Maputo, Feb. 10, 2026 (Lusa) - Mozambique's Energy Minister, Estêvão Pale, said the government is trying to avoid the suspension of operations at the Mozal aluminium smelter, the country's largest industry, which employs 4,000 people, scheduled to take place within a month.
"There are discussions on the matter. The government is doing everything necessary to ensure that the factory does not go into a maintenance shutdown," said the minister for mineral resources and energy, Estêvão Pale, questioned by journalists on the sidelines of the Mining Indaba conference, which has been taking place since Monday in Cape Town, South Africa.
At issue is a dispute between Australia's South32, Mozal's main shareholder, which operates on the outskirts of Maputo, over the energy tariffs to be provided by Mozambique for its operation.
The management announced in December that Mozal will suspend activities and enter into a maintenance shutdown from 15 March 2026, given the lack of a new electricity supply agreement.
"A new electricity supply agreement has not been secured and Mozal will be placed on maintenance and conservation around 15 March 2026. Consequently, the raw materials needed to sustain operations after March 2026 have not been procured," reads a statement from South32.
According to the document, the latest position disclosed by the company, Mozal was then continuing to dialogue with the Government, Cahora Bassa Hydroelectric (HCB) and South African energy company Eskom to ensure the supply of "sufficient and affordable electricity" until the suspension in March, when the current energy supply agreement expires.
"Throughout our negotiations, we emphasised that Mozal's ability to continue operating depended on securing sufficient electricity at a price that would allow the smelter to remain internationally competitive. Unfortunately, the parties remained at an impasse on the appropriate price for electricity, which was exacerbated by drought conditions affecting HCB's electricity supply," South32 CEO Graham Kerr said in the statement.
He acknowledged that the announcement was "difficult" for the company's team and will also have an impact on suppliers, customers, communities and other stakeholders: "We understand that today's announcement is difficult for our team at Mozal and we are committed to supporting them throughout this process (...). We are working with them as we transition operations to maintenance and conservation over the coming months."
According to the statement, the cost of maintenance, including contract terminations, is expected to be around US$60 million (€51 million), and ongoing annual maintenance and conservation costs will be around US$5 million (€4.2 million).
"The alumina supplied by our Worsley Alumina refinery to Mozal will be sold to third-party customers. South32 has secured options with customers to sell this alumina at indexed prices," the document further states, adding that the production guidance for the 2026 fiscal year, ending in March, "remains unchanged at 240,000 tonnes."
Mozal purchases almost half of the energy produced in Mozambique - mainly from the Cahora Bassa Hydroelectric Plant - and has an estimated weight of at least 3% of the Gross Domestic Product (GDP).
On 18 August, Mozambican president Daniel Chapo said that the energy tariffs proposed by Mozal would lead to the collapse of HCB, reacting at the time to the threat of Mozal's closure.
Electricity is supplied to Mozal by Eskom, which in turn purchases energy from HCB - 66% of the total produced in 2024 - which operates in central Mozambique, but the Mozambican government intends to reverse this scenario.
Lusa reported in February 2024 that the Mozambican government intends to repatriate, from 2030 onwards, for domestic use, the electricity it has been exporting from HCB to South Africa since 1979, as stated in the Strategy for Energy Transition in Mozambique until 2050.
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