Maputo, Mozambique - Mozambique is aiming to terminate a contract signed fifty years ago for exporting electricity to South Africa, raising concerns about the economy of Africa's largest industrial nation and jeopardizing the operation of the continent's second-largest aluminum smelting plant located in Mozambique.
According to the transitional energy strategy document in Mozambique, obtained by Bloomberg before its publication, Maputo seeks to harness the 1,150 megawatts of electricity it exports to South Africa from its Cahora Bassa hydroelectric power station.
The document states that the "short-term priority is to reclaim the electricity being exported to South Africa from the Cahora Bassa hydroelectric station when the contract expires on December 31."
Bloomberg reports that this decision will pose challenges for both South Africa, which is grappling with energy supply issues, and South32 Limited, the operator of the Mozal aluminum smelting plant near Maputo, Mozambique's capital, as the factory receives its electricity from South African company Eskom Holdings.
South32 requires 900 megawatts to operate the Mozal plant and claims to operate using clean energy.
However, because Mozambique's power grid is not fully interconnected domestically, the Mozal plant, which produced 345,000 tons of aluminum last year, cannot directly obtain electricity from the Cahora Bassa station in Mozambique.
As a result, the Cahora Bassa station, the third-largest hydroelectric power station in Africa with a capacity of 2,075 megawatts, sends electricity 1,400 kilometers across power lines to Eskom in South Africa, which, in turn, resells the electricity to the Mozal plant.
These arrangements were put in place in 1979 when the last turbines of the Cahora Bassa station were commissioned.
There has been no comment from the Mozambique Ministry of Energy regarding these reports.