South32 indicates that the Mozambican aluminum smelter is impaired

The Mozal aluminum smelter in Mozambique has been impaired, according to a new tab opened by Australian diversified miner South32 (S32.AX) on Monday. The company also stated that its output was being reviewed since it was unable to secure reasonable power tariffs after March 2026.

According to South32, discussions on a power tariff that is set to expire in March 2026 have been ongoing for six years with the Mozambican government’s majority-owned hydroelectric power company, Hidroeléctrica de Cahora Bassa (HBC).

It has an agreement to take over power from the provider in the event that it is unable to obtain power from Eskom, the main supplier in South Africa.

“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,” South32 said in a filing with the market.

Because of these issues, there is now more uncertainty about Mozal’s future electrical supply. Mozal’s FY26 production projection is being reviewed due to the uncertainties surrounding sustained operations after March 2026.

314,000 tons of aluminum were produced in Mozal during the fiscal year 2024. July 21 is the date of the miner’s quarterly operations review.