South32 is considering the future of Mozambique’s Mozal aluminium smelter after suspending operations at the facility earlier this year, raising questions about the long-term outlook for one of Africa’s biggest industrial projects.

The Australian mining company said the Maputo-based smelter has been under care and maintenance since March 15 as it evaluates different options for the operation and its ownership stake.

The review comes as South Africa’s Industrial Development Corporation (IDC) studies the possibility of increasing its involvement in Mozal and helping bring the plant back into production.

Mozal has long been one of Mozambique’s most important industrial assets, supporting thousands of jobs and contributing significantly to the country’s economy.

“With Mozal Aluminium currently under care and maintenance, we are assessing various options regarding the smelter and our interest in it,” a South32 spokesperson told Portuguese news agency Lusa.

IDC studies acquisition options

Documents cited by Lusa show that the IDC launched a tender on June 10 to appoint an independent adviser to assess the commercial viability of acquiring Mozal and restarting production.

The state-owned development finance institution already owns a 32.48 percent stake in the project.

The review will examine several options, including buying shares from the majority shareholder or creating a new partnership structure.

The study will also evaluate restart costs, technical requirements and possible alternative energy sources needed to support long-term operations.

Power supply remains key challenge

Any decision to revive the smelter will depend on securing reliable and affordable electricity.

South32 has repeatedly said the power tariffs proposed for Mozal are too high to support economically viable operations.

Chief Executive Graham Kerr previously told investors that the only formal power offer from South Africa’s Eskom was close to $100 per megawatt-hour.

According to the company, fewer than 1 percent of smelters outside China operate with electricity contracts above $50 per megawatt-hour, while Mozal’s maximum sustainable level is about $51 per megawatt-hour.

Shutdown weighs on jobs and economy

Mozal requires about 950 megawatts of electricity around the clock. The power is supplied by Hidroeléctrica de Cahora Bassa through Eskom, but that arrangement expired in March as drought conditions reduced water levels at the reservoir.

Kerr said between 4,000 and 5,000 workers, including contractors and employees, depend directly on the smelter, while another 20,000 people are affected indirectly.

He added that Mozal accounts for about 3.9 percent of Mozambique’s gross domestic product, highlighting the importance of the facility to the country’s economy.