Australian mining and metals giant South32 has confirmed it will suspend operations at its major Mozal aluminium refinery in Mozambique by the end of March. The decision comes after protracted and unsuccessful negotiations to secure a new long-term electricity supply agreement for the energy-intensive facility.
Power Deal Deadlock Forces Production Halt
The company announced that the existing power contract with South African utility Eskom is set to expire at the end of July 2025. Despite extensive discussions, South32 and its partners have been unable to reach a commercially viable deal for continued electricity supply beyond that date. As a result, the difficult but necessary choice has been made to begin the process of mothballing the entire refinery complex.
A spokesperson for South32 stated that the suspension of the potlines—the production lines where aluminium is smelted—will commence immediately. The full preservation and care-and-maintenance process for the site is expected to be completed by March 31, 2025. This timeline allows for a controlled and safe wind-down of operations.
Impact on Workforce and Global Supply
The Mozal refinery is a significant industrial asset, contributing approximately 2% of the Western world's primary aluminium production. Its closure will have a tangible effect on global supply chains for the lightweight metal, which is crucial for industries ranging from automotive to construction and packaging.
The decision also directly impacts the local workforce in Mozambique. South32 has indicated it will now enter into consultations regarding the future of the approximately 1,000 employees and contractors currently working at the Mozal operation. The company has pledged to support its people through the transition.
South32 holds a 63.7% controlling interest in the Mozal joint venture. Its partners are Japanese conglomerate Mitsubishi Corp and the Mozambican government's investment arm, which hold 25% and 10% stakes respectively. The Industrial Development Corporation of South Africa owns the remaining share.
Strategic Shift and Future Uncertainty
This move aligns with South32's broader strategic review of its operations, which has seen the company exit coal and focus on metals critical for a lower-carbon future, like copper and nickel. The uncertainty surrounding affordable, long-term power in Mozambique made the aluminium operation increasingly untenable.
The mothballing means the refinery will be placed in a state of preservation, allowing for a potential future restart if market conditions and, critically, a reliable power solution become available. However, no timeline or guarantee for a restart exists. The focus for now is on safely securing the site and managing the social and economic consequences of the suspension for its employees and the local community.
