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JOHANNESBURG - South32 Limited (ASX/LSE/JSE:S32; ADR:SOUHY) announced Thursday it expects to place its Mozal Aluminium operation in Mozambique on care and maintenance by March 2026 due to challenges in securing sufficient and affordable electricity beyond the expiration of its current supply agreement.
The mining company stated it has been engaging with the Government of Mozambique, Hidroeléctrica de Cahora Bassa, and Eskom regarding electricity supply but these discussions "do not provide confidence" that adequate power will be secured.
As a result, South32 will immediately begin limiting investment at Mozal, including stopping pot relining and standing down associated contractors this month.
The company projects Mozal’s production for fiscal year 2026 will reach approximately 240,000 tonnes (South32 share), reflecting reduced operational capacity as the facility continues operating only until March 2026.
South32 also announced it will recognize a US$372 million impairment for Mozal with its FY25 financial results. The write-down includes US$339 million in property, plant and equipment, US$7 million in intangible assets, and US$26 million in raw materials and consumables.
The impairment will reduce Mozal’s carrying value to US$68 million and will be excluded from FY25 underlying earnings, according to the company’s press release.
South32 had previously flagged concerns about Mozal’s electricity supply in a July 14 announcement, which prompted a carrying value assessment of the operation amid growing uncertainty about its future viability.
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