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 and the Australian Manufacturing Workers' Union, 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 their existing earnings protected before the proposed change in ownership, rather than an increase in pay.
Bonus guarantee becomes central issue
Short-term incentive payments are a major concern because they form a significant part of remuneration. McCartney said Worsley employees have received an average bonus of 10 per cent over the past five years and want the payments secured through their enterprise agreement.
The union says South32 has cited incentive payments when discussing overall remuneration but has not provided a binding guarantee to preserve them. McCartney said the request is for continuation of benefits employees have consistently received.
Working hours and employment conditions have also emerged as points of contention. 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 said those differences would face closer scrutiny as the companies move toward combining their aluminium operations. Employees want an agreement that recognises their skills, contributions and role in the business, he said.
South32 says operations protected
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.
South32 also said it has plans to maintain operations at Worsley Alumina during the industrial action and does not expect the stoppage to affect production.
Alcoa deal covers global aluminium assets
The dispute comes as Alcoa prepares to acquire 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, about 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 estimated at about 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 the time of 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.
Completion is targeted for June 29, 2027, subject to regulatory and other closing conditions. South32 shareholders approved the transaction on October 15, 2026.
Worsley's role in expanded portfolio
Worsley has annual alumina production capacity of about 4.4 million tonnes. Wood Mackenzie estimates the acquisition will raise 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 increasing aluminium smelting capacity by around 26 per cent.
Alcoa expects the deal to generate about USD 900 million in net present value through operational synergies, including better integration between Worsley and its existing Western Australian operations. The expanded portfolio is expected to produce about 14.8 million tonnes of alumina and 3.2 million tonnes of aluminium annually after completion.
Securing experienced employees and maintaining stable operations at Worsley will remain important as Alcoa prepares to integrate the assets. The outcome of the enterprise agreement negotiations could therefore shape employment conditions at a key facility in the proposed acquisition.