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Daily Maverick
27-07-2025
- Business
- Daily Maverick
Mozambique's Cahora Bassa Dam expansion plan offers Eskom a fresh clean energy option
The Mozambican government-owned hydroelectric power company is looking at Eskom as a potential customer for the additional 1,245MW generation capacity that it plans to add to its existing plant at the Cahora Bassa Dam. Eskom is already the biggest client of the Hidroeléctrica de Cahora Bassa (HCB), the company that operates the Cahora Bassa Dam plant, with about 60% of the power generated at the dam travelling more than 1,400km on two parallel power lines between Cahora Bassa in Songo, northern Mozambique and the Apollo substation near Pretoria. Cahora Bassa has a 2,075MW generation capacity, and the Mozambican government is in discussions with the World Bank to raise money for the expansion of the dam's northern bank and the construction of a new hydropower plant at the Mphanda Nkuwa Dam. The latter dam is downstream from Cahora Bassa, also along the same Zambezi River, and is expected to generate 1,500MW of clean energy. The expansion of the Cahora Bassa Dam scheme has received the backing of the World Bank and will increase generation capacity through the installation of three turning turbines – each generating 415MW. The projects are estimated to cost more than $6-billion. With Eskom under pressure to keep the grid stable while trying to meet obligations to use cleaner energy sources, the power utility's spokesperson Daphne Mokwena told Daily Maverick that HCB's plans were in line with Eskom's mandate. 'One of Eskom's mandates is to ensure a reliable, sustainable and clean energy grid for the country. Eskom will review all HCB plans for future growth and give feedback once all the relevant details have been presented,' she said. Mozambique has its own challenges as it has to meet its domestic electricity demand and has set a target of 2030 to meet this need. According to the World Bank 2023 figures, only 36% of the Mozambican population had access to electricity, compared with 87.7% in South Africa. In February 2024, Bloomberg reported – based on an unpublished energy transition strategy – that the Mozambican government intended to end the partnership with Eskom when the contract expired in December 2030. Eskom said talks on the matter were yet to be concluded. Said Mokwena: 'As the discussions are ongoing, there has been no conclusion on this matter. Eskom is therefore not able to comment on this question at this stage'. However, Mokwena stressed that while Eskom continues to buy power from HCB, the utility 'will continue to rely on its own generation fleet'. 'Notably, the returned 800MW from Medupi Unit 4, the additional new 800MW capacity from Kusile Unit 6, and the planned return of 930MW from Koeberg Unit 1 by August 2025 will significantly boost available capacity,' she said. The 50-year-old Cahora Bassa Dam scheme is a Mozambican government flagship and was showcased to World Bank President Ajay Banga, who visited Mozambique last week. Banga was the guest of Mozambican President Daniel Chapo, who is driving the development of Mozambique's untapped energy sources. The 48-year-old Chapo (the governing party, Frelimo's, candidate) was elected president following the disputed October 2024 elections. The development of the war-ravaged country is at the centre of his plans. Ambitious renewable energy plans Chapo said the main objective of the World Bank's visit was to identify areas of possible investment in the country's energy plans. 'Mozambique has a geographic location that allows for wind farms, so we are currently working with the World Bank Group, through the IFC (International Finance Corporation) which is part of the World Bank Group. 'We can have a public-private partnership, who can come and invest in this entire energy matrix we're talking about – producing electricity through hydroelectric plants, solar plants, gas plants, and also wind farms,' said Chapo. Speaking after a tour of Cahora Bassa, Banga said Mozambique had the potential of becoming the 'energy powerhouse' of southern Africa. 'Frankly, in this part of Africa, nobody has the capacity or capability to do what can be done with the assets of this country. 'We are discussing with the government of Mozambique the idea of investing in another 1,500MW downstream from (Cahora Bassa). 