Africa-Press – Mozambique. The Confederation of Economic Associations (CTA) of Mozambique has urged that the suspension of Mozal, the country’s largest industry, be avoided “at all costs,” warning of unemployment and the bankruptcy of small businesses.
“Avoiding the closure of the smelter at all costs must be a shared objective, given that such a scenario would bring severe economic and social consequences, including the bankruptcy of various national small businesses and the mass dismissal of workers,” said Álvaro Massingue, president of the CTA, the country’s largest business association.
Massingue, speaking during the CTA’s activity review event held in Maputo, argued that it is necessary to identify “balanced solutions” to safeguard the interests of both the Mozambican State and investors, considering Mozal a “strategic asset” for the country’s economy.
“We also believe that the renewal of the current contract, for an additional period of six to twelve months, could create the necessary space for in-depth negotiations and the building of solid, lasting, and sustainable agreements in the medium and long term, based on a clear logic of mutual gains,” Massingue added.
The president of the CTA also expressed the willingness of business leaders to contribute their technical expertise to the team already established by the Government to foster dialogue that brings “solutions based on dialogue, trust, and predictability.”
Regarding the CTA annual activity review, the business representative stated that Mozambique’s private sector experienced a “slight improvement” in the macroeconomic environment, despite persistent challenges that led to an economic stagnation in the third quarter of 2025, at least 52%, compared to 30% in 2024, reflecting the “urgency of structural reforms” capable of unlocking the country’s potential.
Mozal purchases almost half of the electricity produced in Mozambique and accounts for at least 3% of the country’s Gross Domestic Product (GDP).
The Mozambican Government said on Tuesday that a team is currently working to ensure Mozal’s future does not harm any of the parties involved, following South32’s latest announcement of the suspension of activities.
The management of Australian company South32 announced on Tuesday that Mozal, Mozambique’s largest industry, will suspend activities and be placed under care and maintenance from 15 March 2026, due to the lack of a new electricity supply agreement.
According to a statement from South32, Mozal has continued to engage with the Government of the Republic of Mozambique, Hidroeléctrica de Cahora Bassa (HCB), and Eskom to seek sufficient and affordable electricity supply for Mozal beyond March 2026, when the current agreement expires.
The costs of placing Mozal into care and maintenance, including “employee separation costs and termination of contracting arrangements,” are expected to be approximately US$60 million, and ongoing annual care and maintenance costs are expected to be approximately US$5 million.
In August, Mozal announced plans to cut investment and dismiss contracted firms, maintaining operations only until March, citing conditions that do not allow continuity. A few days after this initial announcement, the Confederation of Economic Associations (CTA) of Mozambique revealed that Mozal had abruptly terminated contracts with around 20 companies, leaving at least a thousand unemployed.
The Mozambican Government considered Mozal’s fiscal contribution “extremely low,” expressing interest in reviewing its obligations in this area.
At the time, the Mozambican President stated that the energy tariffs proposed by Mozal would lead to the collapse of Cahora Bassa Hydroelectric Company (HCB), reacting to the threat of the closure of the aluminium smelting unit in 2026.
The electricity supply to Mozal is provided by South African company Eskom, which in turn buys energy from HCB, operating in central Mozambique – 66% of the total produced in 2024 – but the Mozambican Government intends to reverse this situation.
