business does not occur automatically and requires rigorous legal assessment based on the specific facts, the temporary nature of the measure, and the applicable statutory and contractual framework,” the document emphasized.
Mozal reaffirmed its full willingness to cooperate with the Attorney General’s Office, including through institutional meetings or providing any additional information deemed relevant.
Mozal, Mozambique’s largest aluminum smelter, suspended operations on March 15, entering a maintenance and preservation phase after failing to secure an agreement for electricity supply at competitive prices. The decision, announced by majority shareholder South32, marks the end of 25 years of continuous operation of one of the country’s major industrial megaprojects.
The shutdown is estimated to cost around $60 million, including contract termination expenses, while maintaining the unit is expected to cost approximately $5 million per year. The company justified the decision by citing the inability to secure sufficient electricity at sustainable prices, despite years of negotiations with the Mozambican government, Eskom, and other energy sector stakeholders.
With a significant role in the national economy, Mozal made a major contribution to the manufacturing industry and GDP, while supporting over 1,000 direct jobs and around 4,000 indirect jobs. Its suspension is already creating a ripple effect, with at least five companies closing operations at the Beluluane Industrial Park and others considering suspending activities due to their heavy dependence on the smelter.
Source: Diário Económico
