Union members at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on November 10, seeking firmer protection of their pay and conditions before Alcoa's planned purchase of the company's aluminium assets, 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). AMWU state secretary Steve McCartney said about 200 union members are employed at the Worsley operation. The stoppage coincides with a scheduled shutdown at the refinery's main processing plant.
Bonus guarantees remain unresolved
The central issue is the future of short-term incentive payments, which form a significant part of employees' remuneration. McCartney said Worsley workers have received an average bonus of 10 per cent over the past five years and want those payments secured in their enterprise agreement.
The union argues that South32 has pointed to incentive payments when discussing overall remuneration but has not given a binding guarantee that the earnings will be protected. McCartney said the request was not for higher payments but for continuation of benefits workers have consistently received.
Working hours differ from Alcoa's
Differences in hours and employment conditions between South32 and Alcoa employees performing comparable roles have also become a point 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 argued that those differences would come under greater scrutiny as the two companies move towards combining their aluminium operations, and said employees wanted an agreement that recognised their skills, contributions and role in the business.
South32 says talks are constructive
South32 said it was engaging constructively with employees and their representatives during enterprise agreement negotiations. It maintained 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 also 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 Alcoa transaction covers
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 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 to be assumed by Alcoa;
- 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 associated with the acquired assets, estimated at about USD 1.2 billion, which sit outside the implied enterprise 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. Mozal Aluminium in Mozambique is excluded and remains under South32's ownership on care and maintenance.
Completion is targeted for June 29, 2027, subject to required regulatory and other closing conditions. South32 shareholders approved the transaction on October 15, 2026.
Worsley's place in the enlarged portfolio
Worsley has an annual alumina production capacity of approximately 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 increasing aluminium smelting capacity by around 26 per cent.
Alcoa expects the deal to generate roughly USD 900 million in net present value through operational synergies, including improved integration between Worsley and its existing Western Australian operations. The expanded portfolio is expected to produce approximately 14.8 million tonnes of alumina and 3.2 million tonnes of aluminium annually once the transaction is completed.
The outcome of the enterprise agreement negotiations could therefore shape employment conditions at one of the key facilities included in the proposed acquisition.