Post #369

Mozambique-Australia Chicken Game 🌟 Australian company South32is threatening to shut down by March 2026 one of the largest aluminium smelters on the entire continent, located in Mozambique near Maputo. This is part of a long-running tug-of-war between Mozambique's government and the company. South32 owns a 63.7% stake in Mozal Aluminium, the largest industrial enterprise in Mozambique. According to media reports, this single plant generates up to 3% of Mozambique’s GDP while consuming up to 50% of all the electricity produced in the country. Its nameplate capacity is >550,000 tonnes of aluminium per year. 📆 In earlier times, Mozambique’s government was generous in handing out preferential terms for investment. The Mozal plant was one of the beneficiaries: since 1997 it has paid no income tax, only 1% of turnover + dividends. 🔄 More recently, however, the policy has U-turned towards revising such contracts in order to squeeze more tax out of companies. One problem is that Mozal’s preferential contract runs until 2047. 💡 So, another pretext was found — the upcoming review of electricity prices, especially given that the power supply contract has to be renegotiated by March 2026. Assuming the smelter would have no choice, the government set a higher tariff and simply waited for day X. 🤔 However, at the Australian company’s office they realised that escalation can work both ways, and in turn announced they will simply halt production, which could lead to several thousands of people losing their jobs. ⏩This is the curse of industrialization: with no domestic capital one has no choice but to lure foreign investors with lower taxes — and afterwards put up with absent revenues. ➡️ Follow to stay informed - @devilsbelow