Mining company South32 has warned of potential power supply disruptions at its Mozal Aluminium smelter in Mozambique, citing tariff disputes and reduced hydroelectric availability from Cahora Bassa. The facility’s reliance on Eskom during shortfalls raises the prospect of increased export demand on South Africa’s power system, particularly during periods of domestic grid constraint.
Mozal contributes approximately 3% to Mozambique’s GDP and is a major industrial power consumer. Under the current agreement, Eskom supplies electricity to the smelter when Cahora Bassa is unable to meet demand. Cahora Bassa, which is majority state-owned, has now cautioned that ongoing drought conditions could further limit its generation output.
The current power supply agreement for Mozal is set to expire in March 2026. South32 said it has not been able to agree on a new tariff and will record an impairment in its 2025 financial year results. Production guidance for its 2026 financial year is under review.
Mozal is co-owned by South32 (63,7%), the Industrial Development Corporation of South Africa (32,4%) and the government of Mozambique (3,9%).
