Perth-based South32 has withdrawn production guidance for one of its major assets, the Mozal Aluminium smelter in Mozambique, after an outbreak of civil unrest.
The company said that due to escalating civil unrest in the east Afria country, the transport of raw materials to its smelter was being impacted by road blockages.
“We have implemented contingency plans to mitigate operational impacts and we are working with relevant stakeholders,” the company said.
“We are withdrawing production guidance for Mozal Aluminium as we respond to the evolving situation.”
South32 said its workforce at Mozal was safe and there have been no security incidents at the smelter.
The Mozal smelter has a major operational link to WA, as it sources all of its alumina – a key input in the production of aluminium – from South32’s Worsley Alumina refinery near Collie.
Another key input is power, as aluminium smelters are big consumers of energy.
South32 recently disclosed it was in discussions with the Mozambique government and its energy utility Eskom to extend the smelter’s hydro-electric power supply beyond March 2026 “as there are currently no viable alternative suppliers of renewable energy at the required scale”.
The Mozal smelter, which is 63.7 per cent owned by South32, was expected to increase production in FY25 to 360,000 tonnes, up 24 per cent on the prior year.
Mozal is one of three aluminium smelters owned by South32, which has forecast total production of 1,210 tonnes in FY25.
The announcement was made after trading on the ASX closed for the day.
The issues in Mozambique add to concerns about doing business in Africa.
It comes shorty after ASX-listed Resolute Mining was forced to pay $US160 million to the government of Mali after its chief executive had been detained.
Another Perth-based company operating in eastern Africa is Indiana Resources, which took the government of Tanzania to arbitration over the expropriation of its Ntaka Hill nickel project.
Indiana was awarded $US123 million after winning the dispute but accepted a settlement offer of $US90 million and so far has received two out of three scheduled instalments.
