Australia's safeguard mechanism is failing to reduce emissions because major polluters are relying on unlimited carbon offsets, according to The Australia Institute.
An alumina refinery and bauxite mine in WA is the cornerstone of Alcoa's $US4.1 billion purchase of South32's global bauxite, alumina and aluminium business announced on Wednesday.
Alcoa chief executive Bill Oplinger told analysts in the US that synergies from the deal, expected to conclude in early 2027, would save the company $US50 million in its first year, and total savings have a present value of $US900 million.
In addition to the Worsley refinery and the Boddington mine in WA, Alcoa is acquiring South32's wholly-owned Hillside aluminium smelter in South Africa, as well as its interest in the MRN bauxite mine and the Alumar refinery and smelter in Brazil.
Oplinger, speaking on Wednesday morning Perth time, said the biggest opportunities for synergies are in WA.
"We're not looking at massive rationalisation of jobs; what we're looking at is applying our expertise to running Worsley in a way that we can creep capacity and make it more efficient," he said.
South32's business in WA generated revenue of $US1.7 billion in 2025, resulting in earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $US600 million.
The $2.4 million-a-day earnings flow comes from mining forests and farmland for bauxite on the eastern edge of the Darling Scarp and moving the ore south on a 51 km-long conveyor system to be refined into alumina at Worsley for export through Bunbury.
Much of the area mined by South32 is closer to Alcoa's Pinjarra refinery than it is to Worsley.
Oplinger said the Pinjarra and Worsley refineries were designed to process specific types of bauxite, limiting what ore each company could extract from its lease.
"Our mining lease has Greenstone bauxite in it. Their mining lease has granitic bauxite in it," he said.
"There are tremendous opportunities to be able to blend the bauxite grades to achieve a very favourable outcome."
Alcoa chief financial officer Molly Beerman said Alcoa now expected to be able to optimise a mine move planned for early next decade that was to cost hundreds of millions of dollars.
"On the long term mine plans we are looking at a 40-year life of mine plan," she said.
"I think that the majority of our stakeholders really understand the rationale for this deal and are excited about the opportunity to make a stronger Western Australian alumina bauxite and alumina business."
South32's accounts recorded a $US1.2 billion liability for the future cost of retiring the assets Alcoa has bought, including decommissioning the Worsley refinery and rehabilitating that site and the strip-mined jarrah forest.
However, Oplinger said Alcoa will only allow a third of that amount, as it uses US GAAP, which, unlike the IFRS standard used by South32, does not require a future cost to be recognised until the asset's closure date is known.
Olpnger sold the deal to analysts as cheap access to capacity.
"We're acquiring smelting capacity at about $US1850 per tonne (per annum), we're acquiring refining capacity at $US600 per tonne ... both of those numbers are below what the Chinese build in Indonesia today."
He added that in the West, new smelting capacity would cost up to $ 8,000 per tonne and refining up to $ 2,000 per tonne.
Alcoa is buying South32's 86 per cent share of its WA business. The remainder is held by Japanese firms Sojitz (4%) and a joint venture between Sumitomo and Malaysian company Press Metal Bintulu (10%).
I worked in oil & gas in commercial and engineering roles for 20 years. Since 2016, I have written for The West Australian, WAtoday, The Guardian and Boiling Cold, winning five WA Media Awards.
"The government is allowing Alcoa to do whatever they friggin want," according to a long-term campaigner for better regulation of WA's alumina refineries.
