Johannesburg: The National Transmission Company South Africa (NTCSA) has confirmed that it is committed to concluding a new electricity supply agreement with the Mozal aluminium smelter in Mozambique. In an update on the Mozal smelter, the NTCSA said it is committed to a new agreement as well as to protect South African electricity consumers from unintended cost impacts.

According to South African Government News Agency, the NTCSA, a subsidiary of Eskom Holdings SOC Ltd, emphasized that it remains dedicated to reaching a new electricity supply agreement with the Mozal aluminium smelter in Mozambique. This commitment is aimed at safeguarding NTCSA’s financial stability while protecting South African electricity consumers from any unintended cost impacts. The existing supply agreement between the parties has been in place for more than 20 years, with all parties aware that a new agreement is due on March 15, 2026.

The NTCSA highlighted that the Mozal smelter needs an electricity price significantly lower than
the direct cost of supply to remain globally competitive. The current arrangement has been deemed unsustainable for NTCSA in the future. Therefore, a mutually beneficial solution, developed collaboratively with stakeholders in both Mozambique and South Africa, is crucial to support regional industrial activity while ensuring NTCSA’s financial sustainability and fairness to South African electricity consumers.

NTCSA Chief Executive Officer, Monde Bala, stated that NTCSA will continue to engage with stakeholders in both countries to explore the feasibility of such an arrangement. Furthermore, the NTCSA noted that the Negotiated Price Agreements (NPA) policy mechanism provided by the National Energy Regulator of South Africa (NERSA) does not extend beyond South Africa’s borders.

Bala added that NTCSA remains available and open to finding a solution for the Mozal smelter. Over the past year, NTCSA has consistently indicated an appropriate price range for the electricity supply to secure a new agreement with its
valued customer. The NTCSA remains committed to supporting industrial operations within a lawful and economically sustainable framework, balancing industry needs with the rights of all customers, while safeguarding households and small businesses from unintended cost impacts.

The NTCSA will continue to provide updates as developments arise.