Alcoa to permanently close Kwinana alumina refinery in Western Australia
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More news: Shares in Alcoa lifted even though the alumina producer announced the permanent closure of its Kwinana refinery in Western Australia registering USD890 million ($1.35 billion) in restructuring and related charges during the third quarter of 2025.
At 12pm AEST, shares in Alcoa were up 1.55% to $51.13. However, its shares have tumbled 11.39% over the past 12 months.
Alcoa to permanently close Kwinana alumina refinery in Western Australia
The news: Alcoa has announced that it will permanently close its Kwinana alumina refinery in Western Australia due to the age of the facility, scale and operating costs, market conditions and bauxite grade challenges.
Production from the facility had already been fully curtailed from June 2024 but following "numerous studies and analyses" it will now be permanently closed.
The numbers: Restructuring and related charges related to the closure will come in at USD890 million ($1.35 billion), or USD623 million after tax, in the third quarter of 2025. This includes USD375 million of non-cash asset impairment charges.
Over the next six years, USD600 million will be spent on measures relating to the closure, including "existing asset retirement obligations and employee related liabilities", the company told the exchange.
In the fourth quarter of 2025, USD45 million will be spent on restructuring costs and USD30 million will be for asset retirement obligations.
Expected asset retirement obligations and environmental reserve spend will increase by $20 million to about $260 million for 2025, with the 2026 spend expected to be USD300 million.
The permanent closure of the refinery will reduce Alcoa's global consolidated refining capacity by 2.2 million metric tonnes to 11.7 million metric tonnes.
The context: The refinery currently has around 220 employees, which will be reduced over 2026 as the closure progresses, with some employees to remain beyond 2026 to prepare the site for future redevelopment.
Severance costs were recorded in the first quarter of 2024. The initial curtailment curtailment in 2024 affected around 800 employees and 250 contractors.
A separate charge of USD50 million will also be recorded in the third quarter of 2025, relating to asset retirement obligations in Brazil.
The source: ASX
