Workers at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on November 10, seeking stronger guarantees on pay and working conditions before Alcoa's planned acquisition of South32's aluminium assets. The action involves members of the Electrical Trades Union (ETU) and the Australian Manufacturing Workers' Union (AMWU), and coincides with a scheduled shutdown at the refinery's main processing plant.
Around 200 union members work at Worsley, according to AMWU state secretary Steve McCartney. He said employees want existing earnings protected before the proposed ownership change. A central issue is the future of short-term incentive payments, which have formed a significant part of remuneration. McCartney said Worsley workers had received an average bonus of 10 per cent over the past five years and want the payments secured through their enterprise agreement. The union argues that South32 has referred to incentive payments when discussing overall remuneration but has not provided a binding guarantee. McCartney said the request was not for higher payments but for continuation of benefits workers had consistently received.
Working hours add to the dispute
Differences in hours and employment conditions between South32 and Alcoa employees in comparable roles have also become contentious. 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. South32's day workers complete 40 hours across four 10-hour days. Woodage argued those differences would face greater scrutiny as the companies move towards combining their aluminium operations, and that employees wanted an agreement recognising their skills, contributions and role in the business.
South32 said it was engaging constructively with employees and their representatives during enterprise agreement negotiations. The company maintained that Worsley employees receive benefits beyond base wages and that its existing short-term incentive policy would continue after the transaction is completed. It also said it had plans to maintain operations during the industrial action and did not expect the stoppage to affect production.
Acquisition covers alumina and aluminium assets
The dispute comes as Alcoa prepares to take over a substantial part of South32's aluminium value chain in a transaction with an implied enterprise value of up to USD 5.6 billion. Announced in July 2026, the deal 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, approximately USD 1 billion in newly issued Alcoa shares, around USD 750 million in net debt and lease liabilities to be 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 approximately USD 1.2 billion, separate from the enterprise value. South32 intends to distribute about half of the Alcoa shares it receives, worth around USD 500 million at announcement, to eligible shareholders through a fully franked special dividend after completion. The transaction excludes Mozal Aluminium in Mozambique, which remains under South32 ownership and on care and maintenance.
South32 shareholders approved the deal on October 15, 2026, and completion is targeted for June 29, 2027, subject to regulatory and other closing conditions. Worsley has annual alumina production capacity of approximately 4.4 million tonnes. According to Wood Mackenzie, the acquisition would increase Alcoa's attributable bauxite production by 53.6 per cent to nearly 53 million tonnes annually 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.
Once completed, the expanded portfolio is expected to produce approximately 14.8 million tonnes of alumina and 3.2 million tonnes of aluminium annually. Against that backdrop, securing experienced employees and maintaining stable operations at Worsley will remain important as Alcoa prepares to integrate the acquired assets.