South32 Mozal aluminium smelter idling set for March 2026 after power deal failure

Mozal aluminium

South32 Mozal aluminium smelter idling will begin in mid-March 2026, after the producer failed to secure a new electricity contract. The move places the Mozambique asset under care and maintenance once the current supply agreement expires. As a result, South32 Mozal aluminium smelter idling adds fresh uncertainty to regional aluminium supply and power-intensive industrial strategy.

Mozal’s production guidance for April 2025 to March 2026 remains unchanged at 240,000 tonnes on a South32-attributable basis. South32 holds a 63.7% share of Mozal aluminium. Meanwhile, the company kept its July 2025 to June 2026 aluminium guidance unchanged at 1.12mn tonnes attributable.

Mozal power supply agreement breakdown drives operational reset

The Mozal power supply agreement became the defining risk factor for continued operations. South32 could not secure a replacement contract beyond the current term. Therefore, the company chose to idle the smelter rather than operate with unpriced power exposure.

Smelters require stable, long-term electricity to remain competitive. However, power negotiations often tighten when grids face shortages or pricing volatility. Consequently, Mozambique aluminium smelter shutdown risk rises when contract renewals fail.

Portfolio impacts and alumina redirection signal commercial shift

South32 produced 311,000 tonnes of aluminium in July to September, the first quarter of its fiscal year. Output rose 4% year on year and 1% quarter on quarter. Meanwhile, production included 181,000 tonnes from Hillside, 93,000 tonnes from Mozal, and 37,000 tonnes from Brazil Aluminium.

South32 will also redirect alumina volumes previously shipped from Worsley to Mozal. The company plans to sell that alumina to third-party customers under index-linked pricing agreements. As a result, the commercial response reduces internal demand and preserves refinery sales optionality during the South32 Mozal aluminium smelter idling period.

The Metalnomist Commentary

This decision shows how power contracts now sit at the core of aluminium supply security. However, idling Mozal could tighten regional value chains and reduce Mozambique’s industrial export leverage. Therefore, future restarts will likely depend on bankable, long-duration power terms.