Maputo, June 15, 2026 (Lusa) - South Africa’s Industrial Development Corporation (IDC) has acknowledged that it is considering acquiring the Mozal aluminium smelter in Mozambique, with a view to taking control of the project and restarting production, according to documents seen by Lusa on Monday.
The information is contained in a tender launched on 10 June by the South African state-owned financial institution, which funds industrial development, to hire an independent consultant to study “the commercial merits, risks and terms of a transaction to acquire Mozal and resume operations”.
It states that IDC, which currently holds a 32.48% stake in Mozal in Maputo – the country’s largest industrial plant, which has been shut down since 15 March due to a dispute over energy supply costs – “is considering its options”, including “acquiring the majority shareholder’s shares” or structuring a new partnership to operate the industrial plant.
The tasks outlined in a tender open until 9 July include a technical analysis of the plant, an assessment of the feasibility of restarting production, a cost evaluation, and the identification of alternative energy solutions capable of supporting a sustainable long-term operation.
The study is expected to propose a financing model and a governance structure, and to identify potential strategic partners for the future operation of the smelter.
It adds that any decision to reactivate Mozal will depend on the ability to secure a “a long-term, affordable and sustainable energy supply solution”, which is considered an essential condition for the project’s viability.
The Australian company South32, which runs the smelter, previously described the energy tariff proposed to Mozal as “totally unsustainable”, thereby justifying its closure, with operations having been on standby since 15 March, whilst not ruling out a restart should conditions change.
In a call with Australian investors, a transcript of which was accessed by Lusa, the chief executive, Graham Kerr, explained that the “only formal offer” for energy supply from Eskom was nearly $100 per megawatt-hour (MWh), whereas “outside China, less than 1%” of smelters have contracts above $50 per MWh.
The proposal received made operations in Maputo, one of the largest smelters in Africa, “completely unsustainable”, as energy accounts for “a third of Mozal’s cost structure”, which acknowledged a maximum of $51 per MWh.
This smelter requires 950 MWh to operate 24 hours a day, and is supplied by the Cahora-Bassa Hydroelectric Plant (HCB) via the South African company Eskom, whose supply contract ended in March.
According to the Australian group, the official explanation is the drought that has left the HCB reservoir with reduced water storage.
“Around this time last year, they began telling us that, after two years of severe drought, they did not have the capacity to meet Mozal’s energy needs. It would likely take at least two years for the reservoir to refill, and then there is still some maintenance they need to carry out, which means we will probably not have full power for the next two to four years,” Kerr explained.
The chief executive of South32 then acknowledged the “major impact” on employment: “Around 4,000 to 5,000 people depend on this, including contractors, our workers, and there is a further indirect impact on around 20,000 people. That is about one in three jobs in Maputo. That is probably around 3.9% of [Mozambique’s] GDP.”
Regarding the possibility of a recovery, in addition to the technical difficulties and the time-consuming nature of the process of reactivating a smelter with 576 furnaces, Kerr questioned which power contract would apply: “Clearly, what Eskom has available to sell today is not economically viable. I think we can expect the Cahora Bassa reservoir to return to the necessary levels, but we were told that they would only be able to supply low levels of power for probably the next two, perhaps four years. That would be a very long time for Mozal to be out of operation and then try to restart it."
PVJ/ADB // ADB.
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