Australian diversified miner South32 reaffirmed it would put its Mozambique aluminum plant on care and maintenance next month after a drought hit power supply, as it posted a higher first-half profit that beat analysts’ estimates on Thursday.
The announcement came days after Mozambique’s Energy Minister Estevao Pale said “the government is doing everything that is required to make sure that the (Mozal) plant doesn’t go into maintenance.”
South32 last year took a $372 million impairment on the business because it had not been able to secure affordable power after March 2026, given the drought’s impact on Mozambique’s hydroelectric power utility. A reasonably priced deal with back-up provider Eskom, a South African utility, could not be reached.
“Unfortunately … the reality is we’re running out of things in the next week or so, of pitch and coke, and even if we found a power contract today, that could not be delivered to us in time to keep the plant running. So we’re definitely heading for care and maintenance,” South32’s outgoing CEO Graham Kerr said on an earnings call.
In Mozambique, the miner employs 2,000-plus people directly, another 2,000 contractors, and the plant accounts for a third of the country’s manufacturing jobs, he said.
Alumina that would have been used by the smelter will likely be routed to the Middle East, Kerr added.
