South32 warns of further escalation in civil unrest in Mozambique

Thu, 19th Dec 2024 08:28

(Alliance News) - South32 Ltd warned on Thursday that any escalation in civil unrest in Mozambique could hurt its operations at Mozal Aluminium.

But the Perth-based mining group noted that road blockages have largely cleared over the past few days, saying it has been able to safely transport alumina from port to Mozal Aluminium.

The diversified miner expects to re-build alumina stocks at the smelter over the coming days if trucking conditions remain favourable.

Mozambique has been rocked by unrest since an October 9 presidential election, won by the Frelimo party. The opposition claims the election was rigged.

The Mozambique Constitutional Council is expected to announce election results on Monday next week.

On Tuesday last week, South32 withdrew its production guidance for Mozal Aluminium due to civil unrest in Mozambique.

In October, South32 said it expected annual aluminium production for Mozal Aluminium to rise to 360,000 tonnes for the 2025 financial year from 314,000 tonnes for the financial year that ended June 30.

For the first quarter that ended September 30, South32 said Mozal Aluminium saleable production increased by 14% to 88,000 tonnes as the smelter achieved improved process stability following completion of its operational recovery plan.

While the situation has improved, any escalation in civil unrest has the potential to hit its critical trucking activity and operations at Mozal Aluminium, South32 said on Thursday.

To preserve raw materials and maintain operational stability, South32 said it has reduced amperage to the potlines.

"If trucking of raw materials to the smelter is disrupted on an ongoing basis, we may need to consider further mitigating action, including potential curtailment of potlines at Mozal Aluminium," the company cautioned.

"If this were to occur, the supply of alumina from our Worsley Alumina refinery would be sold to third party customers at market prices," it said.

Shares in South32 were down 0.4% at ZAR38.44 on Thursday morning in Johannesburg, while they were unchanged at 167.50 pence in London. In Sydney, shares lost 0.6% to AUD3.36.

By Artwell Dlamini, Alliance News reporter

Comments and questions to newsroom@alliancenews.com

South32 Limited