Global crisis hits Mozambique's Mozal project

MAPUTO, Feb 18 (Reuters) - Mozambique's $2.5 billion Mozal aluminium smelter reported a drop in attributable profit to $440 million for the 2008 financial year and will have to cut staff due to the economic slowdown, BHP said. In the 2007 financial year, it reported an attributable profit of $550 million. A fall in the price of aluminium hit the company's profits, and Mozal's power supply was cut by 10 percent after an energy crisis hit neighbouring South Africa. Mozal derives its electricity from Mozambican distribution company Motraco, set up by utilities from Mozambique, South Africa and Swaziland. Prime Minister Luisa Diogo told Radio Mozambique on Wednesday that Mozal, Mozambique's largest company, plans to make 90 workers redundant this year. But BHP said only 80 workers would be affected. "Mozambique will also feel the pinch of this (global) financial crisis as Mozal will have to cut down its labour force," she said. The price of aluminium fell to its lowest level since October 2002 on Wednesday, as concerns over dwindling demand were reinforced by further bad news for the car industry and a rise in inventories to record levels. Aluminium for delivery in three months on the London Metal Exchange dropped to a low of $1,314 a tonne, a price last seen more than six years ago. Mozal, one of the biggest aluminium foundries in Africa, is a partnership between BHP Billiton , Japan's Mitsubishi Co, South Africa's Industrial Development Corporation and the Mozambican government.