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Yahoo
2 days ago
- 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
3 days ago
- 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
3 days ago
- 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.
