Following the announcement Alcoa will close one of its refineries in Western Australia, the impact is being laid bare, with one economic expert saying it will cut roughly $650 million from the state's economy per year.
Key points:
- The impact of the closure is expected to be hundreds of millions of dollars per year
- Roughly 1,000 people are tipped to lose their jobs as a result
- The closure provides staffing opportunities for mining companies
The aluminium giant announced yesterday it would shut the plant, which is located south of Perth and was commissioned in 1963.
The planned closure is expected to see 750 jobs axed and another few hundred contractors also lose employment by late 2025.
Bankwest Curtin Economics Centre director Alan Duncan said losing that revenue would be significant not just for the immediate area, but for the wider WA economy.
"Western Australia overall is one of the largest export contributors in the world when it comes to aluminium," Professor Duncan said.
"The medium- or longer-term impact depends upon the degree to which those workers who are losing jobs at Alcoa are able to be redeployed either within Kwinana in other industry sectors, or in the aluminium and bauxite sector in other regions of Western Australia."
A shock announcement
In 2022, Alcoa estimated the Kwinana plant was injecting $161 million in salaries, wages and benefits into the WA economy.
The company blamed the age, scale and operating costs of the refinery for the closure, along with low-grade ore and current market conditions.
The Kwinana refinery is fed primarily by ore from Western Australia's Darling Scarp, which is considered low quality.
Alcoa also part owns and operates two other newer processing facilities in the state.
Workers at the Kwinana site said that despite rumours having circulated that the plant was not sustainable, yesterday's announcement still came as a shock.
Workers' skills sought
Resources commentator Tim Treadgold said the workers affected by the plant's closure had skills in high demand.
"It's basically a large chemical plant digesting ore, and that's exactly what happens at nickel refineries, at lithium refineries, in gold refineries — these are the skills that the mining industry wants," Mr Treadgold said.
"There are probably a number of mining companies around Australia clapping their hands and saying, 'Well now we can get our hands on some decent workers.'"
Mr Treadgold said the writing had been on the wall for Alcoa's Kwinana refinery for some time.
"It's been on life support for probably a decade or two," he said.
"It's high cost, it's old, it had trouble getting access to high-quality ore, the forest is getting closed off to it and it's got two rival refineries just down the coast that are significantly cheaper to operate.
"Somehow Alcoa's kept it going — bandaids and glue — and now it's time to bring it to an end."
Loading