The Congress of South African Trade Unions (COSATU) has been deeply alarmed by news of a potential mothballing or even closure of Mozal’s operations in Maputo, Mozambique. Such a decision would threaten the jobs of 5 200 workers at Mozal and 22 000 indirect downstream jobs in South Africa linked to the company. This is something neither nation can afford.
With unemployment already dangerously high at 42.4% in South Africa, we must pull out all stops to avert this potential calamity. Our fate as a country is deeply intertwined with that of Mozambique’s. We are sister nations and a society indebted to the Mozambican people for the many painful sacrifices they made, and the subsequent devastation inflicted upon them for their support for South Africa’s liberation struggle.
A South Africa battling high levels of unemployment and poverty cannot sustain the levels of migration flowing into the country from across the region and continent, amongst elsewhere. Key to giving people an alternative to leaving their homes in search of scarce jobs is to support economic development in our neighbouring states. Mozal is a major source of manufacturing jobs and industry in Maputo and a positive pillar of regional economic integration.
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At the heart of the issues affecting Mozal’s continued viability is the price of electricity, the largest cost of their operations. Over the years they have benefited from favourable electricity tariffs from Cahora Bassa Dam in Mozambique and Eskom in South Africa. Cahora Bassa is struggling due to ongoing draught in the region.
Eskom too is having to make tough decisions as it emerges from its dark chapter of state capture and to plug its many financial leakages. Its current agreement with Mozal ceases at the end of March 2026. What is needed is a short-term solution to be found before then to enable Mozal to continue operations.
Equally a long-term solution that addresses the challenges faced by Mozal or any other intensive electricity user, and the rest of the economy and society is needed as a matter of the highest urgency. It is critical that the owners of Mozal; South 32, the Industrial Development Corporation and the Mozambican government, working with Eskom and the South African government pull out all stops to ensure a mutually affordable new electricity tariff regime is secured before the end of March. This is a critical economic asset that South Africa and Mozambique just cannot afford to lose.
We are encouraged by the interventions by the South African Presidency, the Minister for Electricity and Energy, Dr. Ramokgopa and Eskom to find solutions with the owners of Mozal. We are confident that with the necessary will and compromises by all parties that an agreement can be found, as had recently been concluded with Samancor Chrome and Glencore-Merafe Chrome. Whilst breathing space and an affordable new tariff agreement is a necessity to enable the continued operations of Mozal, a package of short-, medium- and long-term interventions are needed to enable Eskom to provide more affordable tariffs to the economy and all consumers, whilst simultaneously ensuring its own sustainability.
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