By: Green building Africa

The National Transmission Company South Africa (NTCSA) has confirmed that it is engaged in ongoing negotiations to secure a new power supply agreement for the Mozal aluminium smelter in Mozambique. The current long-term supply contract, which has been in place for over two decades, is set to expire on March 15, 2026.

In a recent statement, NTCSA CEO Monde Bala emphasized the need for a "mutually beneficial solution" that balances the smelter's requirement for a globally competitive electricity tariff with the financial sustainability of the transmission company and fairness to South African electricity consumers. The NTCSA stated that the existing pricing arrangement is not sustainable, as the smelter requires a tariff "significantly below the direct cost of supply."

A key challenge is that South Africa's regulated Negotiated Price Agreements framework, administered by the National Energy Regulator (NERSA), does not apply to cross-border supply deals. Despite this constraint and the smelter owner South32's announced plans to mothball the facility—putting 2,500 jobs at stake—the NTCSA reiterated its commitment to reaching a new agreement and stated it has communicated a viable price range over the past year.