Alcoa to permanently close Kwinana refinery

Alcoa (AA) announced that it will permanently close its Kwinana alumina refinery in Western Australia. This decision follows the curtailment of production at the refinery in June 2024. Alcoa has undertaken numerous studies and analyses since curtailment to determine the future of the refinery, including restart and closure. Multiple factors led to the decision to permanently close the refinery, including the age of the facility, scale and operating costs, market conditions and bauxite grade challenges. Alcoa will work with relevant stakeholders on a safe and responsible closure of the refinery and associated residue storage areas. Additionally, Alcoa will begin to prepare the site for new economic development opportunities, and as part of this, the Company will work with the Western Australian State Government on potential future land use options. Alcoa’s port and associated rail facilities at Kwinana will continue to operate, as will Alcoa’s strategically important other Western Australian and Victorian operations. In the third quarter of 2025, Alcoa will record restructuring and related charges of approximately $890 million ($623 million after-tax, or $2.41 per share) related to the permanent closure, including approximately $375 million of non-cash asset impairment charges. Cash outlays related to the permanent closure of the site are expected to approximate $600 million over the next six years (which includes existing asset retirement obligations and employee related liabilities), with approximately $75 million to be spent in the fourth quarter of 2025 for restructuring costs of $45 million and asset retirement obligations of $30 million. The Company’s outlook for total spend in 2025 for asset retirement obligations and environmental reserves is expected to increase by $20 million to approximately $260 million to include the spend related to the closure of the Kwinana refinery; 2026 asset retirement obligation and environmental total spend is expected to approximate $300 million. The projected cash outlays do not include any potential future proceeds from planned redevelopment efforts for the refinery site, which would be expected to cover a significant portion of the cash costs of the entire site’s closure.