Alcoa Kwinana closure: US giant has confirmed it will shut its alumina refinery at industrial hub

Alcoa has confirmed it will shut its Kwinana alumina refinery, with production to cease by the end of September and the current 1200-strong workforce culled to just 50 by the end of next year. The closure represents a major blow for Premier Roger Cook’s southern suburbs electorate, with around half the refinery’s workforce living locally. The West Australian on Monday revealed US industrial giant Alcoa was on the brink of a major announcement and that multiple sources believed the 60-year-old plant would shut. Alumina Limited — an Australian partner with Alcoa — then requested a trading halt on the Australian Securities Exchange on Tuesday morning ahead of revealing its plans. In a subsequent statement, Alcoa executive vice-president and chief operations officer Matt Reed confirmed the company would “fully curtail production in 2024” at the Kwinana facility in a staged process. “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,” Mr Reed said. “We deeply appreciate the commitment and support of our many loyal employees, contractors, and suppliers at our Kwinana refinery, which has made a major contribution to Western Australia’s economic development over the last 60 years of continual operation.” The blow to WA’s resources sector comes less than a day after it was revealed hundreds of jobs would go after the administrators of Panoramic Resources pulled the pin on mining operations at the Savannah nickel-copper-cobalt project near Halls Creek. The “curtailment” of the Kwinana refinery will involve downsizing the current workforce to about 250 by the third quarter of 2024, at which point all alumina production will cease. Alcoa said certain operations would continue at the plant for about a year – until the third quarter of 2025 – when worker numbers would be slashed further to just 50. “We will work closely with our employees to provide support with transitioning to other opportunities,” Mr Reed said. “This includes potential redeployment within our business or assistance to facilitate employment at other workplaces.” According to an Alcoa fact sheet, the refinery employees 860 workers directly as well as another 320 contractors. More than half of those workers live locally in Kwinana, Cockburn and Rockingham. The Alcoa statement makes no mention of what will happen to the hundreds of contractors working at the plant. The company said it would continue to “actively manage” the refinery and storage facilities and that its nearby port would still be used to import raw materials and alumina produced by the company’s Pinjarra refinery. Production at both Pinjarra and Alcoa’s Wagerup refinery will not be affected by the decision. “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 West Australian understands workers at the refinery were informed of the closure around the same time as the market on Tuesday morning. A memo circulated to employees said there would be “no significant change to our workforce numbers” in the first quarter of 2024 while production levels were maintained. “In the second quarter we will reduce our workforce to about 650 employees as we start to scale back operations,” the memo said. “Production will cease in the third quarter and at the same time there will be a further reduction in our workforce to about 250 employees who will help us operate the refinery to manage the water balance. “The refinery circuit will stop in the third quarter of 2025 and a further step down to 50 employees will occur at this time.” Alcoa said its Kwinana refinery recorded a net loss of $US130 million ($193m) in 2023, which was expected to improve by about $US70m from 2024-25 as a result of the curtailment. Mr Cook — whose Kwinana electorate takes in the refinery — labelled the closure a “very disappointing outcome” and called on Alcoa to “do everything it can to support its workforce through this transition”. “My Government will step up to provide supports for local workers to retrain, reskill and look for new career opportunities in the local area,” he said. “Kwinana is the industrial heart of Perth, and has a bright future with new job-creating industrial projects emerging on the strip — keeping Kwinana strong for generations to come.” In an accompanying statement, the Government said the Rockingham Jobs and Skills Centre was available to work with Alcoa to match redundant workers with new employers. A dedicated team at South Metropolitan TAFE has also been assembled to provide “tailored free career and training advice”. Liberal Leader Libby Mettam blamed “tortuous environmental approval processes and energy supply uncertainty” for Alcoa’s decision. She claimed Alcoa had willingly reduced its operating capacity to avert gas shortages and deserved more support from the Government. “Alcoa understands its obligations to the environmental approval process and has a long history of compliance, however the Cook Government has made a career of delaying and complicating the process, locking Alcoa out of accessing higher grade ores, without which the business is not viable,” she said. “This a very shabby way to treat a company that has been operating environmentally safely and employing thousands of Western Australians for 60 years.” Alcoa has had very public troubles with environmental approvals, facing concerns mining plans would endanger Serpentine Dam, a source for almost a fifth of Perth’s drinking water. In December, the Environmental Protection Authority confirmed a full-scale review of Alcoa’s bauxite mining plans through to 2027. But the business was also given an exemption which allowed mining to continue. Federal Resources Minister Madeleine King — whose Brand electorate also encompasses Kwinana — echoed Mr Cook’s disappointment at the closure of the refinery. “We understand that Alcoa is faced with difficult considerations, including the age of the facility, a constrained location and challenging market conditions, however, 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.” Ms King added she had been assured Alcoa would continue to operate its Wagerup and Pinjarra refineries and that the shuttering of Kwinana “will not affect the broader supply chain of alumina, which is essential for our future transition towards net zero emissions”. The Australian Manufacturing Workers’ Union said Alcoa’s decision ended months of uncertainty, heighted last October when incoming chief executive Bill Oplinger described the Kwinana operation as “marginal” and flagged both “ curtailment and closure”. Deputy Opposition Leader Sussan Ley said Prime Minister Anthony Albanese shared in blame for the closure through “anti-business” policies in energy, industrial relations and tax. “Because of Anthony Albanese’s failures, Western Australians have been hit hard by a cost of living crisis and today because of the Prime Minister’s inaction, hundreds will now lose their jobs,” Ms Ley said. “Anthony Albanese promised that as Prime Minister he would make things in Australia but the only thing growing is a devastatingly long list of business closures.” AMWU state secretary Steve McCartney said it was essential Alcoa honoured redundancy provisions with its workforce. “Job losses are never a good thing, but when they happen, the least a company can do is keep their workers informed and ensure they stick to their agreed entitlements,” he said. “Our members are already navigating a cost-of-living crisis and now must deal with the uncertainty of their job coming to an end without any transition plan, such as training for future work in new industry.”