Alcoa signage
Alcoa will phase out production at its Kwinana refinery in WA, with hundreds of jobs to go. Image by Joe Castro/AAP PHOTOS
  • economy, business and finance

Hundreds of jobs axed as Alcoa winds up old refinery

Aaron Bunch January 9, 2024

Alumina giant Alcoa will shut an ageing Perth refinery and slash hundreds of jobs.

The US-listed company on Tuesday said operating costs, bauxite grades and market conditions were behind the decision to close the 60-year-old facility.

Production will be phased out at the Kwinana facility during the second quarter of 2024.

About 800 employees and 250 contractors are likely to be affected.

Bauxite piles
 Operating costs, bauxite grades and market conditions are behind the closure decision. Image by Jono Searle/AAP PHOTOS 

The workforce will be reduced to about 250 in the third quarter when all alumina production will cease.

Some processes will continue until about the third quarter of 2025 when employee numbers will further reduce to about 50, saving the company approximately $US70 million ($A100 million) per year.

The federal government said it was disappointed by the decision and expected the company to support workers affected.

Minister for Resources and Northern Australia Madeleine King said the closure and job losses would have a ripple effect across the community.

“The closure of such a longstanding operation is disheartening for everyone involved,” she said.

“I expect that Alcoa will do everything it can to ensure workers affected and their families receive all the support they need during this difficult time, and I will hold them to account on this.”

Premier Roger Cook said it was a difficult day for Alcoa’s workers and a “very disappointing outcome”.

“People have worked on that site for many years, you actually have the sons and daughters, and there are grandsons and granddaughters, working on that facility in the same way that their predecessors did,” he said.

“So this is going to be a kick in the guts for the Kwinana and Rockingham communities and we will continue to make sure that we stand by them.”

WA Premier Roger Cook.
 Roger Cook said it was a disappointing outcome and would be a difficult day for Alcoa’s workers. Image by Richard Wainwright/AAP PHOTOS 

Mr Cook said his government would continue to work with Alcoa to ensure its other WA refineries at Pinjarra and Wagerup remained open.

The federal opposition said it was a major blow to Australian manufacturing and the WA economy and devastating for the company’s workforce.

Defence spokesman Andrew Hastie, who represents the nearby electorate of Canning, called for Alcoa to offer assurances its Pinjarra and Wagerup operations would remain open and rule out further job losses.

“The closure of the Kwinana refinery could have a ripple effect,” he said.

Alcoa’s executive vice president and chief operations officer Matt Reed said the company would support its employees as they transitioned to other jobs.

“We deeply appreciate the commitment and support of our many loyal employees, contractors and suppliers,” he said.

The company said the refinery had an annual production capacity of 2.2 million metric tonnes but had only been operating at about 80 per cent of that since January 2023.

“We remain committed to WA in the long term and will continue to assess options for the refinery, monitoring the factors that have led to the curtailment decision,” Mr Reed said.

The refinery recorded a net loss of about $US130 million ($A194 million) in 2023.

It’s understood to be one of the company’s oldest facilities and was using ageing technology that challenged its profitability.

The company’s port facilities next to the refinery will continue to import raw materials and export alumina produced at its Pinjarra refinery.

Alcoa will retain the Kwinana site and manage storage facilities for its production waste ponds.

Production at the Pinjarra and Wagerup refineries is not expected to be impacted by the Kwinana closure.

Alumina Limited, which owns 40 per cent of Alcoa’s Australian operation, said Kwinana was a “high cost” refinery and the remaining two refineries were more cost-efficient.