ALCOA’S port and rail facility at Kwinana will continue to run in spite of the US-based corporation’s $800 million plan to permanently close and decommission its alumina refinery.
Production at the refinery ended almost two years ago and Alcoa told the New York Market on Sunday night that closure of the site was its best option.
Alcoa continues to operate its Wagerup and Pinjarra refineries, which process bauxite from the Darling Scarp and the Kwinana port and rail infrastructure provides a critical export channel for alumina produced at these sites while rail links allow efficient movement of materials between inland mines/refineries and coastal shipping terminals.
The port and rail assets are not part of the decommissioning plan and will remain operational.
The refinery closure eliminates 2.2 million tonnes of annual alumina production, which means fewer bulk shipments will be outbound from Kwinana which could impact berth utilisation, logistics contracts, and support services like stevedoring and tug operations.
Alcoa is working with the WA government to explore future land use options for the site, which could eventually lead to new industrial tenants, green energy projects, or logistics hubs, reshaping port demand in the long term.
The refinery’s closure is estimated to cut $650 million annually from WA’s economy.
A media release from Alcoa said it had 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,” the release said.
Matt Reed, executive vice president and COO for Alcoa said it had 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.
“We appreciate the dedication and support of our Kwinana employees, contractors and suppliers who have made a major contribution to Western Australia’s economic development and prosperity over more than six decades.”
“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,” the release said.
“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.
‘The Kwinana refinery currently has approximately 220 employees; this number will be reduced during 2026 as the closure progresses. Certain employees will remain beyond 2026 to prepare the site for future redevelopment. Associated severance costs were previously recorded in the first quarter of 2024.”
The closure of Kwinana’s 2.2 million metric tons of annual capacity will bring Alcoa’s global consolidated refining capacity to 11.7 million metric tons.
Based on recent pricing, the company expects the third quarter 2025 operational tax expense to approximate $100 million, an increase of $30 million from the previous estimate due to the impact of the restructuring charge for the Kwinana refinery closure.