Shares in South32 Ltd (LSE:S32, ASX:S32, OTC:SHTLF, JSE:S32) had falled 4.9% at midday to A$2.91 after warning that its Mozal aluminium operations in Mozambique may be placed on care and maintenance from March 2026.
The miner said ongoing talks with the Mozambique government, Hidroeléctrica de Cahora Bassa (HCB) and Eskom have yet to secure sufficient, affordable electricity to sustain operations beyond the expiry of the current supply agreement. “Engagements do not provide confidence” that a resolution is close, the company noted.
South32 will record a US$372 million impairment in its FY25 results, comprising US$339 million in property, plant and equipment, US$7 million in intangible assets and US$26 million in raw materials and consumables. The charge reflects the assessment that the “most likely scenario is for Mozal to operate until the end of the current electricity supply agreement and be placed on care and maintenance”.
The impairment will reduce Mozal’s carrying value to US$68 million and will be excluded from FY25 underlying earnings in line with accounting policy. The company will scale back spending at Mozal, cease pot relining and stand down associated contractors from this month.