South32 warns of aluminium smelter impairment in Mozambique
South32 Ltd said on Monday it expects to book an impairment charge of its Mozal aluminium smelter in Mozambique due to uncertainty over electricity supply.
The Perth-based diversified mining group said the impairment will be recognised for the financial year that ended June 30.
The mining group will provide the quantum of the impairment expense when it has completed assessing the carrying value of Mozal.
Electricity is supplied to Mozal under an agreement due to expire in March 2026, it said.
Historically, the majority of electricity for Mozal has been generated in Mozambique by a hydro-electric power generator, Hidroelectrica de Cahora Bassa or HCB. HCB is majority owned by the Mozambicn government.
Under the agreement, electricity from Eskom Holdings SOC Ltd is supplied to Mozal when HCB is unable to meet all of Mozal’s electricity requirements.
‘We are continuing to engage with the Government of the Republic of Mozambique, HCB and Eskom on securing affordable electricity supply to enable Mozal to operate beyond March 2026 and maintain its substantial contribution to the economy of Mozambique,’ South32 said.
Given the power uncertainty of operating beyond March 2026, the production guidance for the 2026 financial year for Mozal is under review.
Shares in South32 were down 3.6% to 144.60 pence in London on Monday morning. In Johannesburg, they were down 3.5% to R 35.26. They ended 5.1% lower at A$2.95 in Sydney on Monday.
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