Power deal threatens future of South32's Mozal aluminium smelter in Mozambique
Years of talks with the southern African nation's government to power the smelter beyond March 2026 have so far failed to yield a deal for the project, which last financial year turned over more than $800 million.
South32 has a 63.7 per cent stake in Mozal, which produced 87,000 tonnes of aluminium in the March quarter.
The Industrial Development Corporation of South Africa holds 32.4 per cent and the Government of the Republic of Mozambique has a 3.9 per cent interest
South32 has kept full-year guidance unchanged at 350,000t.
But on Monday it said guidance for FY26 was now under review because of the uncertainty over a new contract and warned it would book an associated impairment against the value of Mozal in this year's accounts.
The majority of electricity for Mozal has been generated in Mozambique by the Hidroeléctrica de Cahora Bassa, a hydro-electric power generator owned by the Mozambique government.
Under the agreement, electricity from Eskom is supplied to Mozal when HCB is unable to meet all of Mozal's electricity requirements.
South32 said it had been working with the government, HCB and Eskom for the past six years to secure electricity supply once the current contract expires.
'To date, Mozal has been unable to agree an affordable electricity price tariff,' it said.
'HCB has also recently indicated that drought conditions have the potential to impact its electricity generation and capacity to deliver sufficient hydro-electric power to Mozal. These factors have resulted in increased uncertainty regarding future electricity supply to Mozal.
'We are continuing to engage with the Government of the Republic of Mozambique, HCB and Eskom on securing affordable electricity supply to enable Mozal to operate beyond March 2026 and maintain its substantial contribution to the economy of Mozambique.'
In its March-quarter report, South32 said there are currently no viable alternative suppliers of renewable energy at the required scale.
Mozal generated $812m of revenue for South32 for the 2024 financial year, but slumped to an underlying earnings loss of $30m.
The miner last year had to content with the impact of civil unrest in the country following a presidential election in October that sparked protests over claims the result was rigged.
South32 also owns the Hillside aluminium smelter in neighbouring South Africa, which is on track to produce 720,000t this financial year.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
West Australian
2 days ago
- West Australian
South32 prepares to shutter Mozal aluminium smelter in Mozambique as it struggles to secure power deal
South32 will start standing down contractors and prepare to shutter its Mozal aluminium plant in Mozambique, saying it has little confidence it can reach a deal to secure affordable electricity to run the operations. The Perth-headquartered mixed metals miner revealed a month ago it could be forced to pull the plug after years of talks with the southern African nation's government to power the smelter beyond March 2026 failed to deliver an agreement. The majority of electricity for Mozal has been generated in Mozambique by the Hidroeléctrica de Cahora Bassa, a hydro-electric power generator owned by the Mozambique government. Under the agreement, electricity from Eskom is supplied to Mozal when HCB is unable to meet all of the operation's electricity requirements. In an update to the market on Thursday, the miner said talks continued but there appeared little hope of a resolution. 'These engagements do not provide confidence that Mozal will secure sufficient and affordable electricity beyond March 2026,' it said. 'As a result, we will limit investment in Mozal, stopping pot relining and standing down associated contractors starting this month. 'Without access to sufficient and affordable electricity, we expect that Mozal will be placed on care and maintenance at the end of the current agreement.' The smelter last financial year turned over more than $800 million. South32 has a 63.7 per cent stake in the project, which produced 87,000 tonnes of aluminium in the March quarter. The Industrial Development Corporation of South Africa holds 32.4 per cent and the Government of the Republic of Mozambique has a 3.9 per cent interest. South32 said its current financial year share of production was forecast to be about 240,000t, reflecting fewer pots in operation as it stops pot relining and operations continuing only to March 2026. It also expected to book a $US372m ($568m) charge in its FY25 financials, including $US339m of property, plant and equipment. 'The impairment reflects our assessment that the most likely scenario is for Mozal to operate until the end of the current electricity supply agreement and be placed on care and maintenance in March 2026,' South32 said. 'The impairment reduces Mozal's carrying value to $US68m, with the impairment to be excluded from FY25 underlying earnings, in accordance with our accounting policies.'
