Alumina (ASX: AWC) stock price skyrockets on Kwinana refinery closure

January 09, 2024 04:38 PM AEDT | By Team Kalkine Media

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Alumina (ASX: AWC) stock price skyrockets on Kwinana refinery closure — Image source: shutterstock

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Alumina Ltd (ASX: AWC) recently experienced a notable surge in its stock value, climbing by 7.69% to close at AU$0.98 apiece on 9 January 2024. This rise marks the highest level achieved since October 18, 2023, signifying a significant upward trend in the company's market performance.

The noteworthy surge in Alumina's stock value represents the company's most substantial intraday percentage leap since mid-December, sparking interest and attention within the market and among investors.

Alcoa Corp declared its decision to entirely curtail production at the Kwinana Alumina Refinery located in Western Australia, effective from the second quarter of 2024 onwards. This announcement significantly influenced AWC's market dynamics and prompted various responses from stakeholders.

Alumina voiced its support for Alcoa's decisive action, citing substantial losses sustained by the Kwinana refinery. AWC emphasized critical factors contributing to the decision, including the refinery's age, scale, operating expenses, and the declining quality of bauxite grades.

Kwinana refinery logged net loss of about AU$130 million in 2023

The Kwinana Alumina Refinery reported a significant net loss amounting to approximately $130 million in the fiscal year of 2023, underlining the financial challenges faced by the facility and its impact on Alumina Ltd's overall financial standing.

The curtailment plan encompasses a phased reduction of the refinery's workforce, reducing the number of employees from approximately 800 at the beginning of 2024 to an estimated 50 employees by the third quarter of 2025. This strategic workforce reduction is expected to streamline operations amid production cutbacks.

Share performance of AWC

Despite the recent positive movement, Alumina Ltd experienced a significant decline in its stock value, plummeting by nearly 40% throughout the fiscal year of 2023. This decline underscores the challenges and fluctuations the company encountered in the past year.

Conclusion

In conclusion, the surge in Alumina’s stock value represents a significant development amid the company's response to Alcoa Corp's decision to curtail production at the Kwinana Alumina Refinery. The intricate financial implications, workforce reduction, and market dynamics play a crucial role in shaping AWC's current trajectory.

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