Workers at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on November 10, seeking firmer guarantees on pay and conditions before Alcoa's proposed acquisition of the operation and other South32 aluminium assets is completed. The action involves members of the Electrical Trades Union (ETU) and the Australian Manufacturing Workers' Union (AMWU), and it began on the same day as a scheduled shutdown of the refinery's main processing plant.
Around 200 union members work at Worsley, according to AMWU state secretary Steve McCartney, who said the workforce wants existing earnings protected ahead of the ownership change.
Short-term incentives at the centre
The future of short-term incentive payments is the main sticking point. McCartney said Worsley employees have received an average bonus of 10 per cent over the past five years and want the payments written into their enterprise agreement. The union argues that South32 has cited incentive payments when discussing overall remuneration but has not given a binding guarantee that those earnings will be preserved. McCartney said the claim is not for higher payments, but for the continuation of benefits workers have consistently received.
Working hours differ from Alcoa's
Employment conditions for comparable roles also diverge between the two companies. ETU WA secretary Adam Woodage said Alcoa's shift and day workers have a 36-hour week, compared with 42 hours for shift workers at Worsley, while South32's day workers complete 40 hours across four 10-hour days. Woodage said those gaps would come under greater scrutiny as the companies move to combine their aluminium operations, and that employees want an agreement recognising their skills, contributions and role in the business.
Company position
South32 said it is engaging constructively with employees and their representatives during enterprise agreement negotiations. The company said 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 plans are in place to maintain operations at Worsley during the industrial action and that it does not expect the stoppage to affect production.
What the transaction covers
The dispute is unfolding against 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 in Western Australia;
- 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;
- a 40 per cent interest in the Brazil Aluminium smelter.
Mozal Aluminium in Mozambique is excluded and remains under South32's ownership on care and maintenance.
How the consideration is structured
The implied enterprise value comprises about USD 3.1 billion in cash, roughly USD 1 billion in newly issued Alcoa shares, around USD 750 million in net debt and lease liabilities assumed by Alcoa, and up to USD 750 million in contingent cash payments tied to agreed alumina and aluminium price targets through 2030. Alcoa will also assume rehabilitation provisions linked to the acquired assets, estimated at about USD 1.2 billion, which sit outside the headline value.
South32 intends to distribute approximately half of the Alcoa shares it receives, worth around USD 500 million at the time of the announcement, to eligible shareholders through a fully franked special dividend after completion. Shareholders approved the transaction on October 15, 2026, and completion is targeted for June 29, 2027, subject to regulatory and other closing conditions.
Worsley's place in the enlarged portfolio
Worsley 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 aluminium smelting capacity would rise 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, and the enlarged portfolio is expected to produce roughly 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 matter as Alcoa prepares to integrate the acquired assets, and the outcome of the enterprise agreement negotiations could shape employment conditions at one of the key facilities in the proposed transaction.