Alcoa, a global leader in aluminum production, recently announced its decision to scale back the full capacity of its Kwinana refinery in Western Australia by the third quarter of 2024. This strategic move aims to curtail operational costs, with expected savings of up to $190 million for the company.
The Kwinana refinery, a significant player in Western Australia’s economy for over 60 years, has faced challenges such as natural gas shortages and declining bauxite grades. These factors led to a gradual decrease in Alcoa’s total alumina production in the region, with Kwinana’s output dropping from 1.92 million tons in 2022 to 1.46 million tons in 2023. The refinery’s capacity utilization rate also saw a significant reduction. Despite the reduction at Kwinana, Alcoa’s port facilities in the area will remain operational for importing raw materials and exporting products from its Wagerup and Pinjarra refineries.
The closure of the Kwinana refinery is set to have considerable implications for Australia’s alumina production. In 2023, Alcoa’s three alumina plants in Western Australia accounted for 42.9% of the country’s total alumina output, which was estimated at 19.04 million tons. The approved bauxite mining license for 2023-2027 will allow Alcoa to access higher-grade bauxite mines starting 2024, potentially increasing the production of its Wagerup and Pinjarra plants. These enhancements are expected to partly offset the production deficit caused by the Kwinana shutdown.
Post the Kwinana refinery closure, Alcoa’s alumina production in Australia is projected to reach 7.78 million tons in 2024 and 7.58 million tons in 2025. This represents a slight decrease from the 2023 production levels, with a shortfall of only 0.58 million tons anticipated.
The future of the Kwinana refinery remains uncertain, as Alcoa has not announced any plans for its potential restart. This development has sparked market speculations regarding the long-term strategy of the company in the global alumina market. The move aligns with industry trends where companies are adapting to changing market conditions, focusing on cost-efficiency and resource optimization. 
