Alcoa Corp. (AA,AAI.AX) announced its decision to permanently close the Kwinana alumina refinery in Western Australia, following the curtailment of production in June 2024. The closure is driven by multiple factors, including the facility's age, high operating costs, market conditions, and challenges related to bauxite grade.
Despite the refinery shutdown, Alcoa will continue operating its port and rail infrastructure at Kwinana, along with its other strategically important assets in Western Australia and Victoria.
In connection with the closure, Alcoa will record restructuring and related charges totaling $623 million after-tax, or $2.41 per share, in the third quarter of 2025. This includes approximately $375 million in non-cash asset impairment charges.
The company's projected 2025 spending for asset retirement obligations and environmental reserves will increase by $20 million to approximately $260 million, with 2026 spending expected to reach around $300 million.
The Kwinana facility currently employs about 220 people. Workforce reductions will occur throughout 2026, although some employees will remain beyond that period to support site redevelopment. Severance costs were previously recorded in Q1 2024.
The closure will remove 2.2 million metric tons of annual refining capacity, reducing Alcoa's global consolidated capacity to 11.7 million metric tons. Additionally, the company anticipates a third-quarter 2025 operational tax expense of approximately $100 million—$30 million higher than prior estimates due to the restructuring impact.
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