South32 plans to write down the value of its 63.7% stake in the Mozal Aluminium Smelter in Mozambique due to unresolved electricity supply issues. Negotiations with Mozambique’s state-owned hydroelectric provider Hidroeléctrica de Cahora Bassa (HCB) and South Africa’s Eskom have failed to yield an affordable electricity agreement beyond March 2026, leading to increased uncertainty about the smelter's long-term viability. Mozal contributes approximately 3% of Mozambique’s GDP and employs thousands.
HCB’s recent warnings about potential power generation limitations caused by drought conditions have further complicated negotiations. Despite improved production in recent months—rising 12% year-on-year to 265,000 tonnes in the nine months ending March 2025—South32 reported a 9% decline in total production for FY2024, to 314,000 tonnes, due to ongoing operational and power disruptions. The company expects to recognize an impairment charge in its 2025 financial results, with details to be disclosed after completing the assessment.