Africa-Press – Mozambique. Mozambican President Daniel Chapo on Thursday called for “responsible and socially fair solutions” after Mozal, the country’s largest industrial enterprise, signalled it will proceed with a collective redundancy process and suspend operations in March.
“We are committed to finding responsible and socially fair solutions in light of the decision announced by Mozal to close its operations next March,” Chapo said during a reception in Maputo for the diplomatic corps accredited to the country.
Mozal will move forward with a collective redundancy process as part of the suspension of operations in March, due to a dispute over electricity tariffs, according to a communication sent to the smelter’s trade union committee, which directly employs more than 1,000 workers, Lusa reported on 12 February.
At issue is the “collective redundancy consultation process” and the respective compensation package, within the context of the dispute over electricity supply to the smelter, which has been operating in Maputo since the 1990s and is one of the largest in Africa.
For the Mozambican President, “this is a serious and ongoing dialogue that takes into account the overall social impact on thousands of Mozambican workers and families directly or indirectly linked to this enterprise”.
The Australian company South32 recently confirmed that it will suspend operations at the Mozal aluminium smelter within a month, despite the Government’s efforts to overcome the dispute over electricity tariffs.
“It will transition to 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 Officer of South32 and the main shareholder in Mozal, after presenting the group’s results. He described the decision as final and noted that it has already led to an impairment of US$372 million (€313 million).
Mozambique’s Minister of Energy, Estêvão Pale, had said days earlier that the Government was attempting to prevent the suspension of Mozal’s operations, one of the largest smelters in Africa, which accounts for more than 4,000 direct and indirect jobs.
Mozambique: Mozal begins collective redundancy process ahead of care and maintenance shutdown
South32 previously stated that it was in discussions with the Government, Hidroeléctrica de Cahora Bassa (HCB) and South African utility Eskom to secure “sufficient and affordable electricity” until the suspension in March, when the current power supply agreement expires.
It added that maintenance costs, including contract terminations, are estimated at around US$60 million, with ongoing annual care and maintenance costs of approximately US$5 million.
Mozal purchases nearly half of the electricity produced in Mozambique – essentially from HCB – and is estimated to account for at least 3% of GDP.
On 18 August, the Mozambican President stated that the electricity tariffs proposed by Mozal would lead to the collapse of HCB, already responding 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 total production in 2024 – but the Government intends to reverse this situation. Lusa reported in February 2024 that the Government plans to repatriate, from 2030 onwards, for domestic use, the electricity exported from HCB to South Africa since 1979, as set out in the Energy Transition Strategy.
Source: Lusa
