IDC in talks with former Mozal shareholders to revive smelter this year

The Industrial Development Corporation (IDC) is in high-level talks with former Mozal shareholders to buy the company from South32 and revive it before year-end, in what will be a boon for Mozambique’s economy and Eskom’s sales.

The IDC would not confirm which of Mozal’s two erstwhile shareholders, BHP and Mitsubishi, is keen to reinvest alongside it to bring the smelter, which accounts for 3% of Mozambique’s economy and the country’s largest employer, back online.

However, IDC CEO Mmakgoshi Lekhethe confirmed to Business Day that there was great interest in buying South32’s stake in the smelter.

The IDC has a 31.4% stake in Mozal, while Australia-headquartered South32 holds a controlling 63.7% stake, and the Mozambican government holds a 3.9% stake through preference shares.

“South32 is thinking of disposing of its stake in Mozal, and the IDC, as the second-largest shareholder in Mozal, is engaging in discussions to acquire Mozal. The IDC does not run entities that it buys,” said Lekhethe.

“We are having very interesting engagements with investors, some of whom are former shareholders in Mozal, to look into the performance of the aluminium sector, and they are saying maybe this is the right time to come back.”

The comments by Lekhethe come in a week in which BHP senior executive Catherine Raw visited South Africa. Raw serves as BHP’s chief development officer, a role that makes her responsible for overseeing decision evaluation, prioritisation and capital allocation.

Mozal was established in 1998 as a BHP-led consortium. BHP let go of Mozal when it spun off South32 in 2015.

South32, in July, put its aluminium smelter in Richards Bay up for sale alongside its other aluminium assets, with US firm Alcoa Corporation the preferred buyer in a deal worth $5.6bn.

Business Day reported earlier this year that the IDC is weighing options to buy South32’s majority stake in Mozambique-based Mozal Aluminium and revive the smelter, which was placed in care and maintenance in March after it failed to strike a tariff relief deal with Eskom.

This comes after the IDC roped in transaction advisers to do due diligence on a possible deal, with the state-owned outfit keeping all options open as it looks to salvage the smelter.

The facility, about 20km west of Maputo, was mothballed after South32 said energy costs were strangling the business.

The decision came after failed negotiations in 2025 with Eskom, the Mozambican government and Mozambique’s leading hydropower group, Hidroeléctrica de Cahora Bassa, over a new power purchase agreement for 2026.

The IDC has asked the advisers to look into three options on what to do with its big exposure to Mozal.