South32's announcement that it will place the Mozal aluminum smelter in Mozambique into care-and-maintenance from March 2026 removes approximately 560,000 metric tonnes per annum of primary aluminum from an already undersupplied global market. The decision, driven by extreme and sustained power price inflation, marks one of the largest single-site capacity withdrawals since the energy crisis began reshaping the industry.
Mozal is the latest casualty of a power-cost reckoning sweeping through energy-intensive smelting operations worldwide. The closure compounds the earlier cut of two-thirds of production at Century Aluminum's Grundartangi smelter in Iceland, which suffered a catastrophic equipment failure in October 2025 and faces an 11- to 12-month restart timeline. These sequential supply hits are removing well over 700,000 tonnes of annual capacity at a time when the market can least afford it.
For European buyers, the implications are severe. The EU duty-paid aluminum premium has already surged to $340 per tonne over LME cash as regional consumers scramble for replacement tonnage. Meanwhile, China's self-imposed cap of 45 million tonnes on primary aluminum production prevents the world's largest producer from filling the gap, and its own power constraints — compounded by AI datacenter buildout — are limiting export availability.
With LME prices at $3,720 per tonne and the forward curve backwardated, the combination of African and European smelter closures is tightening physical availability across the Atlantic basin. Buyers who relied on Mozal's semi-fabricated product streams now face a structural gap with no obvious replacement at comparable cost.