Africa-Press – Mozambique. Mozal, Mozambique’s largest industrial company, is to proceed with a collective redundancy process following the suspension of operations in March, according to a communication sent to the smelter’s trade union committee. The company directly employs more than 1,000 workers.
At issue, according to the document sent this month to the union committee and made public, is the “collective redundancy consultation process” and the respective compensation package, in the context of the dispute over the supply of electricity to the smelter, located in Maputo province and one of the largest in Africa, which will suspend operations on 15 March.
In the document, Mozal proposes compensation of 6% of annual salary for each year of service for employees earning above seven sector minimum wages, and 40 days’ salary per year of service for the remaining workers.
The aluminium smelter also proposes the payment of a professional retraining allowance of 110,000 meticais (€1,450), the maintenance of the health insurance plan for six months after termination of contract, and a performance bonus for the 2026 financial year, which ends in March, with proportional payment calculated at 100% performance.
Among other compensations, Mozal plans to pay pregnant workers an additional six months of basic salary.
Australia’s South32 confirmed yesterday that it will suspend operations at the Mozal aluminium smelter within a month, despite Government attempts to overcome the dispute over electricity tariffs.
“It will move into care and maintenance in March 2026 due to the inability to secure sufficient and affordable electricity supply. We are working closely with our employees and partners during this transition,” said Graham Kerr, Chief Executive of South32, Mozal’s main shareholder, after presenting the group’s results. He described the decision as final and said it has already resulted in the recognition of an impairment of US$372 million (€313 million).
Mozambique’s Minister of Energy, Estêvão Pale, said this week in Cape Town that the Government is trying to prevent the suspension of Mozal’s operations, one of the largest smelters in Africa, which supports more than 4,000 direct and indirect jobs on the outskirts of Maputo.
“There are discussions on the matter. The Government is doing everything necessary to ensure that the plant does not go into maintenance,” said Estêvão Pale, speaking to journalists on the sidelines of the African Mining Indaba.
Australia’s South32 confirms wind-down of Mozambique’s Mozal plant after profit beat – Reuters
South32’s management announced in December, in a statement, that Mozal would suspend operations and enter into maintenance from 15 March 2026, due to the absence of a new electricity supply agreement.
South32 acknowledged that it is in discussions with the Government, Hidroeléctrica de Cahora Bassa (HCB) and South Africa’s Eskom to secure “sufficient and affordable electricity” until the suspension in March, when the current energy supply agreement expires.
It added that maintenance costs, including contract terminations, are around US$60 million (€51 million), with ongoing annual care and maintenance costs of approximately US$5 million (€4.2 million).
Mozal purchases almost half of the electricity produced in Mozambique — essentially from HCB — and accounts for an estimated at least 3% of GDP.
On 18 August, Mozambique’s President, Daniel Chapo, stated that the energy tariffs proposed by Mozal would lead to the collapse of HCB, reacting at the time to the threat of closure.
Electricity supply to Mozal is provided by Eskom, which in turn purchases power from HCB — 66% of the total produced in 2024 — but the Mozambican Government intends to reverse this situation. Lusa reported in February 2024 that, from 2030 onwards, the Mozambican Government intends to repatriate for domestic use the electricity it has exported from HCB to South Africa since 1979, as set out in the Energy Transition Strategy.
