South Africa’s Industrial Development Corporation (IDC) is weighing its options regarding Mozambique’s Mozal aluminium smelter, according to a tender issued on 10 June seeking advisers to assess whether it should acquire South32’s 63.7% stake or pursue an alternative ownership structure to revive the operation.
The IDC, which holds a 32.48% stake in Mozal S.A., is seeking independent commercial and technical advice on three options:
- Acquiring South32’s shares through pre-emptive rights or a direct offer;
- Facilitating an alternative shareholding structure involving other shareholders or strategic partners; or
- Selling down its own stake and exiting the investment.
Following the failure to secure an affordable and sustainable electricity supply contract, production was suspended and Mozal was placed on care and maintenance from 15 March 2026. The IDC says this reflects the structural unviability of the operation under prevailing electricity pricing and contracting conditions rather than technical or market failure, pointing out that any decision to resume operations would require a long-term affordable and sustainable electricity supply solution.
“It is against this background that IDC requires independent, comprehensive assessment and investment-grade advice to determine whether Mozal can be returned to sustainable operations and whether an affordable and sustainable electricity supply solution can be secured,” the IDC states in the Request for Proposal (RFP), which is scheduled to close on 9 July 2026. IThe tender is published on the IDC’s website and is available here and here.
Mozal, located about 20km west of Maputo, accounts for around 3% of Mozambique’s GDP and was Mozambique’s single largest industrial private employer, having supported more than 20,000 jobs over the past 25 years.
The central issue underpinning the review is whether the smelter can secure a long-term affordable electricity supply, after South32 indicated that rising energy costs had rendered the operation one of the most expensive aluminium smelters globally. The $2 billion facility requires around 950MW of power, making electricity the dominant cost driver
Mozal’s shutdown had wider implications, including for South African power utility Eskom, which reportedly earned about R5 billion a year from electricity sales to the smelter.
READ: South32 CEO says it’s too late for an energy deal at Mozal
Mozambique: Aluminium exports hit record $1.347 B in 2025, up 20% YoY, entirely on Mozal’s output
The advisory mandate will require the IDC appointed adviser to assess technical, operational, commercial, financial and environmental requirements for a restart.
A key focus of the assessment is the development of viable electricity supply options to support a restart of operations.
These include interim grid supply arrangements, self-generation, renewable energy and hybrid solutions, wheeling arrangements, and a proposed gas-to-power project adjacent to the smelter.
The adviser will also evaluate technical feasibility, cost structures, regulatory approvals and implementation timelines for each energy pathway.
IDC corporate affairs head Tshepo Ramodibe said Mozal remains “a strategically important industrial asset in the region”, but added that it was premature to comment on any specific transaction outcome.
According to publicly available information, Mozal’s shareholder structure consists of South32 (63.7%), South Africa’s Industrial Development Corporation (32.48%) and the Government of Mozambique (3.9%), which holds preference shares.
FILE – For illustration purposes only. [File photo: Evidências]
Key excerpts from the IDC Request for Proposal (RFP) are reproduced below.
Appointment of an Independent Commercial and Technical Advisor
RFP number: T33-06-26
Issue date: 10 June 2026
Closing date and time: 9 June 2026 at 11:00 am
Tender validity period: 120 days from the closing date and time
(…)
2. Background
Mozal S.A. (“Mozal”) is an aluminium smelter domiciled in Mozambique. It was placed on care and maintenance in March 2026 following the failure to secure an affordable and sustainable electricity supply. The IDC, which is a 32.48% shareholder in Mozal S.A., is considering its options, including whether to:
• Acquire the shares from the majority shareholder, either by exercising its pre-emptive rights or by making an offer to purchase the shares.
• Facilitate an alternative shareholding structure which might involve partnering with other interested parties.
• Facilitate an alternative shareholding structure which might involve disposing of all or part of its shareholding in Mozal.
Following the failure to secure an affordable and sustainable electricity supply contract, production was suspended and the smelter was placed on care and maintenance from 15 March 2026. This development reflects the structural unviability of the smelter under prevailing electricity pricing and contracting conditions, rather than technical or market failure. Accordingly, any decision to resume operations will have to be accompanied by a long-term affordable and sustainable electricity supply solution.
It is against this background that IDC requires an independent, comprehensive assessment and investment-grade advice to determine whether Mozal can be returned to sustainable operations and whether an affordable and sustainable electricity supply solution can be secured.
The objective of the advisory mandate is to assist the IDC to:
• Assess the commercial merits, risks and transaction terms of acquiring Mozal and reviving operations.
• Evaluate the technical, operational, commercial, financial and environmental compliance requirements necessary to acquire and restart Mozal.
• Identify and assess alternative electricity supply options capable of supporting a long-term sustainable and competitive cost structure.
• Propose an appropriate governance framework, management structure and operating model.
• Structure a risk-mitigated transaction framework for the contemplated acquisition of Mozal from the current majority shareholder.
• Identify potential strategic equity partners for collaboration in the acquisition and long-term operation of Mozal.
• Develop a commercially viable and financially sustainable business plan for the revival of Mozal operations.
