Maputo, July 24, 2026 (Lusa) - The Australian company South32 estimates extraordinary costs of €104 million arising from the shutdown of Mozal, Mozambique's largest industrial plant, whose production fell by 30% and sales declined by 22% in the 2026 financial year, which ended on 30 June.
According to the group's quarterly report, seen by Lusa on Friday, these costs include $33 million (€28 million) associated with employee compensation and contract terminations, as well as accounting losses of $89 million (€76 million) relating to raw materials, consumables and inventories, following the smelter's transition to a conservation and maintenance regime on 15 March.
Mozal employed more than 4,000 workers directly and indirectly, having produced 248,000 tonnes of aluminium up to 15 March 2026, 30% less than the 355,000 tonnes recorded in the previous financial year, whilst sales fell from 351,000 to 275,000 tonnes, a 22% drop.
The smelter, one of the largest in Africa, was also one of Mozambique's leading exporters and a source of foreign exchange for the country.
Between April and June, the final quarter of the 2026 financial year and the first full quarter following the suspension of operations, it recorded no production, limiting itself to the sale of 46,000 tonnes of aluminium from remaining stock, it added.
The suspension of operations followed several months of negotiations without agreement on the supply of the electricity required to maintain the smelter, which is located on the outskirts of Maputo.
South32 had previously described the proposed tariff for supplying electricity to the industrial plant as «completely unsustainable», attributing the decision to close the facility to the impossibility of securing energy at costs compatible with the business.
At an investor conference held in March, the company's then chief executive, Graham Kerr, explained that the only formal proposal on the table was for a price of around $100 per megawatt-hour – almost double what the company considered viable for maintaining production.
According to the company, energy accounts for around a third of Mozal's cost structure; the company had argued for a maximum price of around $51 per megawatt-hour.
The smelter requires around 950 megawatts to operate continuously, with power supplied by the Cahora Bassa hydroelectric plant via the South African network operator Eskom, whose contract expired in March.
South32, which holds a 63.7% stake in Mozal, cited the drought affecting the Cahora Bassa reservoir as one of the factors limiting energy availability.
Previously, the group had indicated that it might resume production should energy and economic conditions change. However, on 1 July, South32 announced the sale of part of its global aluminium assets to the US-based Alcoa Corporation, in a deal valued at up to $5.6 billion (€4.8 billion).
Mozal was excluded from the transaction and remains under the control of South32, which had previously acknowledged to Lusa that it was continuing to assess «various options» for the future of the Mozambican smelter.
The South African Industrial Development Corporation (IDC), which currently holds a 32.48% stake in Mozal, launched a tender in June to engage independent consultants to assess the potential acquisition of South32's majority stake and to analyse the feasibility of taking over the operation.
According to this documentation, previously reported by Lusa, the South African state-owned institution intends to examine the risks, costs and conditions of a potential purchase, including alternative energy supply solutions that would ensure the smelter's long-term sustainability.
PVJ/ADB // ADB.
Lusa
