The US-listed company started shedding its workforce at the 60-year-old Kwinana Alumina Refinery in WA in January 2024.
It announced overnight on Monday that the facility south of Perth would close for good after production ceased about a year earlier.
Multiple factors led to Alcoa's decision including the facility's age, size and operating cost, as well as broader market conditions.
"Alcoa operated the Kwinana refinery for a number of years in a challenging environment and made the difficult decision to permanently close the facility after unsuccessfully exploring multiple options for a sustainable path to restarting," chief operations officer Matt Reed said.
The closure is expected to cost Alcoa about $US890 million ($A1.4 billion) in 2025 with a further $US600 million ($A912 million) hit over the following six years.
Production was phased out at the facility during the second quarter of 2024, with the loss of about 1000 jobs.
The refinery's remaining 220 employees will be let go during 2026 as the closure progresses.
WA government frontbencher Sabine Winton said the closure was "bitterly disappointing" for the state.
"It's particularly tough for those workers and those families who will be impacted by that decision," she said.
"I would urge Alcoa to continue to work with those workers to ensure that they're supported through this tough, tough process."
Ensuring the refinery site was remediated and redeveloped was "front and central" for the government, Ms Winton added.
The WA government is helping impacted workers find other jobs via a local TAFE.
The closure announcement comes amid uncertain futures for several major refineries and smelters, including the Rio Tinto-run Tomago alumina refinery in NSW and Glencore operations in Queensland's Mt Isa and Townsville.
The WA Nationals said the refinery had been a cornerstone of Kwinana's industrial strip for decades and its closure would be an economic hit that could impact 5000 flow-on jobs.
"WA's resources sector is under siege from red and green tape, heavy-handed industrial relations changes and a Labor-driven push for unionisation that is driving up costs and eroding investor confidence," party leader Shane Love said.
The Kwinana Industries Council said it was the end of an important chapter in WA's economic and industrial development.
"It's a sad day for Alcoa's Kwinana-based workers, local industry and the Kwinana community," chief executive David Harrison said.
Industry is under immense and growing pressure, including greater competition from overseas operators, ageing and inadequate infrastructure and clunky approvals processes, he said.
"If we want to see new investment in places like Kwinana, then we cannot afford a business-as-usual approach."
Alcoa said it would work with stakeholders and the WA government to clean up and redevelop the site.
