Alcoa Corporation reported a net income of $232 million for Q3 2025, driven by strategic asset sales and operational milestones including the permanent closure of its Kwinana alumina refinery and the sale of its Saudi Arabia joint venture stake.
- Q3 net income of $232 million, nine-month net income $944 million
- Permanent closure of Kwinana alumina refinery with $856 million restructuring charge
- Sale of 25.1% Saudi Arabia joint venture interest for $1.35 billion
- Formation of San Ciprián joint venture in Spain and smelter restart progress
- Amendment to revolving credit facility with sustainability-linked pricing adjustments
Financial Performance and Strategic Moves
Alcoa Corporation has delivered a robust financial performance in the third quarter of 2025, reporting a net income attributable to the company of $232 million, a significant improvement from the previous quarter. For the nine months ended September 30, 2025, net income surged to $944 million, reflecting gains from key strategic transactions and operational efficiencies.
Central to this quarter’s results was the permanent closure of the Kwinana alumina refinery in Australia, a facility that had been fully curtailed since June 2024. The closure resulted in a substantial restructuring charge of $856 million, including asset impairments and environmental remediation reserves. The decision was influenced by factors such as the refinery’s age, scale, operating costs, and challenging bauxite grades. Demolition and remediation activities are expected to span the next six years, with cash outlays estimated at approximately $600 million.
Asset Sales and Joint Ventures
In a major portfolio optimization move, Alcoa completed the sale of its 25.1% ownership interest in the Saudi Arabia joint venture, comprising the Ma’aden Bauxite and Alumina Company and the Ma’aden Aluminium Company, to Saudi Arabian Mining Company (Ma’aden) for $1.35 billion. The consideration included shares valued at $1.2 billion and $150 million in cash. This transaction generated a gain of $786 million, significantly boosting the company’s earnings.
Additionally, Alcoa formed a joint venture with IGNIS Equity Holdings, SL for the San Ciprián operations in Spain, where Alcoa holds a 75% stake and IGNIS EQT 25%. The joint venture is progressing with the restart of the San Ciprián smelter, which was operating at 29% capacity as of September 30, 2025, with full restart expected by mid-2026.
Operational Highlights and Market Environment
Operationally, both the Alumina and Aluminum segments increased production during the quarter. Several smelters, including Baie-Comeau, Deschambault, Mosjøen, Portland, and Warrick, set year-to-date production records. The company also navigated the impact of increased U.S. Section 232 tariffs on aluminum imports from Canada, with the Midwest premium offsetting tariff costs on U.S. aluminum production.
Alcoa’s financial health is supported by a recent amendment to its revolving credit facility, increasing flexibility and incorporating sustainability-linked pricing adjustments based on greenhouse gas emissions intensity and renewable energy usage. The company remains compliant with all financial covenants and regulatory requirements.
Outlook and Considerations
Looking ahead, Alcoa expects 2025 production and shipment volumes for both Alumina and Aluminum segments to remain consistent with prior guidance. The company is actively managing environmental remediation obligations and engaging with regulatory authorities on mining approvals in Australia. Negotiations on collective bargaining agreements in key locations are ongoing, reflecting the company’s focus on operational stability and workforce relations.
Alcoa’s strategic divestitures and joint ventures, combined with operational improvements and financial discipline, position the company to navigate market uncertainties while advancing its sustainability commitments.
Bottom Line?
Alcoa’s decisive portfolio moves and operational gains set the stage for navigating evolving market and regulatory landscapes.
Questions in the middle?
- How will the permanent closure of Kwinana impact Alcoa’s long-term alumina supply and costs?
- What are the implications of the Saudi Arabia joint venture sale on Alcoa’s global footprint and earnings stability?
- How will sustainability-linked pricing adjustments influence Alcoa’s future borrowing costs and investor appeal?