Alcoa to mothball Western Australia alumina refinery, up to 1050 staff at risk (updated)

Alumina

09/01/2024 03:17

(Adds details about the closure and response from state and
federal politicians in paragraphs 2 to 11)
    By Lewis Jackson and Rishabh Jaiswal
       Jan 9 (Reuters) - U.S. aluminum producer Alcoa  AA.N 
said on Tuesday it planned to stop production in 2024 at its
loss-making Kwinana Alumina Refinery in Western Australia
because of challenging market conditions and the facility's age.
    Production at the facility which first started in 1963 will
cease in the third quarter of this year, when Alcoa will cut its
employees to roughly 250, from around 800 currently. In the
third quarter of 2025, the workforce will shrink again to 50.
    The plant, jointly owned with Alumina Ltd  AWC.AX  will
continue to be "actively managed," according to Alcoa. 
    Alcoa Executive Vice President Matt Reed said the decision
reflected the 60-year-old plant's age, scale and cost to operate
as well as current market conditions.
    “Today’s curtailment decision comes only after thorough and
careful deliberation, and we acknowledge that this action will
impact workers, business partners, and the community,” Reed
said.”
    Western Australia Premier Roger Cook and Federal Resources
Minister Madeleine King said the decision was "disappointing." 
    Cook said the state government would help the roughly 800
employees and 250 contractors affected look for new work or
retrain.
    “Today will be a difficult day for workers in my local
community of Kwinana," Cook said. “My government will step up to
provide supports for local workers to retrain, reskill and look
for new career opportunities in the local area."
    The plant's associated port facilities and Alcoa's Pinjarra
and Wagerup refineries in Western Australia are unaffected by
the shutdown.
    Co-owner Alumina said in a statement it fully supported the
decision and the Pinjarra and Wagerup facilities were in the
first quartile globally for alumina refining costs and
emissions.
    Alcoa said the refinery recorded a net loss of roughly $130
million last year. The closure is expected to save $70 million
annually starting in the third quarter of 2024.

    

 (Reporting by Rishabh Jaiswal in Bengaluru and Lewis Jackson in
Sydney; Editing by Rashmi Aich & Shri Navaratnam)
 ((rishabh.jaiswal@thomsonreuters.com;))