The Advertiser
07-08-2025
- The Advertiser
Aussie philanthropist awards $300k to African trailblazers fighting poverty
Australian businessman and philanthropist Alex Waislitz has championed three African innovators, awarding them a share of US$300,000 for their work in tackling extreme poverty through his international awards program. The top honour in the 2025 Global Citizen Waislitz Awards, now in their eleventh year, has been awarded to a healthcare entrepreneur from Ghana. Osei Boateng was named the grand prize winner for his work as the founder of the OKB Hope Foundation. The organisation uses mobile health vans to provide primary and preventative care to more than 10,000 people across 80 rural communities, a mission born from Mr Boateng's personal loss of his grandmother and other family members to preventable conditions. The award will enable Mr Boatend to expand his fleet of medical-equipped vans and reach more remote areas. He is joined by two other winners, who each receive US$100,000 to advance their work. Maryanne Gichanga, Kenyan co-founder of AgriTech Analytics, received the "disruptor" award for her AI-powered soil-testing technology that helps smallholder farmers - especially women and youth - dramatically increase crop yields. The award will help Maryanne support 15,000 smallholder farmers a month and reclaim 135,000 hectares of degraded land to help end poverty. The people's choice award went to Nigerian hydrologist Joshua Ichor, whose organisation, Geotek Water Solutions, builds solar-powered water kiosks in conflict-affected communities. Since its 2021 launch, the group has installed more than 1000 water infrastructure and monitoring systems, delivering clean water to more than 100,000 people. The award will enable Mr Ichor to scale up Geotek's work to reach 200,000 people by 2026 and expand into five new regions in Africa. The awards are a partnership between the international advocacy organisation Global Citizen and the Melbourne-based Waislitz Foundation. "Now, 11 years on, I am immensely proud that we have recognised 32 remarkable young leaders from 15 countries whose efforts are creating sustainable, transformative impact in their communities and beyond," Waislitz Foundation chairman and founder Mr Waislitz said. A co-owner of ACM, the publisher of this masthead, Mr Waislitz praised this year's Global Citizen winners for their innovation. "This year's recipients, Osei Boateng, Maryanne Gichanga and Joshua Ichor, exemplify the extraordinary impact and innovation we set out to recognise and support," he said. "I congratulate them and remain committed, along with the Waislitz Foundation, to supporting and growing these awards for many years to come." To date, the Waislitz Foundation has disbursed more than US$2.35million through the awards program, providing critical funding to grassroots leaders who are developing scalable and adaptable solutions to end extreme poverty around the world, including Bangladesh, Colombia, India, Kenya, Malawi, Nepal, Nigeria, Pakistan, Rwanda, South Africa and Uganda. . Australian businessman and philanthropist Alex Waislitz has championed three African innovators, awarding them a share of US$300,000 for their work in tackling extreme poverty through his international awards program. The top honour in the 2025 Global Citizen Waislitz Awards, now in their eleventh year, has been awarded to a healthcare entrepreneur from Ghana. Osei Boateng was named the grand prize winner for his work as the founder of the OKB Hope Foundation. The organisation uses mobile health vans to provide primary and preventative care to more than 10,000 people across 80 rural communities, a mission born from Mr Boateng's personal loss of his grandmother and other family members to preventable conditions. The award will enable Mr Boatend to expand his fleet of medical-equipped vans and reach more remote areas. He is joined by two other winners, who each receive US$100,000 to advance their work. Maryanne Gichanga, Kenyan co-founder of AgriTech Analytics, received the "disruptor" award for her AI-powered soil-testing technology that helps smallholder farmers - especially women and youth - dramatically increase crop yields. The award will help Maryanne support 15,000 smallholder farmers a month and reclaim 135,000 hectares of degraded land to help end poverty. The people's choice award went to Nigerian hydrologist Joshua Ichor, whose organisation, Geotek Water Solutions, builds solar-powered water kiosks in conflict-affected communities. Since its 2021 launch, the group has installed more than 1000 water infrastructure and monitoring systems, delivering clean water to more than 100,000 people. The award will enable Mr Ichor to scale up Geotek's work to reach 200,000 people by 2026 and expand into five new regions in Africa. The awards are a partnership between the international advocacy organisation Global Citizen and the Melbourne-based Waislitz Foundation. "Now, 11 years on, I am immensely proud that we have recognised 32 remarkable young leaders from 15 countries whose efforts are creating sustainable, transformative impact in their communities and beyond," Waislitz Foundation chairman and founder Mr Waislitz said. A co-owner of ACM, the publisher of this masthead, Mr Waislitz praised this year's Global Citizen winners for their innovation. "This year's recipients, Osei Boateng, Maryanne Gichanga and Joshua Ichor, exemplify the extraordinary impact and innovation we set out to recognise and support," he said. "I congratulate them and remain committed, along with the Waislitz Foundation, to supporting and growing these awards for many years to come." To date, the Waislitz Foundation has disbursed more than US$2.35million through the awards program, providing critical funding to grassroots leaders who are developing scalable and adaptable solutions to end extreme poverty around the world, including Bangladesh, Colombia, India, Kenya, Malawi, Nepal, Nigeria, Pakistan, Rwanda, South Africa and Uganda. . Australian businessman and philanthropist Alex Waislitz has championed three African innovators, awarding them a share of US$300,000 for their work in tackling extreme poverty through his international awards program. The