South32’s Mozambican aluminium jewel, the Mozal smelter, has roared back to life, posting a hefty 12% surge in production to 265,000 tonnes for the nine months ending March. This impressive rebound, revealed by CEO Graham Kerr, comes on the heels of a successful recovery plan and a resilient effort to shrug off the impact of December’s civil unrest in the southern African nation.
Despite the earlier turbulence, South32 is holding steady on its production forecast of 350,000 tonnes for the full year ending in June, signalling a confident outlook for the Mozambican operation.
However, a looming shadow hangs over Mozal’s future: its power supply. Kerr minced no words, stating that securing a long-term hydro-electric power deal beyond March 2026 is a top priority. The smelter currently relies on the Cahora Bassa scheme on the Zambezi River, which also feeds South Africa’s beleaguered Eskom.
“We are actively engaging with Eskom and the Mozambican government to extend this crucial power supply,” Kerr emphasized. He pointed out the stark reality that “there are currently no viable alternative suppliers of renewable energy at the required scale,” underscoring the critical nature of the ongoing negotiations.
South32 is aiming to nail down a new energy supply agreement within this calendar year, a move Kerr stressed is vital to ensure the smelter’s continued operation and its “substantial contribution to the economy of Mozambique.”
Meanwhile, back in South Africa, the mining giant’s manganese operations are facing headwinds. While production guidance remains at a solid two million tonnes for the year, Kerr highlighted an 18% slump in sales during the March quarter. The culprit? “Port congestion impacted the timing of shipments,” he explained, painting a picture of logistical bottlenecks hampering exports.
Across the group, however, there were brighter spots. South32 celebrated an 18% jump in copper production and a 6% rise in aluminium output for the nine-month period. The company also boasts a healthy net cash balance of $252 million as of the end of March, providing a buffer against global economic uncertainties.
Looking ahead, Kerr struck a cautious yet confident tone. “Our unwavering focus on operational discipline, tight cost management, and a robust balance sheet positions us well to navigate any potential storms in the global markets,” he asserted, suggesting South32 is battening down the hatches while keeping its production engines humming. The clock is ticking, however, on securing that crucial Mozal power deal, a linchpin for the company’s future success in the region.
