The company said it will record an impairment charge in its 2025 financial results, citing rising uncertainty over the smelter’s operations beyond March 2026. Aluminium production is highly power-dependent, and without a new, affordable supply agreement in place, South32 is reassessing Mozal’s long-term value.
South32 stated, “We have been working with the government of Mozambique, HCB, and Eskom for the last six years to secure electricity supply to Mozal beyond March 2026. To date, Mozal has been unable to agree on an affordable electricity price tariff.”
Located near Maputo, Mozal Aluminium is a cornerstone of Mozambique’s industrial economy, contributing around 3 per cent of the country’s GDP and employing thousands. South32 holds a 63.7 per cent stake in the smelter, with the Industrial Development Corporation of South Africa owning 32.4 per cent, and the Mozambique government holding 3.9 per cent.
Mozal currently receives electricity primarily from Hidroeléctrica de Cahora Bassa (HCB), Mozambique’s state-owned hydroelectric provider. When HCB’s supply falls short, Eskom of South Africa steps in. The current agreement is set to expire in March 2026, and with no viable alternative secured, South32 has alerted investors to the potential risk of a major asset write-down.
The group said, “These factors have resulted in increased uncertainty regarding future electricity supply to Mozal. We are assessing the carrying value of Mozal given the increased uncertainty regarding future electricity supply and expect to recognise an impairment expense in our 2025 results. We will provide the quantum of the impairment expense when this assessment is completed.”
Compounding the concern, HCB recently warned that drought conditions could limit its ability to generate sufficient hydroelectric power, intensifying pressure on already strained negotiations.
