Europe's aluminum supply chain — already under strain from the Gulf crisis — is being squeezed from two additional directions. The Grundartangi smelter in Iceland operated with just one-third of its capacity for nearly a year following a transformer failure in late October 2025, while the Mozal smelter in Mozambique, a major supplier to European semi-fabricators, closed entirely in March 2026. Together, these disruptions have removed approximately 400,000 tonnes of annual supply from the market at a time when European buyers can least afford it.
Grundartangi: Iceland's crippled smelter
Century Aluminum's Norðurál smelter at Grundartangi, Iceland, suffered a catastrophic transformer failure on October 28, 2025 that forced the shutdown of its second potline — representing roughly two-thirds of the facility's ~300,000 tonnes of annual capacity. (FACT: Century Aluminum Q1 2026 Earnings Call, May 10, 2026; Mining Weekly, April 24, 2026) The outage was prolonged: Century's first-quarter 2026 shipments of approximately 123,000 tonnes were down sequentially precisely because the Grundartangi second potline was offline for the entire quarter. (FACT: Ticker Report, May 10, 2026)
On April 23, 2026 — 11 months after the failure — Century Aluminum energized the first pots on line 2, restarting production several months earlier than originally planned. The company is now targeting full production by the end of July 2026. (FACT: Mining Weekly, April 24, 2026; Light Metal Age, April 30, 2026) The accelerated restart was driven by the urgency of the global supply situation: Century CEO Jesse Gary noted on the Q1 earnings call that the Gulf disruption had expanded the company's expected 2026 global aluminum deficit to 1.4 million tonnes, and every tonne of capacity mattered. (FACT: Ticker Report, May 10, 2026)
However, the restart is not yet complete. Century is running on a "repair-first" strategy using temporary transformer configurations while awaiting permanent replacements expected in fall 2026. (FACT: Sahm Capital, May 2, 2026) Full production is not expected until end of July — meaning Grundartangi will have delivered severely reduced output for 9 consecutive months from October 2025 to July 2026. For European buyers who relied on Grundartangi's low-carbon, hydro-powered aluminum, the gap has been acute.
Mozal: Africa's silent smelter
The Mozal aluminum smelter in Mozambique — Africa's second-largest smelter and a critical source of aluminum for European markets — entered a care and maintenance regime on March 15, 2026, after failing to secure a new electricity supply agreement. (FACT: Plattforma Media, May 4, 2026; South32 Investor Update, March 16, 2026) Mozambique's largest industrial operation, Mozal produced 248,000 tonnes of aluminum in its final nine months of operation — a 6% decline year-on-year as reduced power availability constrained production. (FACT: Lusa via Club of Mozambique, May 4, 2026)
The root cause was energy pricing. South32 CEO Graham Kerr stated that the "only formal offer" from South African utility Eskom was approximately $100 per MWh — a rate that Kerr pointed out was unsustainable for aluminium smelting, noting that outside of China, less than 1% of smelters have contracts above $50/MWh. (FACT: South32 investor call, via Lusa, May 4, 2026) Mozal consumed nearly half of Mozambique's electricity, with 90% of supply tied to Eskom and 10% from the Cahora Bassa hydroelectric facility. Drought conditions further complicated supply security. (FACT: ODI, May 13, 2026)
The European connection is critical. Mozal's output was predominantly exported to European buyers. South32 reportedly sold remaining finished product stock in March 2026, with sales actually rising 8% in the quarter as the company cleared inventory before the shutdown. (FACT: Plattforma Media, May 4, 2026) That stock is now exhausted, and European semi-fabricators who sourced from Mozal must find alternative supply at a time when every region is competing for available tonnes.
Union negotiations for a potential Mozal reopening are underway — SINTIME, the Mozambican metallurgy workers' union, confirmed in early May 2026 that discussions with South32 are continuing. (FACT: Club of Mozambique, May 4, 2026) But the ODI noted that Mozal's reopening faces structural headwinds: CBAM compliance costs, sovereign debt constraints in Mozambique, and the fundamental question of whether the smelter can operate profitably without a subsidized power tariff. (FACT: ODI, May 13, 2026) Industry analysts consider prolonged care and maintenance — lasting 18-24 months — the most likely scenario, with permanent decommissioning a real risk if negotiations fail. (FACT: Discovery Alert, May 13, 2026)
The number that matters for your business: A European buyer who sourced 10,000 tonnes/year from Mozal, priced at the Q4 2025 average of approximately $2,632/t (2025 full-year average per the World Bank), now faces replacing that volume at LME cash plus European duty-paid premium. At the current LME cash of $3,670/t plus a European premium of approximately $250-300/t, the replacement cost is roughly $1,300/t more than the original contract — an incremental $13 million annually. With Grundartangi also only now returning to full production, European buyers face a supply gap through at least Q3 2026.
Action: European buyers who relied on Mozal-origin or Grundartangi-origin supply must immediately secure alternative tonnage. Key options: (1) Russian aluminum — still flowing to Europe though some end-users self-sanction; expect a $30-50/t discount to LME for the reputational premium. (2) Indian primary aluminum — Vedanta and Nalco are increasing exports to Europe, but competition from US buyers is intensifying. (3) Secondary aluminum — the scrap market is looser than primary; evaluate extruders and foundries that can accept A380 or EN 1706 secondary alloys as substitutes where specifications permit. (4) Re-negotiate force majeure clauses — if you had Mozal in your supply chain, your supplier has likely already invoked force majeure; ensure you have an acceleration clause that lets you source elsewhere without penalty.
Horizon: Act now. Grundartangi will not reach full capacity until end of July 2026 at the earliest. Mozal is unlikely to restart before 2027 at best. The European supply deficit will be most acute in June-July 2026 — secure Q3 volumes by the end of May.
Trigger: Watch (1) Century Aluminum production updates — any delay in the July 2026 full-restart timeline tightens the market further; (2) South32/Mozal negotiation news — a positive outcome on power tariffs would take 6+ months to translate into actual metal; (3) European duty-paid premium — a sustained move above $350/t signals deepening regional tightness.