Around 200 union members at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on November 10, seeking firmer security over pay and working conditions before Alcoa takes over the company's aluminium assets in a transaction with an implied enterprise value of up to USD 5.6 billion.
The action involves members of the Electrical Trades Union (ETU) and the Australian Manufacturing Workers' Union (AMWU) and coincides with a scheduled shutdown of the refinery's main processing plant. AMWU state secretary Steve McCartney put union membership at the Worsley operation at about 200 and said workers wanted their existing earnings protected before ownership changes hands.
Incentive payments remain the sticking point
Short-term incentive payments, which form a significant part of employees' remuneration, are central to the dispute. McCartney said Worsley workers had received an average bonus of 10 per cent over the past five years and wanted those payments secured through their enterprise agreement. The union argues South32 has referred to incentive payments when discussing overall remuneration but has not given a binding guarantee to protect them. McCartney said the request was not for higher payments but for continuation of benefits employees had consistently received.
Working hours divide the two workforces
ETU WA secretary Adam Woodage said Alcoa's shift and day workers have a 36-hour working week, compared with 42 hours for shift workers at Worsley, while South32 day workers complete 40 hours across four 10-hour days. Woodage said those differences would come under greater scrutiny as the two companies move towards combining their aluminium operations, and that employees wanted an agreement recognising their skills, contributions and role in the business.
South32's position
South32 said it was engaging constructively with employees and their representatives during enterprise agreement negotiations, that Worsley employees receive benefits beyond base wages, and that its existing short-term incentive policy would continue after the transaction is completed. The company said it had plans in place to maintain operations at Worsley Alumina during the industrial action and did not expect the stoppage to affect production.
What the acquisition covers
Announced in July 2026, the transaction covers South32's 86 per cent interest in Worsley Alumina, full ownership of the Hillside aluminium smelter in South Africa, a 33 per cent interest in Brazil's Mineração Rio do Norte bauxite mine, a 36 per cent interest in the Brazil Alumina refinery and a 40 per cent interest in the Brazil Aluminium smelter.
The implied enterprise value comprises USD 3.1 billion in cash, about USD 1 billion in newly issued Alcoa shares, roughly USD 750 million in net debt and lease liabilities assumed by Alcoa, and up to USD 750 million in contingent cash payments linked to agreed alumina and aluminium price targets through 2030. Alcoa will also assume rehabilitation provisions estimated at about USD 1.2 billion, which sit outside that headline figure. South32 intends to distribute roughly half of the Alcoa shares it receives, worth about USD 500 million at the time of announcement, through a fully franked special dividend. The deal excludes Mozal Aluminium in Mozambique and is targeted for completion by June 29, 2027, subject to regulatory and other closing conditions; South32 shareholders approved it on October 15, 2026.
Worsley's place in the enlarged portfolio
The refinery has an annual alumina production capacity of about 4.4 million tonnes. According to Wood Mackenzie, the acquisition would lift Alcoa's attributable bauxite production by 53.6 per cent to nearly 53 million tonnes a year and attributable alumina production by 51.6 per cent, while raising aluminium smelting capacity by around 26 per cent. Alcoa expects about USD 900 million in net present value from operational synergies, including better integration between Worsley and its existing Western Australian operations, with the enlarged portfolio projected to produce some 14.8 million tonnes of alumina and 3.2 million tonnes of aluminium annually once completed.
Against that backdrop, securing experienced staff and keeping Worsley running smoothly will matter as Alcoa prepares to integrate the assets, and the outcome of the enterprise agreement talks could shape employment terms at one of the key facilities in the deal.