South32 mothballs Mozal smelter after failing to secure affordable power

Australian diversified miner South32 said on Monday it had placed its Mozal aluminum smelter in Mozambique on care and maintenance on March 15.

The company said it had failed to secure sufficient and affordable power supply for Mozal beyond March 2026, resulting in it placing the smelter under care and maintenance.

Negotiations between the Perth-based firm and Mozambique’s government and power suppliers had been going on for several years to reach an agreement for the smelter’s energy-intensive operations.

South32 had been in talks for six years with hydroelectric power supplier Hidroeléctrica de Cahora Bassa (HCB), which is majority owned by the Mozambique government, about a power tariff which is due to expire in March 2026.

Producing aluminum is energy-intensive, making affordable power supply a key concern for aluminum producers such as South32.

The Mozal smelter, in which South32 holds a 63.7% stake, has been a significant contributor to the company’s aluminum output, accounting for just over 29% of its total aluminum production in fiscal 2025.

South32 had flagged a $372 million impairment for the Mozal smelter in its fiscal year 2025 results, reflecting the financial impact of the anticipated shutdown.

The alumina supplied from the firm’s Worsley Alumina refinery to Mozal will now be sold to third party customers at index-linked prices, the company said in its statement.

(By Rajasik Mukherjee; Editing by Deepa Babington and Diane Craft)