'And then in the meantime, we're also doing some investing in solar capacity, 400MW. And then (Chapo) has some master plans, which I think are even more interesting in terms of adding more capacity (at Cahora Bassa) and renovating this plant and then adding further downstream,' said Banga. Cahora Bassa is a major contributor to the Mozambican economy. It generated $547-million in revenue in 2024 and contributed $302-million to the southern African country's fiscus in the same year. HCB CEO Tomás Matola said that while they continued to make a major contribution to the Mozambican economy, the age of the plant was a threat to its revenue plans. He told the World Bank's Banga that they needed to refurbish Cahora Bassa's generators to future-proof the plant. Said Matola: 'From the supply side, our big challenge is because of the age of our equipment. It is 50 years old, so all our equipment is obsolete, so now we need to do a deep rehabilitation of our power plant and substations.' Southern Africa presently has a shortage of 10,000MW, while Mozambique plans to increase its power generation for the benefit of the domestic and the regional market. 'In Mozambique, we do have a challenge of electrification of all the country… So we have increasing demand from the domestic market, but also the regional market,' said Matola. 'As we need to diversify our power matrix, we have a project for producing 400MW of photovoltaic power. We believe that by 2027, we can start building this project,' said Matola, adding that HCB's vision was to generate 4,000MW of clean energy by 2034. The plans for the 400MW solar power plant include the construction of two solar farms with 200MW generation capacity each. Climate change threat to cleaner energy projects While there is a global drive towards renewable energy and less reliance on fossil fuel energy sources, such as coal, cleaner energy sources are not without challenges. For instance, Cahora Bassa's generation capacity has been adversely affected by the drought that has gripped countries along the Zambezi River. The dam's levels are currently at 25%, meaning that water management techniques have to be applied to maintain the flow through the five generators – thus reducing power generation. According to engineers at HCB, that is the lowest level the dam has reached in its 50-year history. That means Eskom has been getting less power from the plant. This was confirmed by Eskom spokesperson Daphne Mokwena, who said that the power utility had received 45% less electricity from Cahora Bassa than the previous year. 'Cyclically, southern Africa is affected by droughts, and Eskom's supply from HCB has been affected. During the droughts, Eskom relies on its own generation fleet. 'Eskom is receiving less power from HCB as compared to the previous year, due to the drought currently affecting the SADC region. The average loss of power is 45% when compared to last year,' said Mokwena. Cahora Bassa Dam is built on the Zambezi River, which flows through six countries – namely Zambia, Angola, Namibia, Botswana, Zimbabwe and then joins the Indian Ocean in Beira, northern Mozambique. The drought in the SADC region has seen levels at Kariba Dam – between Zimbabwe and Zambia – reach an alarming level of about 11% last year. According to the Zambezi River Authority, the Lake Kariba water levels were sitting at 24.3% on 14 July 2025, compared with 11.5% recorded on the same date in 2025. In July 2023, Kariba's levels were at 31%. However, while the levels have improved at Kariba, the benefits have yet to be realised downstream at Cahora Bassa, as the former is not releasing much water as it is still recovering from the lower levels. Fast facts on Cahora Bassa The construction of the dam took place between 1969 and 1974, resulting in the biggest hydroelectric power plant in southern Africa. Power is generated by water passing through five vertical generator units – each producing 415MW and a total of 2,075MW. Eskom is HCB's biggest client, buying 58% of the power generated at the plant, while 39% goes to the Mozambican state-owned energy company – 3% is sold to the Zimbabwean power utility. The staff complement at HCB consists of Mozambican citizens, with 741 permanent workers and 685 seasonal workers. Another 2,000 indirect workers benefit from the plant, through its suppliers. *Source: Hidroeléctrica de Cahora Bassa (HCB) World Bank Group structure The World Bank Group comprises five organisations that specialise in differing areas, namely: The World Bank, whose official name is the International Bank for Reconstruction and Development, which lends to low- and middle-income countries; The International Development Association, which also lends to low-income countries The International Finance Corporation, which lends to the private sector; The Multilateral Investment Guarantee Agency, which 'encourages' private companies to invest in foreign countries; and The International Centre for Settlement of Investment Disputes, which mediates disputes between private investors and foreign countries. DM Sibusiso Ngalwa is a journalist, a cabbage farmer and a breeder of boer goats. His trip was sponsored by the Hidroeléctrica de Cahora Bassa (HCB), the company that operates the Cahora Bassa plant.
