South32 has placed its Mozal aluminium smelter in Mozambique into care and maintenance after failing to secure affordable electricity supply from Eskom, the struggling South African utility. The 575,000 tonnes per year facility — one of the largest industrial assets in Mozambique — had been operating under increasingly uneconomic power terms. Negotiations between South32, the Mozambican government, and Eskom failed to reach a revised tariff structure. (FACT: Reuters, May 19, 2026; Mozambique Mining Journal, May-June 2026)
The closure removes a critical source of low-carbon aluminium from the global market. Mozal's metal was produced using hydroelectric power from the Cahora Bassa dam, giving it a carbon footprint roughly 75% lower than the global average for primary aluminium. European buyers — particularly in automotive and packaging, where embodied carbon regulations are tightening — had increasingly relied on Mozal metal to meet sustainability targets. (FACT: Mozambique Mining Journal, May-June 2026)
The Mozal closure is the latest in a series of African smelter problems. South32 is also working to transition its Hillside smelter in South Africa to renewable power by 2031, but faces similar electricity cost pressures. The broader issue is that African smelting capacity — which had already been declining due to power reliability and cost issues — is shrinking at a time when global supply is under maximum stress from the Gulf crisis, Chinese capacity constraints, and European plant closures. (FACT: Bez Kabli, May 18, 2026)
For Mozambique, the economic impact is severe. Mozal was one of the country's largest export earners and industrial employers. The Mozambican government stated it is doing "everything that is required" to keep the smelter open, but no agreement has been reached. (FACT: Reuters, May 19, 2026)
The Mozal closure removes a key source of low-carbon aluminum from an already undersupplied market. European buyers who relied on Mozal for their green aluminum targets now need to find alternatives at a time when all primary aluminum is scarce. Options are limited: (1) Russian aluminum, which has higher embedded carbon but is available; (2) recycled aluminum, where specifications allow; (3) paying a premium for the remaining pool of low-carbon aluminum from other hydro-powered smelters in Canada, Iceland, or Norway. The carbon premium for low-carbon aluminum is likely to widen significantly as the pool of available supply shrinks.