Australia’s South32 confirmed on Monday (16) that the Mozal aluminum smelter, Mozambique’s largest industrial facility, has suspended operations since Sunday, entering a maintenance and conservation phase. The company expects to spend approximately 52.4 million euros on the suspension, including expenses related to employee layoffs.
According to South32 CEO Graham Kerr, who owns 63.7% of the smelter, over the past six years the company has engaged extensively with the Mozambican government, South African power utility Eskom—which purchases energy from Mozambique and resells it to the smelter—and other stakeholders, but has been unable to secure a sufficient and affordable energy supply beyond March 2026.
Mozal, one of the largest aluminum smelters in Africa, employs over 1,000 direct workers and approximately 4,000 indirect workers. South32 estimated that maintaining the smelter will cost €4.4 million annually, totaling €52.4 million with the suspension, including contract terminations.
“Although this is not the outcome we had hoped for, we are proud of the history and significant contribution Mozal has made to the local community and the Mozambican economy over its 25 years of operation,” said Kerr.
The impact of the suspension is already being felt at the Beluluane Industrial Park in the south of the country. At least five companies have shut down operations, and dozens more may follow suit. Onório Manuel, general director of Mozparks, the entity managing the industrial park located 20 kilometers from Maputo, indicated that about 25 companies provide goods and services to Mozal and that most are considering taking similar measures due to the smelter’s shutdown.
He explained that some factories had to continue operating until Mozal’s shutdown, as they were part of the smelter’s safe decommissioning process. However, with the company entering maintenance mode, more companies are expected to close, particularly those directly linked to industrial production and maintenance.
“Over the past six years, we have engaged extensively with the Government of the Republic of Mozambique, Eskom, and other stakeholders, but we have been unable to secure a sufficient and affordable power supply for Mozal beyond March 2026.”
Graham Kerr – CEO of South32
The official warned that the temporary shutdown of the plant will have a “devastating” effect on the pace of growth and development of the industrial park, which had been growing rapidly and attracting new industries. According to Manuel, Mozal accounted for about 49% of the manufacturing sector in Mozambique’s GDP, equivalent to 1.3 billion euros, and contributed about 40% of industrial production in Maputo Province. The shutdown could primarily affect the social sector and reduce the industry’s impact on the Gross Domestic Product.
Mozal’s decision is also due to the unsustainability of the proposed electricity rate. In discussions with Australian investors, Kerr explained that Eskom’s only formal offer was nearly $100 per megawatt-hour (MWh), whereas outside of China, less than 1% of smelters have contracts exceeding $50 per MWh.
The Mozambican government, through the spokesperson for the Council of Ministers, Inocêncio Impissa, confirmed that the smelter’s shutdown, announced about two weeks ago, will have a significant economic impact, primarily due to Mozal’s connections with multiple industries and suppliers. Impissa emphasized that the smelter’s output was one of the country’s main sources of exports.
The minister explained that Mozal would require approximately 950 megawatts of power, a quantity the country is currently unable to supply. The current supply, provided by South Africa, also cannot guarantee the necessary energy. If it were possible to secure the energy capacity, negotiations could proceed, allowing for a more reasonable price and adequate compensation.
