{"id":55168,"date":"2024-02-04T09:33:13","date_gmt":"2024-02-04T09:33:13","guid":{"rendered":"https:\/\/www.africa-press.net\/mozambique\/all-news\/mozambique-seeks-to-end-50-year-south-africa-hydropower-pact"},"modified":"2024-02-04T09:46:36","modified_gmt":"2024-02-04T09:46:36","slug":"mozambique-seeks-to-end-50-year-south-africa-hydropower-pact","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/mozambique\/all-news\/mozambique-seeks-to-end-50-year-south-africa-hydropower-pact","title":{"rendered":"Mozambique seeks to end 50-year South Africa hydropower pact"},"content":{"rendered":"

Africa-Press – Mozambique. <\/strong><\/span>Mozambique plans to end half a century of hydropower supply to South Africa\u2019s state-owned electricity utility, raising risks for the continent\u2019s most industrialized economy and threatening the viability of Africa\u2019s second-biggest aluminium smelter.<\/p>\n

In the country\u2019s yet-to-be published energy transition strategy, a copy of which Bloomberg has seen, Mozambique details the plan to secure the 1,150 megawatts of power it sells to South Africa from its Cahora Bassa plant for its own use.<\/p>\n

\u201cThe main short-term hydro priority is the repatriation of electricity from Hidroele\u0301ctrica de Cabora Bassa currently exported to South Africa\u201d when the contract ends on Dec. 31, 2030, the government said in the strategy document. Mozambique\u2019s energy ministry didn\u2019t respond to a request for comment.<\/p>\n

The decision creates a headache for both South Africa \u2014 which is battling power cuts that are holding back economic growth \u2014 and South32 Ltd., which operates the Mozal aluminium smelter near Mozambique\u2019s capital, Maputo, but uses electricity bought from South African utility Eskom Holdings SOC Ltd.<\/p>\n

South32 needs about 900 megawatts of electricity for Mozal\u2019s output of aluminium, which the company markets as having been made with clean energy.<\/p>\n

Because Mozambique\u2019s grid isn\u2019t linked nationally, Mozal \u2014 which produced 345,000 tons last year \u2014 can\u2019t get direct power supply from Cahora Bassa ( HCB ).<\/p>\n

Instead, the 2,075-megawatt plant \u2014 Africa\u2019s third-biggest for hydropower \u2014 sends electricity along 1,400 kilometres (870 miles) of transmission lines to Eskom in South Africa, which then sells power to Mozal. The sales arrangement has been in place since 1979, when the last of the turbines was completed.<\/p>\n

Past disruptions to supply \u2014 for example, when violent storms have toppled transmission lines \u2014 have worsened power cuts in South Africa.<\/p>\n

\u201cHCB\u2019s electricity is cheap and clean,\u201d the government said in the strategy document. \u201cImportant decisions will have to be made regarding HCB\u2019s clean-energy trading end-destination.\u201d<\/p>\n

Mozambique plans to push for its renewable energy to be used in industrial parks to add value to its production of so-called green minerals such as lithium and graphite.<\/p>\n

Eskom said it\u2019s unaware of the desire to not renew the contract.<\/p>\n

Should the contract not be renewed, Eskom may need to buy power from elsewhere and South32 will need to find another source of electricity, preferably from renewable sources. That\u2019s so it won\u2019t be subject to European Union taxes on exports under the bloc\u2019s carbon border adjustment mechanism, which levies duties on carbon-intensive goods such as fertilizers, cement, iron, steel, and aluminum imported into the bloc.<\/p>\n

No alternative<\/b><\/p>\n

South32\u2019s supply deal with Eskom expires in 2026. The company has formed a working group with Eskom, HCB and the Mozambican government to extend the contract \u201cas there are no viable alternative suppliers of renewable energy at the necessary scale,\u201d it said in its 2023 sustainable-development report.<\/p>\n

