Alumina rallies 8% following Kwinana closure announcement
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More news: Alumina shares have surged 8% in afternoon trading after it and partner Alcoa announced plans to curtail production at the JV’s Kwinana alumina refinery in WA. The move is expected to cut the project's workforce from 800 to roughly 250 by the third quarter this year.
Alumina confirms Kwinana shutdown and job cuts
The news: ASX-listed Alumina has confirmed production will be fully curtailed at joint venture partner Alcoa's Kwinana Refinery in Western Australia amid approval delays, operating costs and tough market conditions. The move is expected to cost Alumina around $130 million in 2024, $60 million in 2025 and a further reduced amount in 2026.
In a statement, Alumina said the production cut would begin in the second quarter of 2024, along with a workforce cuts from roughly 800 employees currently to around 250 by the third quarter of the year, when all alumina production will end. Employee numbers will be further reduced to around 50 by the third quarter of 2025 while residual processes at the refinery continue.
Alumina shares were trading 0.27% higher to $0.912 by 2pm AEDT, following a trading halt ahead of the announcement.
Alumina in trading halt ahead of potential Alcoa output cut
The news: Shares in mining investor Alumina have been placed in a trading halt ahead of an expected announcement by partner Alcoa about cutting production at one of its Western Australian refineries.
The numbers: ASX-listed Alumina holds a 40% stake in its Alcoa World Alumina and Chemicals (AWAC) joint venture with Alcoa. The US aluminium giant plans to curtail production at the JV’s Kwinana alumina refinery in WA, which currently operates at 80% capacity, Bloomberg separately reported on Monday.
The context: The AWAC JV, which operates three refineries in WA, has faced delays for securing its bauxite mining approvals in WA, resulting in a half-year loss. Bloomberg reported the planned output cut this year was part of Alcoa’s cost-cutting measures. The two JV partners previously shut more than three million tonnes of refinery capacity globally in 2015 and 2016 amid a prolonged downturn in prices.The Kwinana plant has a 2.2 million metric tonne capacity and accounts for about 1.2% of global output of the raw material. Alumina said in a statement to the ASX its trading halt would remain in place ahead of an expected decision by Alcoa.
The sources: ASX announcement, Bloomberg, ASX Announcement, ASX Announcement
