Aluminum producer Alcoa Corp said on Monday it will permanently close its Kwinana alumina refinery in Western Australia and take a hit of $890 million in the third quarter related to the closure.
The refinery’s current workforce of about 220 employees will be reduced through 2026 as the closure progresses while some will stay on further to prepare the site for future redevelopment, Alcoa said.
In January last year, the US aluminum producer said it planned to stop production at the loss-making refinery amid challenging market conditions and the facility’s age.
“Alcoa operated the Kwinana refinery for a number of years in a challenging environment and made the difficult decision to permanently close the facility after unsuccessfully exploring multiple options for a sustainable path to restarting,” said Matt Reed, executive vice president and chief operations officer for Alcoa.
The closing of the Kwinana refinery will bring down Alcoa’s annual global consolidated refining capacity to 11.7 million metric tons, the company said.
Australia’s metals processing sector is under strain from high energy and labour costs, while oversupply from top producer China continues to depress prices.
Glencore sought support for its Mount Isa copper smelter in Queensland state, while Rio Tinto has repeatedly flagged a tough outlook for its Tomago aluminum smelter in New South Wales, the state’s biggest energy user, given costly power.
(By Gursimran Kaur; Editing by Devika Syamnath)
