South Africa’s National Transmission Company South Africa (NTCSA) has confirmed that it is working towards concluding a new electricity supply agreement with Mozambique’s Mozal aluminium smelter, as the current long-standing contract approaches its expiry in March 2026.
In a statement, the NTCSA, a subsidiary of national power supplier and state owned entity Eskom Holdings, said it remains committed to finding a solution that supports regional industrial cooperation while protecting South African electricity consumers from unintended cost impacts. The existing power supply arrangement has been in place for over 20 years, with all parties aware that a new agreement would be necessary.
The utility noted that Mozal, one of southern Africa’s largest aluminium smelters, requires electricity tariffs significantly lower than the direct cost of supply to remain globally competitive. However, the NTCSA stated that such an arrangement is no longer financially sustainable, particularly given South Africa’s ongoing efforts to stabilise its power sector and balance the needs of industrial users with those of households and small businesses.
NTCSA Chief Executive Officer Monde Bala said discussions are continuing with stakeholders in both South Africa and Mozambique to explore a mutually beneficial solution that supports regional industrial activity without undermining the financial viability of South Africa’s electricity system.
The NTCSA also clarified that South Africa’s Negotiated Price Agreement mechanism, approved by the National Energy Regulator of South Africa (NERSA), does not apply beyond the country’s borders, limiting pricing flexibility for cross-border electricity supply.
Despite these challenges, the utility said it remains open to securing a new agreement and has, over the past year, communicated an appropriate price range to Mozal.
The Mozal smelter is a key contributor to Mozambique’s economy and a flagship example of industrial cooperation within the Southern African Development Community (SADC). Any changes to its power supply could have wider implications for regional energy trade and industrial policy.
