IDC Acquires 63.7% Stake in Mozal Aluminium for $2B

South Africa's Industrial Development Corporation (IDC) is considering taking full control of Mozal Aluminium by potentially acquiring the 63.7% stake held by South32. This move underscores IDC's ambition to navigate and possibly revitalize the struggling Mozambican aluminium smelter, amid persistent energy supply challenges that halted operations earlier this year.

The IDC, which already owns 32.48% of Mozal, is actively seeking professional guidance to evaluate its strategic options. These include using its preemptive rights to acquire South32's shares directly or restructuring ownership by involving new strategic partners. The examination also encompasses the possibility of IDC reducing its own stake as an exit strategy. Mozal’s production stopped in March 2026 due to unsustainable electricity prices, which have compromised the smelter's viability.

IDC's strategic consideration stems from Mozal's economic significance. The smelter, located near Maputo, was a major industrial employer in Mozambique, historically contributing approximately 3% to the country's GDP. However, escalating energy costs have made Mozal one of the world's most expensive smelters to operate, largely attributed to its substantial energy requirement of about 950MW—sourced predominantly from South African utility Eskom, which derived significant revenues from the arrangement.

The outcome of IDC's deliberations carries substantial implications for the regional aluminium sector. Mozal's shutdown had already disrupted Mozambique’s record aluminium export performance in 2025. A successful restructuring and reactivation could stabilize regional aluminium output and restore critical industrial employment. Conversely, failure to secure a feasible energy solution could further hinder competitiveness and output in the sector dominated by rising operational costs.

Looking ahead, IDC's RFP, which closes in July 2026, seeks to align technical, operational, and commercial analyses for any potential restart. The consultancy will explore a range of energy options, including interim grid arrangements, self-generation, and renewable solutions. Pending these assessments, any acquisition or restructuring is on hold until a sustainable power strategy is achievable, potentially involving intricate regulatory and logistical hurdles.