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South32 will place Mozal in care and maintenance by 2026, with a $372 million impairment

South32, an Australian company, announced on Thursday that it would take a $372-million impairment on its Mozal aluminum smelter located in Mozambique. The facility will be placed into care and maintainance once the current power supply contract expires.

In July, the diversified miner warned that it would be facing an impairment at Mozal in fiscal 2025. It was also reviewing its production as it had failed to secure affordable electricity beyond March 2026. The miner did not reveal the amount of the charge at the time.

South32 has been in contact with the Mozambique Government, the hydroelectric producer Hidroelectrica de Cahora Bassa and South African utility Eskom ever since July.

South32 stated on Thursday that "these engagements do no provide confidence that Mozal would secure enough and affordable electricity after March 2026."

HCB is the main power supplier for Mozal. Eskom will step in if it is unable to meet the needs of the smelter.

The miner anticipates that its share of Mozal’s production in fiscal 2026 will fall to around 240 kilotons, down from 355 kilotons in 2025.

South32 reported impairments to its Mozal Project for the second time in July. In December, protests across Mozambique affected operations and production.

(source: Reuters)