Bauxite and alumina: Alcoa to permanently close Point Comfort refinery

On 16 December, US aluminium producer Alcoa Corporation announced the permanent closure of its 2.3Mtpy Point Comfort alumina refinery in Texas, USA. Alumina production has not taken place since the plant was taken off-line in June 2016. The refinery previously produced standard non-metallurgical grades of alumina.

The closure of the plant is expected to result in an annual net income improvement for Alcoa of US$15M (after-tax and noncontrolling interest), giving it cash savings of US$10M.

As of October 2019, Alcoa Corporation has been conducting a review of its global production capacities in an effort to lower costs and increase profitability. The review includes 4Mtpy of alumina capacity, around 27% of the company’s total refining ability. It has been restructuring through the final quarter of 2019.

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The original closure of the refinery in 2016, along with the closure of Sherwin Alumina’s Corpus Christi plant the same year (both located on the US Gulf Coast), resulted in a decline in the availability of standard non-metallurgical alumina grades to the US market. Consumers have since looked overseas for sources of alumina hydrate and, to a certain extent, calcined alumina. The Alunorte alumina plant in Brazil has increased its exports of hydrate to fill some of this gap; it was already a major supplier of hydrate to Japan and has since become an important supplier to the USA.

In 2018, the global alumina industry was disrupted again, as Alunorte was forced to reduce its production levels to 50% of capacity following an environmental ruling by the Brazilian government. This embargo was lifted in May 2019 and, by the second half of 2019, Alunorte had returned to full production levels.

The Point Comfort refinery is owned by Alcoa World Alumina and Chemicals (AWAC), in which Alcoa Corporation has a 60% share, with the remaining 40% accounted for by Australian company Alumina Limited. The joint venture was established in 1995 and has its headquarters in Victoria, Australia.

Alcoa Corporation claims to account for around 10% of the world’s alumina production, around 90% of which is metallurgical-grade. Its current alumina capacity includes plants in Spain, Australia and Brazil which produce some non-metallurgical products including alumina hydrate and calcined alumina. The company also has an interest in bauxite production in Guinea through a 45% share of Halco Consortium.

In Spain, it operates the San Ciprian plant with around 1.5Mtpy capacity, of which a third is estimated to be for non-metallurgical grades. Meanwhile, the Kwinana refinery in Western Australia has a total capacity of 2.19Mtpy with around 15% of sales for non-metallurgical applications. In Brazil, Alcoa’s Pocos de Caldas alumina plant has 390ktpy of capacity (on an alumina basis), with almost half for non-metallurgical products, mainly commodity hydrate.

The tenth edition of Roskill’s report on non-metallurgical bauxite and alumina was released in December 2019 and includes analysis of recent industry trends on supply, demand, trade and prices, as well as providing forecasts over the next decade to 2029 and profiles of the main producers. Click here to download the brochure and sample pages for the report, or to access further information.

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This article was written by Suzanne Shaw. Please get in touch below if you wish to discuss further:

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