3. Scope of Work / Terms of Reference
The appointed bidder should be able to provide the following:
3.1 Technical and Operational Assessment
• Review the technical condition of the smelter facility following care and maintenance.
• Review historical production efficiency, maintenance practices and downtime history.
• Assess restart operational requirements, timelines, costs and production ramp-up schedules.
• Outline raw material sourcing options, including potential suppliers and market-related supply terms for critical raw materials such as alumina, coke and pitch.
• Evaluate the operational capabilities required to operate a smelter of this nature, including staffing, systems and contractor arrangements.
• Review the robustness of the proposed Management Services Agreement.
3.2 Energy Supply and Infrastructure Assessment
• Review existing power supply arrangements and termination risks.
• Identify and assess alternative electricity supply options, including:
- Interim supply arrangements.
- Grid-based and self-generation solutions.
- Wheeling, renewable energy and hybrid solutions.
- The proposed gas-to-power solution adjacent to Mozal.
• Assess the technical feasibility, timelines, cost structures and risk allocation associated with the gas-to-power project.
• Evaluate capital requirements, timelines, regulatory approvals and pricing implications of each option.
3.3 Strategic Partner Identification
• Identify and assess potential strategic equity partners with relevant industry and operational expertise, as well as adequate financial strength.
• Evaluate potential partnership structures and collaboration models.
3.4 Environmental and Social Assessment
• Assess compliance with environmental permits and standards.
• Review historical and potential environmental liabilities.
• Evaluate social and labour obligations and community impacts.
• Assess alignment with IDC’s Environmental, Social and Governance (ESG) and development impact frameworks.
• Review carbon intensity and transition risks.
File photo: South32
3.5 Governance, Management and Operating Model
• Propose a suitable governance framework, including recommendations on board composition, for a recommissioned Mozal.
• Outline an appropriate management structure, including the experience and qualifications required for the management team.
• Propose an optimal operating model (owner-operated or contractor-operated).
• Identify and assess a shortlist of suitable contractors should the contractor-operated model be deemed more appropriate.
3.6 Financial Assessment and Valuation
• Review historical financial performance and cash-flow generation.
• Assess liquidity, working capital and dividend sustainability.
• Develop integrated financial models reflecting:
- Power pricing and supply assumptions.
- Aluminium price sensitivities.
- Sustaining and growth capital expenditure.
• Provide valuation ranges using appropriate valuation methodologies and assumptions.
• Conduct financial due diligence, including tax implications and material financial liabilities.
3.7 Commercial and Strategic Assessment
• Assess Mozal’s strategic position within:
- Regional and global aluminium markets.
- Southern African industrial and beneficiation value chains.
- Development impact considerations.
• Review Mozal’s competitive cost position, with emphasis on:
- Electricity intensity and pricing exposure.
- Supply arrangements for alumina, coke, pitch and other critical inputs.
- Logistics and export infrastructure.
• Analyse aluminium market dynamics, pricing forecasts and long-term demand prospects, and provide a comprehensive global aluminium market report.
• Identify and assess strategic options available, including acquisition, partnership or exit.
File photo: Mozal
3.8 Business Plan Development
• Propose a comprehensive, commercially viable and financially sustainable business plan for reviving Mozal operations.
• Develop a detailed financial model showing key inputs and techno-economic assumptions, including capital expenditure and operating cost estimates.
• Clearly articulate risks, sensitivities and mitigation strategies.
3.9 Transaction Structuring and Funding
• Evaluate proposed acquisition structures, including:
- Performance-linked consideration.
- Deferred settlement funded through dividends and/or aluminium sales.
• Propose a risk-mitigated transaction structure and funding model.
• Outline balanced risk-sharing strategies to allocate operational, power, market and regulatory risks appropriately among key stakeholders.
• Propose key commercial terms and conditions required for a viable transaction.
3.10 Strategic Options and Recommendation Framework
• Integrate all findings and proposals into a ranked strategic options matrix.
• Provide clear recommendations covering value, risks, feasibility, timelines and implementation requirements.
3.11 Expected Outcomes and Deliverables
The appointed bidder shall deliver:
• Inception Report.
• Interim Critical Risk Report.
• Interim Investment Committee Submission Reports.
• Integrated Report covering each scope area.
• Independent Valuation Report.
• Investment Committee-ready recommendations with clear go/no-go guidance and suggested conditions precedent.
• A full presentation and supporting annexures.
4. Project Timelines
The work shall be undertaken on an accelerated timetable, reflecting the urgency of Mozal’s operational and electricity supply challenges, with milestones to be agreed at inception.
The work and deliverables are expected to be completed within approximately eight weeks of appointment, with Interim Critical Risk Reports and Investment Committee Submission Reports to be delivered four weeks after appointment.
(…)
The full IDC documents are available for download below.
Tender Reference Number: T33-06-26. Description: Appointment of an Independent Commercial and Technical Advisor. Issued Date: 10 June 2026. Closing Date: 09 July 2026 @ 11:00 (New date)
Request for Proposal (RFP): Appointment of an Independent Commercial and Technical Advisor. All bidders are requested to note the following amendments:
Source: Industrial Development Corporation of South Africa Ltd (IDC) / Business Day / Fintech Association of Kenya
