Major Mozambique aluminium smelter set to shut down after failed talks with power suppliers including Eskom

Mining and metals company South32 has announced that it will be mothballing Mozal Aluminium (Mozal), the biggest industrial employer in Mozambique, early next year.

Mozal will be 'placed on care and maintenance' on or around 15 March 2026, after failing to secure a new electricity supply agreement in talks with Mozambique's government, hydropower generation company Hidroeléctrica de Cahora Bassa (HCB) and Eskom.

“Throughout our engagements we emphasized that Mozal’s ability to continue operating depended on securing sufficient electricity at a price which allows the smelter to remain internationally competitive", said South32 CEO Graham Kerr in a statement.

At the same time, South Africa's Electricity Minister Kgosientsho Ramokgopa revealed that it would cost the government R5.2 billion to subsidise Glencore and Samancor’s power prices in an effort to to buy time for a sustainable solution to these costs currently killing our ferroalloy industry, reports Moneyweb.

The basisfor smelters to keep operating in many countries is the availability and cost of electricity, energy expert Ruse Moleshe concurs.

And for South Africa, cross-subsidisation is a complex issue because it affects the economy as a whole, she says.

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Moleshe also considers the long-term benefits for South Africa, taking into consideration that competing countries like China offer industry much lower electricity prices.

"South Africa was once in a situation where we had excess supply of electricity and therefore we needed to attract big, energy-intensive users. That has changed and we cannot compete with countries like China in our current situation."

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