Mozambique’s economic agenda this week was dominated by the government’s efforts to find a solution to restart operations at the Mozal aluminium smelter, South32’s decision to exclude the Mozambican facility from the sale of most of its aluminium business to Alcoa Corporation in a transaction worth up to US$5.6 billion, and warnings from the SADC Lawyers’ Association (SADC-LA) over the legal implications of the country’s new Mining Law, which provides for the gradual ban on exports of unprocessed mineral raw materials.
President Daniel Chapo reaffirmed this week that the government is continuing to work towards restarting operations at Mozal, expressing confidence that a solution will be found to reopen the country’s largest industrial facility.
Speaking to journalists, the head of state said the government remains engaged in discussions aimed at reactivating the smelter, whose operations have been suspended since March, reiterating that bringing the plant back into production remains a national priority.
Mozal has been under care and maintenance since 15 March 2026 after South32 suspended production because it was unable to secure sufficient electricity supplies at competitive prices following the expiry of its power supply agreement. The company has maintained that any decision to restart operations will depend on securing a “long-term, affordable and sustainable” electricity solution, which it considers essential for the smelter’s economic viability.
Meanwhile, South32 announced the sale of most of its aluminium value chain assets to Alcoa Corporation in a transaction valued at up to US$5.6 billion.
The deal includes assets located in Australia, South Africa and Brazil but excludes Mozal Aluminium, which remains under care and maintenance while its potential divestment continues to be “under active consideration.”
According to South32, the transaction will allow the company to streamline its portfolio by focusing on base and precious metals, reduce operational complexity, strengthen its financial position and increase its capacity to invest in future growth projects.
Alcoa, for its part, said the acquisition represents a strong strategic fit and is expected to generate significant operational efficiencies.
Mozal’s exclusion from the transaction comes as the energy supply issues that led to the suspension of production remain unresolved. South32 has previously stated that it could reconsider restarting the smelter if commercially viable and sustainable electricity supply arrangements are secured.
Also during the week, the President of the SADC Lawyers’ Association (SADC-LA) warned of the legal challenges arising from Mozambique’s new mining policy, which introduces a gradual prohibition on the export of unprocessed mineral raw materials.
Speaking at the opening of the association’s 25th Annual Conference in Maputo, he said the policy reflects a broader regional trend aimed at encouraging local mineral beneficiation, increasing domestic value addition, creating skilled employment and reducing dependence on exports of raw commodities.
However, he cautioned that implementing the policy will require careful consideration of its legal implications, including the review of existing mining concession agreements, the compatibility of the new restrictions with fiscal and regulatory stability clauses, and the assessment of potential disputes under international investment arbitration.
He also called for greater regional harmonisation of mining policies, warning that a lack of coordination among member states could divert investment towards jurisdictions with less demanding regulatory frameworks, ultimately undermining the region’s industrialisation objectives.
Among the recommendations presented was the creation of a regional working group to assess the legal implications of the new measures and develop common guidelines for legislative reform, concession agreement negotiations and the defence of member states in potential investment disputes.
The revised Mining Law, approved by Parliament in May this year, forms part of a broader package of reforms designed to promote domestic mineral processing, increase value retention within Mozambique, strengthen national participation in the extractive industry’s value chain and ensure that a share of mining revenues directly benefits local communities.
The next challenge will be the effective implementation and regulation of these measures while balancing industrialisation ambitions with legal certainty and maintaining an attractive investment climate.
The week was also marked by growing concern within the private sector over irregular fuel supplies.
The Confederation of Economic Associations of Mozambique (CTA) warned that businesses remain “on high alert” due to persistent supply disruptions, arguing that the situation could undermine the country’s economic recovery and industrial output at a time when global markets continue to be affected by tensions in the Middle East.
The concerns come as several regions across the country continue to experience fuel shortages, particularly petrol, although conditions have improved somewhat compared with previous weeks.
The current supply crisis, which began in late April, has resulted in long queues at filling stations, disrupted economic activity and prompted the private sector to call for the normalisation of fuel supplies as a prerequisite for sustaining Mozambique’s economic recovery.
Text: Felisberto Ruco
