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WA Alcoa refinery closure could wipe out $650m from economy, expert says

The closure of a major mining giant’s refinery employing the “lion’s share” of workers will cost one state’s economy about $650m per year, an economic expert has warned as the company prepares to cut worker numbers down to just 50 over a year.

US-based Alcoa Corporation announced production at their Kwinana Alumina Refinery in Western Australia would be curtailed over the year, starting from the second quarter.

550 of the 800 jobs at the refinery will be cut by the third quarter of 2024, the company said in a lengthy statement on Tuesday.

But by the third quarter of 2025 this number will be reduced to 50 due to “certain processes” continuing at the plant.

Some 250 contractors at the refinery are also understood to be affected – bringing the potential number of jobs cut to about 1000.

The move has drawn criticism from WA’s State Labor Government and Liberal Opposition, with Premier Roger Cook calling on Alcoa to “do everything it can to support its workforce through this transition”.

Bankwest Curtin Economics Centre director Alan Duncan said without any redeployment of workers, the closure of the Kwinana refinery would equate to a loss of about $650m in economic output for WA’s state economy.

He said the true figure would depend on whether workers could be redeployed within the company, or to other industry sectors locally or in other regions across the state.

“How the closure of Alcoa ultimately plays out is hard to say,” Professor Duncan said.

“There will be a negative short-term impact of the closure on contractors and other supporting industry sectors.

“These will be offset through displaced workers from the refinery being redeployed … or picking up employment in other industry sectors in the locality.”

Matt Reed, Alcoa’s Executive Vice President and Chief Operations Officer, said the closure was based on the refinery’s age, scale, operating costs and the current bauxite grades being processed at Kwinana.

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