Africa-Press – Mozambique. Mozambique’s main trade union federation, the OTM, warned today that the suspension of Mozal’s operations would represent an “earthquake”, given its weight in the national economy and the scale of redundancies involved, as it is the country’s largest industrial company and one of the biggest aluminium smelters in Africa.
“If this omen materialises, we will be facing a kind of national earthquake, the magnitude of which will be felt immediately, since this multinational contributes significantly to GDP [Gross Domestic Product], at approximately 4%, being one of the largest industries in the country, driving exports and generating thousands of direct and indirect jobs,” said the secretary-general of the Organização dos Trabalhadores de Moçambique – Central Sindical (OTM-CS), Damião Simango.
The warning, delivered during the first ordinary plenary session of the Labour Consultative Commission (CCT) in Maputo, comes after Mozal, Mozambique’s largest industrial company, informed the company’s trade union committee this month of its intention to proceed with collective redundancies, in the context of the suspension of operations scheduled for 15 March, due to the dispute over electricity tariffs to be supplied to the aluminium smelter.
“This conflict, if poorly managed, could expose the structural fragility of our economic model, where there is a clear dependence on megaprojects, with limited domestic integration, an absence of a local value chain and industrial policy that confuses tax incentives with sustainable development,” Damião Simango declared.
The union leader also warned that workers cannot be turned into an adjustment variable in economic disputes, stressing that thousands of jobs are at stake — estimated at around 5,000 — as well as household incomes.
“We urge the Government not to be a mere spectator in the negotiating disputes, but to assume its constitutional responsibility and ease the cost of living for Mozambicans,” he added.
Mozambique: Mozal begins collective redundancy process ahead of care and maintenance shutdown
Lusa reported on 12 February that Mozal will proceed with collective redundancies as part of the suspension of operations in March, according to a communication made to the smelter’s trade union committee, as the company directly employs more than 1,000 workers.
According to the document sent this month to the trade union committee, the issue concerns the “collective redundancy consultation process” and the respective compensation package, in the context of the dispute over electricity supply to the smelter, installed in Maputo, which will suspend operations on 15 March.
In the document, Mozal proposes compensation of 6% of annual salary for each year of service for those earning above seven sectoral minimum wages and 40 days’ salary per year of service for the remaining workers, among other support measures.
Australian company South32 confirmed on the same day that it will suspend operations at the Mozal aluminium smelter within a month, despite Government attempts to overcome the dispute over energy 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, describing the decision as final and noting that it has already led to the recognition of an impairment of US$372 million (€313 million).
South32 also acknowledged that it continues to engage in dialogue with the Government, Hidroeléctrica de Cahora Bassa (HCB) and South African energy company Eskom to secure “sufficient and affordable electricity” until the suspension in March, when the current power supply agreement expires.
Mozal purchases nearly half of the electricity produced in Mozambique, essentially from HCB.
On 18 August, Mozambican President Daniel Chapo stated that the energy tariffs proposed by Mozal would lead to the collapse of HCB.
Source: Lusa
