Green energy tipped as Kwinana industry’s saviour after closures of BHP, Alcoa, IGO and Wyloo

We don’t want to look back in years to come and regret not making the investment and policy decisions needed now to realise the full opportunity before us, says Kwinana Industries Council chief executive David Harrison.

The Kwinana industrial area, which has been operating for 60 years, is a major part of what the State Government has dubbed the Western Trade Coast.

The Western Trade Coast generates about $15 billion per annum, employs more than 40,000 workers — many of which live locally — and contributes one per cent to Australia’s GDP.

This year, the area has been rocked by high-profile closures driven primarily by instability in the nickel and alumina markets.

In January, Alcoa shared the shock news it would be shutting its Kwinana refinery.

The move was expected to cost the local economy more than $650,000 and leave more than 1000 jobs in limbo.

“The company’s decision to curtail the Kwinana Alumina Refinery in WA was the result of multiple factors, including its age, scale, operating costs and current bauxite grades, in addition to current market conditions, not Government policy,” Alcoa chief operating officer Matt Reed said in a statement at the time.

The closures began long before Alcoa though. In 2020 BP closed its Kwinana refinery — then the biggest in Australia — claiming it could not compete with “large-scale, export-oriented refineries in Asia and the Middle East”.

This month BHP announced it would be shutting its Nickel West operation, including its Kwinana refinery, which had been operating since the 60s.

The company blamed the closure on a global crash in the price of nickel.

Mr Harrison labelled the decision disappointing but not unexpected.

“BHP’s decision highlights that our local industries are subject to global price fluctuations and that we must continually evolve and adapt to these ever-changing markets,” he said.

“This means ensuring we provide the policies, regulations and infrastructure needed to help local industry grow, prosper and succeed.”

While BHP is offering voluntary redundancies for about half of those affected, Federal Resources Minister Madeleine King said the company had assured her it was making transitionary arrangements.

“I will hold them to that,” she said.

“BHP’s decision to temporarily suspend its WA nickel operations is disappointing, especially for workers and their families.

“BHP has said that all frontline workers who want a job will get a job within BHP.”

Also this month, IGO and Andrew Forrest’s Wyloo shelved plans for a processing plant in Kwinana that would mix nickel, cobalt and manganese to make a cathode material for electric car batteries.

Again, market conditions were blamed for the decision.

Is Australia no longer an attractive option for mining?

When Fortescue announced it would cull about 4.5 per cent of its global workforce this month, Chamber of Minerals and Energy WA boss Rebecca Tomkinson said it was a reflection of the reality of Australia’s high-cost mining environment.

Ms Tomkinson warned that more levers needed to be pulled to help keep costs down for WA miners.

“The reality is that Australia is a relatively high-cost jurisdiction and globally competition is increasing,” she said.

“Competitive policy settings are not a nice-to-have — they are a must. Discipline is required to keep downward pressure on operating and key input costs such as energy to enhance productivity.”

This is the challenge facing politicians ahead of 2025’s double-election year, with the State going to the polls in March and a Federal election due by September.

Premier Roger Cook, who is also the member for Kwinana, was upbeat about the area’s future, saying it’s “bold, exciting and will play a central role in setting up our State for decades”.

“As both the member for Kwinana and the Minister for State and Industry Development, Jobs and Trade, I know as well as anyone how important Kwinana is to the future prosperity of the entire State, which is why I will continue to throw everything at attracting major projects to this area,” he said.

“This includes progressing our plan for Westport — Perth’s new container port facility, to be built in the Kwinana industrial area — which will create thousands of jobs for the community.

“Billions of dollars of investment are being poured into Kwinana as a result of my Government’s success at securing a range of major new projects that will deliver thousands of new long-term jobs.

“Some of the biggest companies in the world are proving they believe in Kwinana, whether it’s investing in battery material production, chemical processing, green hydrogen, renewable biofuels and waste-to-energy facilities.”

He admitted Kwinana had to adapt to the global economy and was disappointed in recent decisions.

The Kwinana Industries Council believes Kwinana’s industry is being stymied by ageing infrastructure, outdated planning and approvals processes, and a lack of Government investment.

KIC highlighted six policy priorities requiring urgent attention from the Government — co-ordinated planning and regulation, decarbonisation, Westport, effective land use, investment in infrastructure, and investment in a skilled workforce.

Clean energy: The future?

According to KIC, decarbonisation is imperative for the sustainability of the heavy industry sector but requires Government support and incentives.

Following the closure of its oil refinery, BP is aiming to open a facility that produces renewable fuels at its Kwinana Energy Hub.

Mr Cook said his Government was ensuring Kwinana locked in a crucial role as the key industrial hub at the centre of WA’s transition to a clean energy future.

“First it was iron ore, then oil and gas, now clean energy will play a generational role in transforming our economy for generations and Kwinana is already front and centre in what will ultimately set up our State for decades to come,” he said.

“Leading WA’s push to grow into a clean energy powerhouse will give Kwinana and its people a new purpose and a new path forward as developing economies around the world cry out for what we can give them — clean energy.”

In April, Ms King toured CSBP’s Kwinana fertiliser plant to announce a $32.9 million funding injection for the installation of tertiary abatement catalysts to slash emissions.

Funding came from the Government’s $1.9 billion Powering the Regions fund which is part of a plan for Australia to become a renewable energy superpower and meet emission reduction targets.

Kwinana mayor Peter Feasey also believes green energy is key to the area’s future.

“We’ve seen strong and unprecedented improvement of the unemployment rate in recent years, even while announcements and changing developments occur within the Kwinana Industrial Area,” he said.

“Much of the transformation within the KIA reflects a global transition to sustainable and renewable energy sources, but industry is also subject to the economic climate of the day and supply and demand structures.

“While it is a tough time for employees who may have lost jobs in recent months, these are well-respected professionals and there is a high demand for skilled workers, also an opportunity for embarking on careers paths in the renewable space.”

Westport hit with delays before even starting

Westport is central to the area’s industrial growth ambitions. The development would move container shipping from Fremantle to Kwinana.

However, documents submitted for Federal environmental review revealed that the multi-billion dollar project is slated to start in 2027.

It could take up to 15 years to build, which gives an operating date of 2042.

RDA Perth chair Keith Ellis told The West that the State could lose investment from delays in building the port.

He said the outer harbour was the number one “opportunity for driving future growth in WA” and urged for the timeline to be brought forward significantly.

“The impact on economic development opportunities to grow the State, especially the Western Trade Coast, will be inhibited by the lack of a new port in the mid-term,” he said.

KIC’s policy documents warned that the current road network supporting the Western Trade Coast was “grossly inadequate” and put the success of Westport at risk.

It is advocating for the expansion of Anketell Road, the duplication of the Kewdale-Kwinana freight rail and improvements to ease congestion on local roads in and out of the industrial area.