Alcoa Corp. announced it plans to fully curtail production in 2024 at its Kwinana Alumina Refinery in Western Australia, with the process beginning in the second quarter. The refinery has an annual nameplate production capacity of 2.2 million metric tons (mt). The company said it has been operating at approximately 80% of its nameplate capacity since January of 2023.
The decision to curtail the 60-year-old facility is based on a variety of factors, including its age, scale, operating costs and current bauxite grades, in addition to current market conditions, explained Matt Reed, Alcoa’s recently appointed executive vice president and COO.
The Kwinana refinery posted a net loss (pre-tax and non-controlling interest) of approximately $130 million in 2023. The company expects annual improvements of approximately $70 million beginning in the third quarter of 2024 as a result of the curtailment. The refinery will continue to incur approximately $40 million of non-cash depreciation, depletion and amortization expenses while it sits idle.
The company said the curtailment will include a phased reduction of the workforce from around 800 employees at the start of 2024 to approximately 250 in the third quarter of this year, when all alumina production will cease. Certain processes, however, will continue until about the third quarter of 2025, when employee numbers will be further reduced to approximately 50.
The refinery and associated residue storage facilities will continue to be actively managed. Alcoa’s port facilities located alongside the refinery will continue to operate to import raw materials and export alumina produced at the company’s Pinjarra Alumina Refinery. Production at the Pinjarra and Wagerup refineries is not expected to be impacted by the curtailment at Kwinana.
