The shutdown of Mozal is causing significant changes in business activity, affecting companies in the Beluluane Industrial Park and putting pressure on the labour market.
The Australian company South32, which holds 63.7% of Mozal, has suspended operations at the country’s largest industrial facility. The aluminium smelter has been under maintenance and conservation mode since March.
“The most important lesson is that all large-scale national projects must have an industrial park,” said Onório Manuel, chairman of the board of MozParks. This approach “allows suppliers to be hosted and activities to be developed independently of the anchor project, strengthening economic resilience.”
What is happening at the Beluluane Industrial Park serves as an example. Around 25 companies had a direct relationship with Mozal, and some have already begun closing down or reducing activity. These companies “will be severely affected, will shut down operations and have already laid off employees,” he said.
For some, exclusive dependence on Mozal limits alternatives.
At the same time, discussions are underway with companies seeking to adapt. “We are in the process of discussing with some of these 25 to see if they can use their property and equipment for other market segments,” he said.
The transition will not be immediate, but diversification could save them — and should have been planned earlier.
Despite the impact, the industrial park continues to operate in various sectors. “More than 60% of companies have no relationship with Mozal; they are in other activities,” he said, noting that investment attraction efforts are continuing.
“What we are doing in several parts of the country is precisely aimed at reducing extreme dependence on anchor projects,” he added, referring to ongoing initiatives to expand industrial parks. These spaces allow suppliers to be hosted, promote local processing of raw materials, and attract new investment. Resource revenues should be channelled into “structuring sectors” such as agriculture, infrastructure, logistics, and tourism.
Employment affected at multiple levels
The suspension of Mozal has extended its impact to employment (direct and indirect). Between four and five thousand workers are expected to be affected — from company staff to employees of supplier firms.
In several cases, layoffs have already taken place; in others, they are ongoing.
The impact is not only economic, but also social, due to income loss and reduced business activity.
Labour market pressure
“We are already seeing an increase in the number of available professionals. We have received many CVs from Mozal workers,” said Vicente Sitoe, CEO of SDO Moçambique, a human resources consultancy.
According to him, the entry of these professionals is changing market dynamics. “When we add these people, the labour market becomes saturated.”
Most candidates have technical experience, especially in industrial fields, increasing competition in specific segments.
Salaries and unemployment under pressure
The larger labour supply comes at a time of limited job creation. This will affect wage levels.
“What we will see is the consolidation of average salaries below Mozal levels,” he said, noting that Mozal had highly competitive pay.
As for unemployment, he expects it to worsen. “Mozambique already has a very high unemployment rate. It will increase, no doubt.”
He added that some workers have not yet fully entered the job market and that the adjustment process could take six months to a year.
Limited absorption capacity in other sectors
Integration of these workers into other sectors is possible but limited. Oil and gas is one of the main alternatives.
Energy also offers some opportunities, but vacancies are limited. In many cases, integration will mean replacing existing workers rather than creating new jobs.
“It will be almost a transition. Those who did not have jobs will remain without jobs,” he said.
He also noted that Mozal could have implemented additional support measures for workers, such as an “outplacement” programme to help professional reintegration, although this is not mandatory.
In its shutdown process, South32 expects to spend around 52.4 million euros, including costs related to layoffs.
CEO Graham Kerr explained that over the past six years the company engaged with the government, South Africa’s Eskom — which supplies electricity to Mozambique and resells it to the smelter — and other stakeholders, but was unable to secure sufficient and viable electricity supply.
Source: Dário Sixpene • Photography: D.R.
