4 days ago
South32 threatens to shut Mozambique aluminium smelter as power talks drag on
Australia's South32 on Thursday flagged a $372m (R6.53bn) impairment on its Mozambique aluminium smelter which the miner said it was preparing to mothball as it may not be able to secure affordable power when its supply agreement ends in 2026.
The diversified miner has been in protracted negotiations with Mozambique's government over a power agreement that is set to expire in March. It warned in July that it may face an impairment at the smelter during fiscal 2025 and was reviewing production after failing to secure affordable power.
"You've got to have a business that can make money through the cycle and at least be cash flow positive and give you some return to your shareholders," CEO Graham Kerr told Reuters.
"The current offer on the table would make us cash flow negative every single month, every single day," he said.
Given care and maintenance was the most likely scenario, South32 said in an exchange filing it would curtail activities such as pot relining and would limit further investment in the operations. The company's shares fell more than 5%.
