Kwinana closure savings lag as Alcoa tackles environmental hurdles with $260M spend

Alcoa is set to invest US$163 million (AU$260 million) in a now-mandatory water management system at its caustic red mud storage site in Kwinana, as savings from the shutdown of its 60-year-old alumina refinery have been slower than anticipated.

The closure, announced in January 2024, was initially expected to cost up to US$200 million (AU$319 million), including US$81 million earmarked for water management and US$55 million allocated for the redundancy or redeployment of 800 employees.

Furthermore, Alcoa intends to spend US$70 million in 2024, preparing for a shift to a new mining area within the Jarrah forest, with more significant investments expected in 2026. This comes as the company continues to face scrutiny in Western Australia (WA) after revelations two years ago that its strip mining activities near Serpentine Dam posed risks to Perth’s water supply.

Despite these challenges, Alcoa received permission from the WA government in December 2024 to continue operations while the independent Environmental Protection Authority reviews its activities. Under a revised regulatory framework, WA Premier Roger Cook emphasised that the new approach offers enhanced environmental protections.

Alcoa’s chief executive officer, Bill Oplinger, highlighted the importance of advancing mining approvals in WA, underscoring the company’s commitment to sustainable operations. In the coming months, Alcoa is expected to release for public consultation a detailed environmental assessment of its proposed expansion of the Huntly mine, located inland of Pinjarra.