About 200 union members 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 the Electrical Trades Union and the Australian Manufacturing Workers' Union and coincides with a scheduled shutdown at the refinery's main processing plant.
AMWU state secretary Steve McCartney said workers want their existing earnings protected before the proposed ownership change. The unions are pressing South32 to secure short-term incentive payments in the enterprise agreement. McCartney said Worsley employees have received an average bonus of 10 percent over the past five years and are seeking continuation of those payments, not an increase.
Incentives and hours in focus
The union has argued that South32 refers to incentive payments when discussing overall remuneration but has not provided a binding guarantee to protect them. McCartney said the request is for the benefits workers have consistently received to be carried forward through the agreement.
Working hours have also emerged as 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 said those differences would face greater scrutiny as the companies move toward combining their aluminium operations, and employees want an agreement that recognizes their skills, contributions and role in the business.
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 during the industrial action and does not expect the stoppage to affect production.
Alcoa's proposed acquisition
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 percent interest in Worsley Alumina, full ownership of the Hillside Aluminium smelter in South Africa, a 33 percent interest in Brazil's Mineração Rio do Norte bauxite mine, a 36 percent interest in the Brazil Alumina refinery and a 40 percent interest in the Brazil Aluminium smelter.
The implied enterprise value includes 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 linked 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 the 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 deal on October 15, 2026.
Worsley has annual alumina production capacity of about 4.4 million tonnes. Wood Mackenzie estimates the acquisition would increase Alcoa's attributable bauxite production by 53.6 percent to nearly 53 million tonnes annually and attributable alumina production by 51.6 percent, while raising aluminium smelting capacity by around 26 percent. Alcoa expects about USD 900 million in net present value from 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 once the transaction is completed.
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 one of the key facilities in the proposed acquisition.