Alcoa delays expansion at Wagerup and cuts production

US aluminium producer, Alcoa Inc, has announced that it is postponing plans for a $1.5 billion expansion of its Wagerup alumina refinery, in Western Australia, until market conditions improve.

The Wagerup mine is operated by Alcoa World Alumina & Chemicals, a joint venture between Alcoa and Alumina Ltd.

The company, which is 60% owned by Alcoa, currently produces around 25% of the world’s alumina.

Alcoa has also reported that it is cutting aluminium production by 350,000 tonnes per year, with immediate effect.

The move which follows a cut of 265,000 tonnes in October, creates a combined reduction of 615,000 tonnes, or 15% of the group’s annual output.

Alcoa’s Australia managing director, Alan Cransberg, describes Wagerup 3 as one of the company’s best brown field opportunities and is confident that the expansion will go ahead when market conditions improve.

Mr Cransberg did however add that work needed to be done on the energy supply for the project and that it will also require a full understand the Australian Government’s emissions trading scheme.

In related news, CBH Resources appears to be moving closer to placing its Endeavour zinc mining operation, in central New South Wales, on care and maintenance, again because of a softening market.