South32 places Mozal on care and maintenance
Diversified miner South32 has placed its 63.7%-owned Mozal aluminium smelter on care and maintenance, with effect from March 15, after it was unable to secure an affordable power supply agreement for the operation with the Mozambique government, South African power utility Eskom and other stakeholders beyond March.
South32 CEO Graham Kerr points out that the company had been in discussions with the various stakeholders for six years.
“While this is not the outcome we wanted, we are proud of the history and significant contribution Mozal has made to the local community and the Mozambican economy in its 25 years of operation," he says.
South32 will sell the alumina supplied from its Australia-based Worsley Alumina refinery to Mozal to third-party customers at index-linked prices.
As previously announced, one-off costs to place Mozal into care and maintenance, including employee separation costs and termination of contracting arrangements, are about $60-million. Ongoing annual care-and-maintenance costs are about $5-million.
South Africa's Industrial Development Corporation holds a 32.4% interest in Mozal and the Mozambique government a 3.9% interest.
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