Alcoa has drawn the curtain on its historic Kwinana alumina refinery. The 60-year-old facility in Western Australia faces permanent closure following 18 months of suspended operations.
The American aluminium giant confirmed the decision on 30 September 2025. It marks the end of an era for Perth’s industrial heartland.
The closure will trigger a $1.35 billion restructuring hit for Alcoa. Around 220 workers currently face an uncertain future as the company begins its gradual wind-down through 2026.
What Forced the Shutdown
Multiple factors converged to seal the refinery’s fate. Alcoa cited the facility’s age, operating costs, market conditions, and declining bauxite grades from nearby mines.
The company undertook extensive studies since suspending production in June 2024, exploring both restart and permanent closure options.
Matt Reed, Alcoa’s Executive Vice President and Chief Operations Officer, didn’t mince words. “Alcoa operated the Kwinana refinery for a number of years in a challenging environment and made the difficult decision to permanently close the facility after unsuccessfully exploring multiple options for a sustainable path to restarting,” he stated.
Matt Reed is Executive Vice President and Chief Operations Officer
The facility had been running at just 80% capacity since January 2023. It recorded a net loss of approximately $198 million in 2023.
The Human Cost: Jobs Vanish Gradually
The workforce reduction follows a carefully mapped timeline. The refinery currently employs around 220 people, which will decrease over 2026 as the closure progresses.
Some employees will remain beyond 2026 to prepare the site for future redevelopment. Severance costs were recorded in the first quarter of 2024.
The initial curtailment in 2024 already affected approximately 800 employees and 250 contractors. Local communities like Kwinana and Rockingham face the ripple effects of these job losses.
Financial Fallout and Restructuring Costs
The closure carries a hefty price tag for Alcoa. Restructuring and related charges total $1.35 billion (US$890 million), or $945 million after tax, in the third quarter of 2025.
This includes $569 million of non-cash asset impairment charges. Over the next six years, Alcoa anticipates spending an additional $910 million related to asset retirement obligations and employee-related liabilities.
The immediate costs mount quickly:
- Fourth quarter 2025: $68 million in restructuring costs
- Fourth quarter 2025: $45 million for asset retirement obligations
- 2025 total: Expected asset retirement and environmental reserve spend increases by $30 million to about $395 million
- 2026 total: Expected spend of $455 million
The permanent closure will reduce Alcoa’s global consolidated refining capacity by 2.2 million metric tonnes to 11.7 million metric tonnes.
What Happens to the Site
Alcoa won’t abandon the location entirely. The company will work with relevant stakeholders on a safe and responsible closure of the refinery and associated residue storage areas.
Alcoa will begin to prepare the site for new economic development opportunities, working with the Western Australian State Government on potential future land use options.
The port and rail facilities at Kwinana will continue operating. 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.
Location of Kwinana Oil Refinery
Impact on Australia’s Alumina Industry
The closure represents a significant blow to Australia’s refining capabilities. The decision marks a setback for Australia’s ambition to expand its downstream processing and refining capabilities.
Western Australia remains home to major alumina producers including Alcoa’s other refineries at Pinjarra and Wagerup, plus South32’s Worsley facility.
The state’s alumina sector faces ongoing challenges from rising energy costs and regulatory pressures around bauxite mining in native forests.
Government and Community Response
Political leaders expressed disappointment but acknowledged the economic realities. Premier Roger Cook described it as “a very disappointing outcome” for the Kwinana community.
Federal Industry Minister Catherine King assured workers that the curtailment of production at the Kwinana refinery will not affect the broader supply chain of alumina, which is essential for our future transition towards net zero emissions.
Local member Andrew Hastie raised concerns about broader implications. “The closure of the Kwinana refinery sends Australian industry and jobs to places like China and Saudi Arabia – just as we need to be growing our industrial base for strategic reasons,” he stated.
Environmental groups see different opportunities. The Conservation Council of WA highlighted the need for green jobs initiatives to absorb displaced workers and suggested extensive rehabilitation work in the northern jarrah forests.
Market Context and Global Alumina Trends
The closure occurs amid complex market dynamics. While alumina prices have shown strength in some regions, Australian producers face structural disadvantages.
Energy costs have surged dramatically. Gas prices have more than doubled since 2019, with major suppliers Woodside and Santos increasing prices by 96% and 68% respectively since 2020.
The global alumina market continues evolving. Chinese production constraints and supply chain pressures have created volatility, but Australia’s high-cost producers struggle to compete.
Permanently closing Kwinana’s 2.2 million metric tons of annual capacity brings Alcoa’s global consolidated refining capacity to 11.7 million metric tons.
What This Means for Workers and Investors
For affected employees, transition support remains limited. Alcoa has committed to working with workers on redeployment within its other operations or assistance finding new employment.
Alcoa’s Kwinana alumina refinery operated for 60 years before permanent closure.
For investors, the closure aims to improve profitability despite the short-term hit. The company previously estimated annual improvements of approximately $106 million beginning after full curtailment.
However, the Kwinana curtailment has been slow to deliver savings due to high transition and holding costs Alcoa’s Kwinana closure bill jumps by $131 million, according to CFO Molly Beerman.
Alcoa shares traded mixed following the announcement as markets absorbed the near-term costs against longer-term benefits.
Also Read: RBA Rate Cut Decision: Why September’s Meeting Could Dash Hopes for Immediate Relief
Frequently Asked Questions
Q.When will the Kwinana refinery completely close?
A. The facility stopped production in June 2024. The workforce will gradually reduce through 2026, with some employees staying beyond that to prepare the site for redevelopment.
Q.How many jobs will be lost?
A. Approximately 220 current employees face job losses, with reductions occurring throughout 2026. The initial curtailment in 2024 already affected 800 employees and 250 contractors.
Q.Will Alcoa’s other WA refineries close?
A. No. Alcoa confirmed that production at its Pinjarra and Wagerup refineries is not expected to be impacted. These facilities will continue operating.
Q.What caused the closure?
A. Multiple factors including the 60-year-old facility’s age, high operating costs, challenging market conditions, and declining bauxite grades from nearby mines made restarting economically unviable.
Q.What will happen to the Kwinana site?
A. Alcoa will safely decommission operations and prepare the site for future redevelopment, working with the WA government on potential land use options. Port and rail facilities will continue operating.
Q.How much will the closure cost Alcoa?
A. Total costs reach $1.35 billion in restructuring charges plus an additional $910 million over six years for asset retirement obligations and employee liabilities.
