South32 has announced that its Mozal aluminium smelter in Mozambique will enter care and maintenance from around March 2026, after attempts to secure a new electricity supply agreement were unsuccessful.
The company said it continued to engage with the Government of the Republic of Mozambique, Hidroeléctrica de Cahora Bassa (HCB) and Eskom to secure sufficient and affordable electricity for Mozal beyond March 2026, when the current agreement expires.
“Throughout our engagements we emphasised that Mozal’s ability to continue operating depended on securing sufficient electricity at a price which allows the smelter to remain internationally competitive,” South32 chief executive officer Graham Kerr said.
“Unfortunately, the parties remained deadlocked on an appropriate electricity price, which was exacerbated by ongoing drought conditions affecting electricity supply from HCB. We must now turn our attention to safely placing the smelter on care and maintenance from March 2026.”
Mozal’s 2025-26 financial year (FY26) production guidance remains unchanged at 240,000 tonnes (South32 share). One-off costs for the transition, including employee separation and contract terminations, are expected to total approximately $US60 million, with ongoing annual costs of around $US5 million.
“We understand today’s announcement is difficult for our team at Mozal and we are focused on supporting them through this process,” Kerr said. “We also acknowledge the impact this will have on our suppliers, customers, communities and other stakeholders, and we are engaging with them as we transition from operations to care and maintenance in the coming months.”
Alumina from South32’s Worsley Alumina refinery will be redirected to third-party customers under index-linked arrangements, maintaining market engagement and value creation.
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