Eskom is racing against time to secure a new power supply agreement with Mozambique’s Hidroeléctrica de Cahora Bassa (HCB), as the current deal that supplies electricity to Mozal aluminium smelter is set to expire at the end of March, raising the risk of major operational disruptions if negotiations fail. Speaking amid growing concern over the looming deadline, Eskom CEO Dan Marokane on Thursday confirmed that the existing power supply agreement will formally end in March and that no replacement contract has yet been concluded. This has heightened anxiety around the future of Mozal, one of southern Africa’s largest aluminium smelters owned by South32 and a significant industrial consumer of electricity.
Late last year, South32 said its facility, which is the biggest industrial employer in Mozambique with more than 2 500 staff, will be put on care and maintenance when its electricity agreement expires at the end of March 2026. Historically, most of the electricity for Mozal has been generated in Mozambique by a hydro-electric power generator, Hidroeléctrica de Cahora Bassa (HCB). Under the current agreement, electricity from Eskom is supplied to Mozal when HCB is unable to meet all of Mozal’s electricity requirements.
HCB recently indicated that drought conditions had the potential to impact its capacity to deliver sufficient hydro-electric power to Mozal. Behind the scenes, Marokane said in an interview on the sidelines of the World Economic Forum (WEF) in Davos, Eskom and its partners are still engaged in discussions aimed at finding a workable solution. While Marokane said he remained cautiously optimistic, he acknowledged that any new deal will have to be negotiated on revised terms that reflect current realities in the regional electricity market.
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“I remain hopeful that the party’s efforts in trying to find a solution will yield something. But that’s all I can say at the moment, that the conversation is still on the table. But it has to be a conversation that recognizes that new terms are required for supply agreement going forward,” he said.
“So let’s leave it at that point. All I can assure is that we are playing ourselves rigorously in re-engaging with the other party. But I do think it’s getting a little bit late.
So every day that passes without an agreement is a day that will likely contribute towards some delays.” The uncertainty around the Mozambique deal comes as Eskom is simultaneously grappling with broader challenges linked to energy-intensive smelters closer to home. In South Africa, the utility, government and major smelter operators have established a joint task team to address the long-standing issue of electricity pricing for large industrial users.
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