Mozambique Aluminium (Mozal), Mozambique’s sole aluminium smelter and second-largest African smelter, is on the brink of shutdown in March 2026 if its power supply agreement comes to an end.

Following discussions with the Government of Mozambique and Hidroeléctrica de Cahora Bassa (HCB), South32, which owns a 63.7% stake in the 580ktpy Mozal operation, determined that there is insufficient confidence that the smelter will secure adequate and affordable electricity beyond March 2026. Under the current arrangement, HCB serves as Mozambique’s primary power supplier, with South Africa’s Eskom providing supplementary electricity when HCB cannot meet the smelter’s needs.

As a result, Mozal’s FY26 production guidance is expected to decrease by 32% y-o-y to 240kt, due to limited investment, with pot relining to be ceased and associated contractors to be stood down starting August 2025. If sufficient and affordable electricity is not secured, Mozal will be placed on care and maintenance at the end of the current agreement.

This change in operational status will have an array of effects on aluminium and its feedstock trade flows. Significant impact is expected within the alumina industry; in 2024, Mozal sourced all its alumina imports, totalling 1.02Mt, from Australia, primarily from the Worsley Alumina refinery. With reduced domestic alumina supply in Australia following the closure of the 2Mtpy Kwinana refinery, this alumina may be redirected for domestic use in the Australian aluminium industry.

Minimal to no impacts are, however, expected on the trade of aluminium fluoride (AlF3) which is used as a flux in primary aluminium production. Since Mozambique does not have domestic production of AlF3, the smelter imports it from China, with total imports amounting to 2kt in 2024. If the smelter shuts down, the AlF3 will likely be consumed in the domestic Chinese market, given its minimal quantity.

The potential shutdown of Mozal would directly impact the EU’s aluminium industry, as most of its aluminium exports are sent to Europe. In 2024, the Netherlands, Italy, and Germany accounted for 34%, 30%, and 9% of Mozambican unwrought aluminium exports, respectively. This underscores the significance of Mozambican supply to the EU, where import reliance for primary aluminium remains prevalent.

The consequences of a closure would reverberate across the aluminium industry and regional economies, while weakening Africa’s position in the global supply chain, which highlights Mozal’s strategic importance to both Mozambique and international markets.   

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