Alcoa considers Wagerup option

Aluminium giant Alcoa is considering whether to keep alive a long-held plan for a multi-billion dollar expansion of its Wagerup alumina refinery.

Senior executives are understood to be trying to mount a case for seeking a second extension to a crucial WA Government environmental approval that allows for Wagerup’s refining capacity to be almost doubled to 4.7 million tonnes a year. If they decide to ask for another extension, they are expected to have to file an application within months.

Alcoa’s deliberations come amid heavy headwinds in the form of aluminium’s weak price and concerns over the metal’s most important growth market, China. The US-based giant has been curtailing million of tonnes of refining capacity around the world but has kept its three South West assets.

Alcoa is also yet to achieve a breakthrough on efforts to unlock the Warro tight gas field near Moora, which could solve its long-term energy supply needs but remains weighed down by technical challenges.

An Alcoa spokesman said it had not lodged an application to extend the environmental approval for Wagerup’s expansion. The approval is due to expire next September, unless Alcoa has begun substantial expansion work by then.

Alcoa received environmental approval - the most important permit - in 2006 before the global financial crisis put the project on hold. Alcoa asked for, and was granted, a five-year relief from 2011. The application was filed about a year before the relief was granted.

“Alcoa has not made any application regarding the environmental approval for the Wagerup Unit 3 expansion,” an Alcoa spokesman said. “We are still considering our options. As you know market conditions remain very challenging for the aluminium industry.”