Yahoo
15-07-2025
- Business
- Yahoo
South32's Mozambique aluminium smelter faces uncertainty amid power supply issues
Australian mining and metals company South32 has raised concerns regarding the future of its Mozal aluminium smelter in Mozambique, citing potential power supply issues and the inability to secure affordable power prices beyond March 2026, as reported by Reuters. The company has been in negotiations with the primary power provider, Hidroeléctrica de Cahora Bassa (HCB), since 2019 to renew a power tariff set to expire in March 2026. Under the current agreement, South African utility Eskom is designated to supply power to Mozal when HCB cannot meet the smelter's electricity requirements. However, South32 has indicated that drought conditions could impact HCB's hydroelectric power generation capacity, leading to increased uncertainty about the future electricity supply to Mozal. As a result, the production guidance for the financial year 2026 is under review. Located 20km west of Maputo, construction of Mozal Aluminium commenced more than two decades ago. With a $2bn investment, Mozal Aluminium stands as the largest private investment in Mozambique. South32 holds a 63.7% share in Mozal Aluminium, having increased its stake by 16.6% in May 2022. The Industrial Development Corporation of South Africa owns 32.4%, while the Government of the Republic of Mozambique holds a 3.9% stake through preference shares. Mozal's production reached 314,000 tonnes (t) of aluminium in the 2024 financial year. The smelter also supports the country's downstream aluminium industry by supplying liquid metal to Midal Cables, which manufactures products for domestic and export markets. In early July 2025, South32 entered a binding agreement to divest its Cerro Matoso mine to a subsidiary of CoreX Holding, following a strategic review prompted by shifts in the nickel market. "South32's Mozambique aluminium smelter faces uncertainty amid power supply issues" was originally created and published by Mining Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
IOL News
14-07-2025
- Business
- IOL News
Mozal Aluminium smelter's future uncertain as South32 struggles with electricity negotiations
South32 operates Mozal Aluminum in Mozambique, whose saleable production for the year to June 2024 decreased by 9% to 314 000 tons.2025as the smelter progressed a recovery plan. The group is reviewing its production guidance for 2025 due to an inability to reach agreement on a new electricity agreement. Image: Supplied South32 will report an impairment from its Mozal Aluminium Smelter in Mozambique due to an inability to negotiate a new electricity agreement over the past six-years. The announcement appeared to send South32's share price reeling Monday morning, with its price down by 4.43% to R34.92. A year ago, the share was trading at R44.75. Mozal Aluminium is located near Maputo, Mozambique. The smelter produces high-quality primary aluminium for domestic and export markets. Mozal contributes approximately 3% of Mozambique's GDP and is a significant industrial employer, providing jobs for thousands of employees and contractors. South32 said in a statement that its production guidance from the plant was under review, and an associated impairment expense would be recognised in the group's 2025 financial results. Electricity is supplied to Mozal under an agreement that expires in March 2026. Historically, the majority of electricity for Mozal has been generated in Mozambique by the hydro-electric power generator, Hidroeléctrica de Cahora Bassa (HCB), 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 requirements. '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,' South32 said. HCB had also recently indicated that drought conditions had the potential to impact its electricity generation and capacity to deliver sufficient hydro-electric power to Mozal. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ 'These factors have resulted in increased uncertainty regarding future electricity supply to Mozal,' the group said. '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,' the group said. It said they would continue to engage with the Mozambique government, HCB, and Eskom to secure affordable electricity supply to operate Mozal beyond March 2026 and maintain its significant contribution to the economy of Mozambique. South32 holds 63.7% of Mozal, the Industrial Development Corporation of South Africa holds 32.4%, and the Mozambique government holds 3.9%. Visit:
West Australian
13-07-2025
- Business
- West Australian
Power deal threatens future of South32's Mozal aluminium smelter in Mozambique
There is a growing risk South32 will be forced to pull the plug on its Mozal aluminium operations in Mozambique early next year as the diversified miner races against the clock to secure a new electricity supply deal. 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.
New Straits Times
16-05-2025
- Business
- New Straits Times
Hextar's associate company wins RM427.50mil contract
KUALA LUMPUR: Hextar Capital Bhd's (HCB) associate company Transgrid Ventures Sdn Bhd (TGV) has won a RM427.50 million Tenaga Nasional Bhd (TNB) contract to establish a transmission main intake (PMU) 500/275 kilovolt (kV) gas-insulated substation (GIS) in Gurun East, Kedah. In a Bursa Malaysia filing today, HCB said the contract, effective May 13, 2025, will end 730 days from the commencement date. "The contract will not have any effect on the issued share capital and shareholding structure of the company. However, it is expected to contribute positively to the company's future earnings and net assets per share upon its commencement," it said. HCB managing director Johnson Chang said the project marks another strategic milestone for TGV, reinforcing its capabilities in delivering large-scale, mission-critical infrastructure projects within the energy sector. "It also reflects the confidence that TNB has in our engineering capabilities and further solidifies our role in supporting the national grid and the country's energy development," he added. Meanwhile, TGV chief executive officer and managing director Datuk Seri Nantha Kumar said it will be the first 500kV GIS project in Malaysia, and TGV is proud to be given the opportunity by TNB to design and build this maiden project. "It is a significant milestone that reaffirms our capabilities and track record in high-voltage substation infrastructure," he said. HCB is a diversified company with operations in manufacturing, engineering services and trading, telecommunication network infrastructure solutions, power generation and transmission, construction and project management and money lending.
