Alcoa’s global review announced, capacity cut could go badly for WA workers

There are fears that a whole-of-company review of Alcoa’s smelting and refining operations could affect its Western Australian assets, where 4,000 workers are employed.

The West Australian notes that the Kwinana refinery, built in 1963, was among the company’s least profitable operations.

The US-based light metals company announced on Friday that it was seeking to reduce global smelting capacity by 14 per cent and refining capacity by 16 per cent.

This could affect WA badly, where 4,000 workers are employed at the Kwinana, Pinjarra and Wagerup sites. These combined represent 100 per cent of alumina demand.

Combined, the three plants produced about 11 per cent of alumina demand worldwide. The West Australian reports that the state's bauxite and alumina operations are world-class in their scale and among the best worldwide for Alcoa, but Kwinana has had efficiency issues related to its half-century-plus age.

Alcoa announced a strategic review on Friday in New York, covering its 500,000 metric tons and 2.8 million metric tons of smelting and refining capacity respectively.

“Our goal is to move down the global aluminum cost curve to the 38th

percentile and the global alumina cost curve to the 21st percentile by 2016,” Global Primary Products President Bob Wilt said in a statement.

“The results from this review will help achieve those goals.”

The company’s junior partner in Australia, Alumina Ltd, noted this morning that the Portland smelter in Victoria was not part of the review.

The Australian notes that since 2007, Alcoa has closed or divested 1.3 million tonnes of capacity.

This included the Point Henry smelter, which closed last year, shedding about 500 jobs. Another 500 jobs were lost at a nearby rolling mill and another near Sydney.

 

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