Mozambique: Mozal Redundancies Illegal, Says Labour Minister

Maputo — Mozambican Labour Minister Helena Taipo has warned that the redundancies of 80 workers announced by the MOZAL aluminium smelter are illegal, reports the independent daily "O Pais". She said that in some cases the notices of dismissal were being delivered to the workers after they had been laid off. A team from the Labour Ministry met with the MOZAL management to discuss the dismissals on Friday, and hopes to negotiate a compromise settlement. MOZAL has cited the international financial crisis, which has depressed demand for aluminium, as a reason for the dismissals. But Taipo pointed out that to date no other Mozambican company has citied the credit crunch as a reason for sacking workers. She also noted that, despite the recession in Europe and America, MOZAL happens to be an extremely profitable company. Last week a Reuters dispatch carried the extraordinarily inaccurate claim that MOZAL made a loss of 115 million dollars in 2008, a claim that was uncritically repeated in the Maputo weekly "Savana". In fact, the real figures are that MOZAL's attributable profits have fallen from 550 million dollars in the 2007 financial year to 440 million in 2008. A fall in profits is not the same things as a loss, and MOZAL is clearly still very much a viable company. A real problem, however, is that MOZAL has not been receiving the electricity it needs to operate at full capacity (around 900 megawatts). The power is supplied by MOTRACO, a company owed by the Mozambican, South African and Swazi electricity companies (EDM, ESKOM and SEB). But MOTRACO obtains the power from ESKOM, and the severe power shortage in South Africa led ESKOM to cut by 10 per cent supplies to major industrial customers, including MOZAL. Aluminium prices have tumbled very sharply in the past eight months. According to the website of the London Metal Exchange, a tonne of aluminium cost over 3,000 US dollars in June 2008. On Friday aluminium costs 1,295 dollars a tonne for a cash purchase, or 1,350 dollars a tonne for delivery in three months.