South32’s Mozal Aluminium Smelter was officially placed under care and maintenance on 15 March.

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South32’s Mozal aluminium smelter has shut, with the second-largest aluminium smelter in the Southern Hemisphere officially placed on care and maintenance this past weekend.

The JSE-listed diversified mining group announced the news on Monday in a SENS announcement, stating that the employee separation costs and contract terminations would amount to $60 million (about R1 billion). Care and maintenance costs will also be $5 million (about R81 million).

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News24 previously reported that the smelter would be shut after 70 stakeholder engagements over six years had failed to secure a new power contract beyond mid-March 2026.

The smelter was previously supplied power by the Cahora Bassa hydroelectric dam (via the state-owned company Hidroeléctrica de Cahora Bassa, HCB) in Mozambique.

However, drought conditions meant the mining group had turned to Eskom to fill in the gaps. The agreement with Eskom has since expired, with the Mozambique government also unable to commit to a new deal. Talks for a new workable agreement with Eskom had also failed.

South32 CEO Graham Kerr said in the announcement: “While this is not the outcome we wanted, we are proud of the history and significant contribution Mozal has made to the local community and the Mozambican economy in its 25 years of operation.”

READ | Budget’s double blow for Eskom: No money for smelters or transmission assets

South32 holds 63.7% of Mozal, the Industrial Development Corporation 32.4%, and the Mozambican government the rest.

The alumina supplied from the Worsley refinery in Australia to Mozal will now be sold to third-party customers at index-linked prices.

Overall, the closure is expected to affect 25 000 direct and indirect jobs in Mozambique and an estimated 3.9% of the country’s GDP.