The National Transmission Company of South Africa NTCSA says it is seeking to conclude a new electricity supply agreement with the Mozal aluminium smelter in Mozambique in a manner that safeguards its financial sustainability and protects South African electricity consumers from unintended cost impacts.
The existing electricity supply arrangement between the parties has been in place for more than 20 years and is due to expire on March 15. The NTCSA confirms that all parties have long been aware of the contract end date and that discussions on a replacement agreement are underway.
According to the NTCSA, Mozal requires an electricity price significantly below the direct cost of supply in order to remain globally competitive. However, the transmission company says such a pricing structure is no longer sustainable for the NTCSA going forward.
