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PERTH – Alcoa (NYSE:) Corporation has announced it will begin the phased closure of its Kwinana Alumina (OTC:) Refinery in the second quarter of 2024, citing outdated infrastructure and challenging market conditions as the primary reasons for the decision. The aging Kwinana facility has been running at just 80% capacity for the last year before this curtailment decision and suffered a significant net loss of $193.3 million in 2023, higher than the previously reported figure of $130 million.
The closure will result in a significant reduction in the workforce at the Kwinana facility. Alcoa announced plans to eliminate nearly all jobs at its Kwinana alumina refinery in Western Australia—550 by September of 2024 and another 200 by Q3 of 2025—totaling a reduction of approximately 750 positions. This is a slight decrease from the earlier estimate of 800 employees. The future of around 300 contractors is also uncertain post-announcement.
Despite ceasing production at Kwinana, Alcoa’s port operations will persist for material handling tied to other refineries unaffected by this cutback. Its production costs stood high at $410/tonne versus $250/tonne at other Alcoa refineries in WA.
The company is preparing for the financial impact of the restructuring, with estimated costs projected to be between $180 million and $200 million. This move comes in the wake of a leadership transition where William Oplinger replaced Roy Harvey as CEO. Despite these changes, Alcoa continues to pledge long-term commitment to Western Australia and support for transitioning employees during this period of organizational change.
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