The US aluminium powerhouse is evaluating several alternatives, one of which is the potential closure of the Kwinana alumina refinery. This decision comes amid the company’s efforts to get approval for the clearance of more Jarrah forest for bauxite mining. Concerns have been raised over the potential impact of this mining activity on the drinking water supply of Perth. As per the reports from Wall Street analysts the American organisation is exploring many strategies to reduce expenses and enhance profitability at the factory, which has been operational for six decades.
The refinery, which produces alumina from bauxite for shipment to aluminium smelters, employs around 1200 people, including 900 employees and 300 contractors. The announcement comes barely two weeks after spokesperson in Australia said that the company has no intentions to cut output at Kwinana further.
"They're working very aggressively to identify savings, we've got a great pipeline of opportunities. This is our top priority, we're making progress. We have the right team in place for success, and we understand the improvements that our stakeholders are expecting," said one of the members of the company.
The refinery has operated at a capacity utilisation rate of 80 per cent for about a year. This reduction in production was initially caused by a scarcity of gas supply and subsequently prolonged owing to the unavailability of higher-quality bauxite grades. The company’s inability to get clearance for clearing additional sections of Jarrah forest contributed to this situation.
Reports suggests said that the business was pursuing improvements in labour and maintenance efficiencies and new markets for Kwinana's unique capacity to produce non-metallurgical alumina used in water treatment and other applications. Due to increasing costs and decreased output, the company is mining lesser-grade bauxite in WA, costing them roughly $US45 million ($71 million) every quarter. Investors had been warned that the scenario would last 12 to 18 months, but the company intends to process lower-grade bauxite until at least 2027. It anticipates saving $US10 million ($16 million) annually by eliminating 90 jobs at Kwinana by early 2024.
The American giant has resubmitted their mining plan for the period 2023-2027 for assessment by a bureaucratic committee overseen by Premier Roger Cook's Department of Jobs, Tourism, Science, and Innovation. According to reports, the company made three compromises in the revised plan:
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