A major setback has emerged for Mozambique’s industrial sector following confirmation that the Mozal aluminium smelter will be placed under care and maintenance by March. The decision, announced on Tuesday by the Perth based operator, comes after prolonged and ultimately unsuccessful negotiations with the Mozambican government and power suppliers over electricity pricing and supply.
The move is expected to result in a one off cost of approximately sixty million dollars, underscoring the financial strain caused by the failure to secure a sustainable power agreement. Mozal is one of Mozambique’s flagship industrial assets and a significant contributor to exports, employment and regional economic activity. Its operations are highly energy intensive, making access to reliable and competitively priced electricity essential for continued production.
Negotiations over power supply arrangements have stretched on for several years, reflecting the complexity of balancing national energy policy, infrastructure constraints and the commercial realities of running a large scale smelting operation. Despite repeated engagements, the parties were unable to reach terms that would allow the smelter to operate viably in the current environment.
Placing the facility under care and maintenance means that production will be suspended while essential systems are preserved, allowing for a potential restart if conditions improve in the future. However, the decision raises concerns about job security, downstream economic impacts and Mozambique’s attractiveness as a destination for large scale industrial investment.
Industry analysts note that the situation highlights broader challenges facing energy dependent industries across parts of Africa, where power availability, pricing and long term certainty remain critical constraints. For Mozambique, the Mozal outcome may prompt renewed reflection on how to structure energy agreements that protect national interests while supporting strategic industries.
While discussions could potentially resume at a later stage, the immediate priority will be managing the economic and social implications of the smelter’s suspension. The coming months will be closely watched to see whether a breakthrough can still be achieved that allows Mozal to return to full operation and retain its role as a cornerstone of Mozambique’s industrial landscape.
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