Mozal Aluminium, Mozambique’s largest industrial employer, ceased production on Monday, March 16, 2026, after South32 Ltd. Formally initiated care and maintenance procedures. The closure follows six years of unsuccessful negotiations with the Mozambican government, Eskom, and Hidroeléctrica de Cahora Bassa regarding a sustainable electricity supply agreement.
The decision impacts approximately 5,000 direct employees and an undetermined number within Mozambique’s broader supply chain, according to company statements. South32 had signaled the potential shutdown in August 2025, contingent on failing to secure a viable power deal, and ceased procuring raw materials for production beyond March, effectively predetermining the outcome.
The core issue throughout the protracted discussions was the cost of electricity. Mozal Aluminium, a 320,000-tonne-per-year smelter located near Maputo, consumes roughly 950 megawatts of power – nearly half of Mozambique’s total electricity output – requiring a competitive tariff to maintain profitability against other global aluminium producers.
South32 has taken a $372 million impairment charge against the asset in its 2025 financial year, reducing Mozal’s carrying value to $68 million. The company estimates one-off costs associated with the transition to care and maintenance, including employee separation payments and contract terminations, at $60 million, with ongoing annual care and maintenance expenses of approximately $5 million.
The alumina previously supplied to Mozal from South32’s Worsley refinery in Australia will now be sold to third-party customers at index-linked prices, the company confirmed. South32 holds a 63.7% stake in Mozal, with the Industrial Development Corporation owning 32.4% and the Mozambican government holding the remaining share.
The shutdown of Mozal, Africa’s second-largest aluminium smelter, comes as only 11 out of 66 smelters remain operational in South Africa, a consequence of rising and unstable electricity costs. South32 CEO Graham Kerr stated the outcome was “not the outcome we wanted,” adding that the company placed the operation into care and maintenance on Sunday, March 15th.
The failure to reach an agreement with Eskom, South Africa’s state-owned power utility, and the Mozambican government, has left the future of the facility uncertain. No immediate plans for the resumption of operations have been announced.
