Shares of Alumina, Alcoa’s Australian junior bauxite and alumina partner, have fallen from an 18-month high after it flagged $US64 million ($88.4m) worth of writedowns and $US72m of coming cash costs related to Alcoa’s closure of a South American mine and refinery and a writedown of an onshore West Australian gasfield.

The writedowns set Alumina up for about a $US50m full-year net profit when it reports in February, based on previous analyst expectations, down from an $US88m net profit in 2015.

Alumina shares rose 60 per cent in 2016, making it one of the best 10 performers in the ASX 100 index. The shares rose as alumina and aluminium prices performed well and, later in the year, speculation surfaced that Alumina may become a takeover target for BHP Billiton spin-off South32 in the wake of a removal of an AWAC “poison pill” in recent months.

Yesterday, the shares fell 3c, or 1.6 per cent, to $1.82.

Alcoa, which owns 60 per cent of AWAC, yesterday said it would finally shut its Suriname bauxite mines and alumina refinery after the whole operation had spent more than a year in mothballs.

Alumina’s 40 per cent AWAC share will see it face $US43m of after-tax charges around the closure and $US72m of cash costs over the next five years.

On top of this, AWAC will record a $US52m impairment of its 65 per cent stake in the onshore Warro gasfield north of Perth.

It had been promoted by operator Transerv Energy as the nation’s biggest undeveloped gas field, but hydraulic fracturing in 2016 has not yielded the flow rates required for commercial development and more water than expected has come from the gas.

Alumina’s share of the Warro impairment will be $US21m.

Alcoa has a market value of $US8bn after it split in two last year, housing its aerospace and automotive operations in a new company called Arconic and giving Alumina a chance to remove a previous poison pill that reduced Alumina’s takeover appeal.

Alcoa said the Victorian power failure, which restricted the Portland aluminium smelter to less than 30 per cent capacity since December at a cost of $1m in lost revenue daily, would have no significant negative affect on the US company’s quarterly results.

An Alcoa spokesman said talks were continuing over a new power contract that would be vital.

In a note just before Christmas, Credit Suisse analyst Paul McTaggart downgraded Alumina to underperform because of the recent strong share price performance and forecast net earnings of $US117m, indicating a statutory profit, after yesterday’s writedowns of $US54m.

This was despite raising his target price by 10c a share to $1.65.

Mr McTaggart said he was sceptical of South32 takeover talk because Alumina was already highly priced, high alumina prices looked unsustainable and there would be competition concerns.