MAPUTO, March 16 (Xinhua) -- Mozambique's major industrial enterprise, the Mozal aluminum smelter located on the outskirts of Maputo, has halted aluminum production and entered a "care and maintenance" regime due to difficulties in securing sufficient electricity at competitive prices.
Mozal confirmed on Monday that it had stopped producing and exporting aluminum ingots after negotiations over electricity tariffs failed to reach an agreement.
The company said it had held discussions with relevant parties to secure power supply beyond March, when its current electricity agreement expires, but "it was not possible to reach an agreement on the electricity price that would allow the smelter to remain competitive internationally."
Mozal requires about 960 megawatts of electricity to operate at full capacity. However, the Cahora Bassa hydropower plant is currently unable to supply that level of power, partly due to drought conditions, while South Africa's utility Eskom has also indicated it cannot provide the required power.
Mozambique's government warned the suspension could have a significant economic impact.
Noting that Mozal has been one of the country's main sources of export revenue and accounts for about 40 percent of the industrial output of Maputo Province, government spokesperson Inocencio Impissa said the suspension is expected to affect around 1,100 direct jobs and about 5,000 indirect jobs.
According to local media reports, restarting production could take at least 12 months, and no other company has so far expressed interest in taking over the facility.
Mozal, majority-owned by the Australian mining group South32, has operated in Mozambique for about 25 years. ■
