Maputo, Aug. 27, 2025 (Lusa) - Mozambique's government stated that negotiations were underway with Mozal, the country's largest industry, to ensure the company's continued presence in the country after it announced the possibility of withdrawing in 2026.
"Mozambique's government is and will naturally continue to cherish Mozal and will continue to negotiate to improve the terms of negotiation and ensure that it will continue to produce in Mozambique, with all the necessary facilities, but that there will be no harm to any of the parties," said the cabinet spokesman after a meeting in Maputo.
According to Inocêncio Impissa, the government is in a "much more friendly atmosphere" with all the parties involved in the process, including Mozal, Hidroelétrica de Moçambique (HCB) and South Africa's Eskom, to ensure that everyone's interests are "legally protected and fair".
Inocêncio Impissa said that Mozambique's government is informed and aware of the "series of risks" associated with the crisis in Mozambique's largest industry and is aware of the cancellation of contracts of some companies allied to Mozal, but clarified that the situation has nothing to do with the negotiations underway.
Mozal, which has around 5,000 workers at the second largest aluminium smelter in Africa, on the outskirts of Maputo, announced in August that it intends to cut investment and lay off contracted contractors, maintaining the operation only until March 2026, when the electricity supply contract ends, claiming that it is unable to continue.
In a briefing to the market, the Australian group South32, which leads the unit, said that it has been in dialogue with Mozambique's government, HCB and South Africa's Eskom - which buys electricity from HCB and sells it to Mozal - "to guarantee the supply of sufficient and affordable electricity" to "allow it to operate beyond March 2026, when the current [power supply] contract expires".
Mozambique's Confederation of Economic Associations (CTA) said on Tuesday that Mozal has "suddenly" cancelled contracts with around 20 companies, leaving at least a thousand unemployed.
"This declaration [of the possibility of Mozal closing in 2026] was followed by the sudden cancellation of contracts with around 20 Mozambican companies that supply Mozal, directly affecting around 1,000 jobs and jeopardising the continuity of companies with decades of uninterrupted collaboration with the foundry," said Álvaro Massingue, president of the CTA.
At a press conference in Maputo today, the Mozambican businessmen considered it "unacceptable that a company that has benefited so much from the national fiscal, institutional and economic environment should adopt a stance that destabilises the Mozambican business fabric and weakens investor confidence".
On 22 August, Mozambique's government considered the tax contribution of Mozambique's largest industry to be "extremely low", expressing an interest in moving forward with a review of its obligations in this area.
Mozal purchases almost half of the energy produced in Mozambique and accounts for an estimated 3% of the country's Gross Domestic Product (GDP).
On 18 August, the Mozambican President stated that the energy tariffs proposed by Mozal, Mozambique's largest industry, would lead to the collapse of HCB, in response to the threat of the aluminium smelting plant's closure in 2026.
Mozal's electricity is supplied by South Africa's Eskom, which in turn buys energy from HCB - 66% of the total produced in 2024 - which operates in the centre of Mozambique, but Mozambique's government wants to reverse this scenario.
Lusa reported in February 2024 that Mozambique's government intends to repatriate the electricity it has been exporting from HCB to South Africa since 1979 for domestic use from 2030, as stated in the Strategy for Energy Transition in Mozambique until 2050.
LN/ADB // ADB.
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