PITTSBURGH - Alcoa Corporation (NYSE: NYSE:AA) announced plans to fully curtail production at its Kwinana Alumina (OTC:AWCMY) Refinery in Western Australia. The process is set to begin in the second quarter of 2024 and will lead to a phased workforce reduction.
The Kwinana refinery, which has been operating at approximately 80% capacity since January 2023, is scheduled to cease all alumina production by the third quarter of this year.
Matt Reed, Alcoa's Executive Vice President and Chief Operations Officer, cited the aging facility, its scale, operating costs, bauxite grades, and market conditions as factors influencing the decision. Reed acknowledged the significant impact this curtailment would have on employees, business partners, and the local community. Alcoa has pledged to support the transition of its workforce, which will be reduced from roughly 800 employees to about 50 by the third quarter of 2025.
Alcoa's port facilities located near the refinery will continue operations, supporting the import and export activities linked to the company's Pinjarra Alumina Refinery. The curtailment of the Kwinana site is not expected to affect production at Pinjarra and Wagerup refineries.
The company anticipates an improvement of approximately $70 million annually starting in the third quarter of 2024 following the curtailment. However, the Kwinana refinery will still incur around $40 million in non-cash expenses annually while production is halted. Alcoa also expects to record restructuring charges between $180 million and $200 million in the first quarter of 2024 related to this curtailment.
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