top honour in the 2025 Global Citizen Waislitz Awards, now in their eleventh year, has been awarded to a healthcare entrepreneur from Ghana. Osei Boateng was named the grand prize winner for his work as the founder of the OKB Hope Foundation. The organisation uses mobile health vans to provide primary and preventative care to more than 10,000 people across 80 rural communities, a mission born from Mr Boateng's personal loss of his grandmother and other family members to preventable conditions. The award will enable Mr Boatend to expand his fleet of medical-equipped vans and reach more remote areas. He is joined by two other winners, who each receive US$100,000 to advance their work. Maryanne Gichanga, Kenyan co-founder of AgriTech Analytics, received the "disruptor" award for her AI-powered soil-testing technology that helps smallholder farmers - especially women and youth - dramatically increase crop yields. The award will help Maryanne support 15,000 smallholder farmers a month and reclaim 135,000 hectares of degraded land to help end poverty. The people's choice award went to Nigerian hydrologist Joshua Ichor, whose organisation, Geotek Water Solutions, builds solar-powered water kiosks in conflict-affected communities. Since its 2021 launch, the group has installed more than 1000 water infrastructure and monitoring systems, delivering clean water to more than 100,000 people. The award will enable Mr Ichor to scale up Geotek's work to reach 200,000 people by 2026 and expand into five new regions in Africa. The awards are a partnership between the international advocacy organisation Global Citizen and the Melbourne-based Waislitz Foundation. "Now, 11 years on, I am immensely proud that we have recognised 32 remarkable young leaders from 15 countries whose efforts are creating sustainable, transformative impact in their communities and beyond," Waislitz Foundation chairman and founder Mr Waislitz said. A co-owner of ACM, the publisher of this masthead, Mr Waislitz praised this year's Global Citizen winners for their innovation. "This year's recipients, Osei Boateng, Maryanne Gichanga and Joshua Ichor, exemplify the extraordinary impact and innovation we set out to recognise and support," he said. "I congratulate them and remain committed, along with the Waislitz Foundation, to supporting and growing these awards for many years to come." To date, the Waislitz Foundation has disbursed more than US$2.35million through the awards program, providing critical funding to grassroots leaders who are developing scalable and adaptable solutions to end extreme poverty around the world, including Bangladesh, Colombia, India, Kenya, Malawi, Nepal, Nigeria, Pakistan, Rwanda, South Africa and Uganda. . Australian businessman and philanthropist Alex Waislitz has championed three African innovators, awarding them a share of US$300,000 for their work in tackling extreme poverty through his international awards program. The top honour in the 2025 Global Citizen Waislitz Awards, now in their eleventh year, has been awarded to a healthcare entrepreneur from Ghana. Osei Boateng was named the grand prize winner for his work as the founder of the OKB Hope Foundation. The organisation uses mobile health vans to provide primary and preventative care to more than 10,000 people across 80 rural communities, a mission born from Mr Boateng's personal loss of his grandmother and other family members to preventable conditions. The award will enable Mr Boatend to expand his fleet of medical-equipped vans and reach more remote areas. He is joined by two other winners, who each receive US$100,000 to advance their work. Maryanne Gichanga, Kenyan co-founder of AgriTech Analytics, received the "disruptor" award for her AI-powered soil-testing technology that helps smallholder farmers - especially women and youth - dramatically increase crop yields. The award will help Maryanne support 15,000 smallholder farmers a month and reclaim 135,000 hectares of degraded land to help end poverty. The people's choice award went to Nigerian hydrologist Joshua Ichor, whose organisation, Geotek Water Solutions, builds solar-powered water kiosks in conflict-affected communities. Since its 2021 launch, the group has installed more than 1000 water infrastructure and monitoring systems, delivering clean water to more than 100,000 people. The award will enable Mr Ichor to scale up Geotek's work to reach 200,000 people by 2026 and expand into five new regions in Africa. The awards are a partnership between the international advocacy organisation Global Citizen and the Melbourne-based Waislitz Foundation. "Now, 11 years on, I am immensely proud that we have recognised 32 remarkable young leaders from 15 countries whose efforts are creating sustainable, transformative impact in their communities and beyond," Waislitz Foundation chairman and founder Mr Waislitz said. A co-owner of ACM, the publisher of this masthead, Mr Waislitz praised this year's Global Citizen winners for their innovation. "This year's recipients, Osei Boateng, Maryanne Gichanga and Joshua Ichor, exemplify the extraordinary impact and innovation we set out to recognise and support," he said. "I congratulate them and remain committed, along with the Waislitz Foundation, to supporting and growing these awards for many years to come." To date, the Waislitz Foundation has disbursed more than US$2.35million through the awards program, providing critical funding to grassroots leaders who are developing scalable and adaptable solutions to end extreme poverty around the world, including Bangladesh, Colombia, India, Kenya, Malawi, Nepal, Nigeria, Pakistan, Rwanda, South Africa and Uganda. .
AU Financial Review
06-08-2025
- AU Financial Review
African rare earths to feed Australian taxpayer-backed refinery
African rare earths will be shipped to a taxpayer-backed refinery in Western Australia, under a deal struck between the plant's builder, Iluka Resources, and ASX-listed Lindian Resources that supports government efforts to loosen China's grip on critical minerals supply. Iluka would also lend $US20 million ($30.8 million) to Lindian to help pay for the construction of the Kangankunde mine in the landlocked, East African nation of Malawi.