While Mozal buys power from Eskom, which produces almost all of its power from coal, there\u2019s no guarantee that it\u2019s the same electricity transmitted from Cahora Bassa. South32 has also proposed ring-fencing power from South Africa\u2019s sole nuclear plant for its Hillside aluminium smelter in that country.<\/p>\n

South32 didn\u2019t respond to a request for further comment. Mozal is 63.7% owned by South32, 24% held by South Africa\u2019s Industrial Development Corp., 8.4% owned by Mitsubishi Corp. and the Mozambican government holds 3.9%.<\/p>\n

Little benefit<\/b><\/p>\n

\u201cTo avoid a situation where the country\u2019s largest electricity producer, the Cahora Bassa hydroelectric plant, exports energy to the region while the largest consumer imports Mozambique needs a unified electricity grid,\u201d the government said in the document.<\/p>\n

The Mozal plant employs too few people and benefits to the government in the form of taxes are limited, according to a person familiar with the government\u2019s thinking.<\/p>\n

Mozal employs about 1,000 people, accounts for 4% of Mozambique\u2019s gross domestic product and paid $16 million in royalties and dividends to the government in South32\u2019s last financial year, the company said in its sustainability report.<\/p>\n

Eskom said it\u2019s pursuing the option of importing power from other sources. The utility scrapped a plan to import an additional 100 megawatts of electricity from Mozambique recently because of disagreements over price.<\/p>\n

For More News And Analysis About Mozambique<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Mozambique. Mozambique plans to end half a century of hydropower supply to South Africa\u2019s state-owned electricity utility, raising risks for the continent\u2019s most industrialized economy and threatening the viability of Africa\u2019s second-biggest aluminium smelter. In the country\u2019s yet-to-be published energy transition strategy, a copy of which Bloomberg has seen, Mozambique details the plan […]<\/p>\n","protected":false},"author":84,"featured_media":55167,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[233,281,283],"class_list":["post-55168","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-mozambique","tag-mozambique"],"yoast_head":"\nMozambique seeks to end 50-year South Africa hydropower pact - Mozambique<\/title>\n<meta name=\"description\" content=\"Mozambique plans to end half a century of hydropower supply to South Africa\u2019s state-owned electricity utility, raising r ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/mozambique\/all-news\/mozambique-seeks-to-end-50-year-south-africa-hydropower-pact\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Mozambique seeks to end 50-year South Africa hydropower pact\" \/>\n<meta property=\"og:description\" content=\"Mozambique plans to end half a century of hydropower supply to South Africa\u2019s state-owned electricity utility, raising r ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/mozambique\/all-news\/mozambique-seeks-to-end-50-year-south-africa-hydropower-pact\" \/>\n<meta property=\"og:site_name\" content=\"Mozambique\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2024-02-04T09:33:13+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-02-04T09:46:36+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/mozambique\/sites\/64\/2024\/02\/sm_1707027208.498365.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1435\" \/>\n\t<meta property=\"og:image:height\" content=\"875\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/mozambique-seeks-to-end-50-year-south-africa-hydropower-pact#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/mozambique-seeks-to-end-50-year-south-africa-hydropower-pact\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Mozambique seeks to end 50-year South Africa hydropower pact\",\"datePublished\":\"2024-02-04T09:33:13+00:00\",\"dateModified\":\"2024-02-04T09:46:36+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/mozambique-seeks-to-end-50-year-south-africa-hydropower-pact\"},\"wordCount\":704,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/mozambique-seeks-to-end-50-year-south-africa-hydropower-pact#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/mozambique\/sites\/64\/2024\/02\/sm_1707027208.498365.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Mozambique\",\"Mozambique\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/mozambique\/all-news\/mozambique-seeks-to-end-50-year-south-africa-hydropower-pact#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/mozambique-seeks-to-end-50-year-south-africa-hydropower-pact\",\"url\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/mozambique-seeks-to-end-50-year-south-africa-hydropower-pact\",\"name\":\"Mozambique seeks to end 50-year South Africa hydropower pact - 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