South32 is concerned that an escalation in civil unrest in Mozambique could potentially impact operations for its unit in the country.
Civil protests, road blockages, and the closure of the border between South Africa and Mozambique have characterised the aftermath of disputed elections in the country.
In Mozambique, South32 operates Mozal Aluminium, whose saleable production for the year to June 2024 decreased by 9% to 314 000 tons as the smelter progressed its recovery plan, while managing the impact of load shedding.
With Mozambique battling to quell the civil unrest that erupted after the disputed elections, companies feared for the worst as trucking blockades disrupted operations.
South32 said yesterday that following an easing of tensions and improvement in the civil unrest situation, there were risks that the unrest could escalate with the announcement of election results next week.
“While the situation has improved, any escalation in civil unrest, including following announcement of the election results by the Mozambique Constitutional Council, expected on 23 December 2024, has the potential to impact our critical trucking activity and operations at Mozal Aluminium,” said the company.
With no security incidents at Mozal Aluminium, South32 has been able to transport alumina from port to its operations in the country over the past few days that have seen road blockages largely clear off.
The company is expecting to re-build alumina stocks at the Mozal Aluminium smelter over the coming days if trucking conditions remain favourable .
However, in a bid to preserve raw materials and maintain operational stability, the company has had to reduce the flow of electricity to the electrolytic cells used for the production of aluminium at Mozal.
“If trucking of raw materials to the smelter is disrupted on an ongoing basis, we may need to consider further mitigating action, including potential curtailment of potlines at Mozal Aluminium,” it said.
“If this were to occur, the supply of alumina from our Worsley Alumina refinery would be sold to third party customers at market prices.”
Mozal Aluminium has nonetheless continued to export aluminium to customers during the period of civil unrest in Mozambique.
Prior to the unrest, South32 was expecting production from Mozal to increase by 15% to 360 000 tons next year and to grow by a further 3% to 370 000 in 2026 as the smelter returns toward nameplate capacity.
The company’s guidance for the year to June 2026 was, however, subject to the extension of the current power supply agreement for Mozal Aluminium, which expires in March 2026.
South32 had been engaging with Eskom and the government of Mozambique to extend the smelter's hydro-electric power supply. It said there were “currently no viable alternative suppliers of renewable energy” at the required scale.
BUSINESS REPORT