Africa’s largest aluminium factory will cease production

January 05, 2026
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The Mozal aluminium factory is located on the outskirts of Maputo, the capital of Mozambique. It is jointly held by South32(63.7%), South African Industrial Development Corporation (32.4%), and the Mozambican government (3.9%). It began operation in 2000 with an initial investment of approximately 2 billion US dollars. It is the largest industrial employer in Mozambique, directly employing about 3000 people. It indirectly creates over 10000 jobs and consumes approximately 950 megawatts of electricity annually, accounting for the majority of Mozambique’s total electricity consumption.

The direct cause of the production halt: The current powder supply agreement expires in March 2026, and there is a huge disagreement between the two sides regarding electricity prices. Due to the soaring domestic energy costs and tight powder supply, the Mozambican government demanded a significant increase in electricity prices. However, the factory South32 insisted on a cap of 0.08 US dollars per kilowatt-hour (approximately 70 US dollars per megawatt-hour). After six years of negotiations without reaching an agreement, South32 eventually announced its production halt.

Market impact: This capacity accounts for approximately 0.6% to 0.8% of the global electrolytic aluminium capacity. Coupled with the limited new global electrolytic aluminium capacity, it will intensify the expectation of tight global supply in 2026, providing support for the recent LME aluminium to break through ＄3000 per ton (reaching a four-year high). Low-cost aluminium enterprises in China, the Middle East and other regions are expected to take over the global share vacated by it, which may also drive up the price of alumina and compress the profit margin of electrolytic aluminium.

The dificulty of restarting: The production halt will enter an indefinite maintenance phase. The equipment will be retained but completely shut down. Restarting will require renegotiating electricity prices and incurring high costs (estimated restart costs may reach 200 million US dollars). There is no clear restart plan in the short term.

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Africa’s largest aluminium factory will cease production

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