The shutdown of the Mozal aluminum smelter, located on the outskirts of Maputo, is depriving Europe of about 20% of its imports of raw aluminum at a time when the global market is facing additional supply constraints, Bloomberg reported.
The decision was confirmed by South32, the company that owns 63.7% of the operation, which announced that the plant would be placed on a “care and maintenance” footing following the failure of negotiations to secure an electricity supply contract at competitive prices beyond the current month. The plant, which has been in operation for about 25 years, relied on preferential energy agreements that had become increasingly unsustainable.
According to official Eurostat data, Mozal accounted for approximately one-fifth of European imports of primary aluminum last year, establishing itself as one of the main pillars of that market’s supply. Its shutdown comes at a time when international aluminum prices are reaching their highest levels since 2022, reflecting simultaneous pressures on global supply.
The impact on the Mozambican economy is significant. The smelter contributes about 2% to the Gross Domestic Product (GDP) and accounts for nearly 20% of the country’s export revenues, making it one of the largest export-oriented industrial projects. The suspension of operations thus exacerbates macroeconomic challenges in a context already marked by fiscal constraints and external vulnerabilities.
Mozal’s energy supply has been provided by the South African company Eskom, which, in turn, obtains electricity from the Cahora Bassa Hydroelectric Plant within Mozambique. The expiration of supply contracts under preferential terms and rising energy costs have been undermining the viability of energy-intensive industries in both Mozambique and South Africa.
In South Africa, this scenario has already led to the closure of most smelters, with only 11 currently in operation out of a total of 66 that previously existed. Recent developments highlight a structural trend of declining production capacity in the sector, linked to rising energy costs and supply instability.
Meanwhile, the alumina previously supplied to Mozal by the Worsley refinery in Australia will be redirected to third-party customers, with prices indexed to international markets, which may help to partially adjust trade flows, though without fully offsetting the drop in supply.
Mozal’s shutdown occurs in a particularly sensitive global context, with other large-scale facilities facing operational constraints, which tends to heighten price volatility and intensify competition for access to strategic raw materials.
For Mozambique, this episode clearly highlights the country’s dependence on competitive energy conditions to sustain large-scale industrial investments and its role in global value chains.
