Shares of aluminium maker Nalco are under severe selling pressure, falling more than 7%, its worst since June 2024, after reports showed that Australian mining major South32 has withdrawal its production guidance for its Mozal Aluminium smelter unit in Mozambique over rising civil unrest that has resulted in civilian casualties.
For Nalco, this was the third day of fall in the share price, however, on a YTD basis, the shares are still higher by 70%.
South32 said road blockages were restricting transport of raw materials to the facility, leading to operational impact. A recent disputed election result in Mozambique has triggered protests in the country, leading to escalating violence.
"There’s a large amount of civil unrest there, so that’s having some impact on our ability to move supplies around," South32 Chief Executive Officer Graham Kerr told Bloomberg News.
South32 has a 63.7% stake in the Mozal Aluminium smelter, and the unit contributed 28% to the parent's total aluminium output in FY24.
Bloomberg News reported earlier this week that smelters in China too are cutting aluminium output after a surge in alumina prices threatened to drive up production costs. Alumina prices have more than doubled this year, on the back production disruptions across geographies, latest one being Mozambique.
Base metals have also risen ahead as China is holding a key policy meeting of the Central Economic Work Conference, to lay out next year’s growth priorities. An anticipation of some kind of stimulus from China is attracting bullish bets on commodity futures.
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