About 200 union members at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on November 10. 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.
Workers are seeking greater security over remuneration and working conditions before Alcoa's planned acquisition of South32's aluminium assets, a transaction with an implied enterprise value of up to USD 5.6 billion. AMWU state secretary Steve McCartney said the workforce wants existing earnings protected through the ownership change.
Bonus guarantee is central dispute
Short-term incentive payments are a key issue. 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 contends that South32 has cited incentive payments when discussing overall remuneration but has not given a binding guarantee to preserve them. McCartney said the request is not for higher payments but for continuation of benefits workers have consistently received.
Working hours and employment conditions 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 that employees want an agreement recognising 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. It also said it has plans to maintain operations during the industrial action and does not expect the stoppage to affect production.
Scope of Alcoa's proposed acquisition
Alcoa's transaction, announced in July 2026, 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 of up to USD 5.6 billion 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 implied 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 deal on October 15, 2026.
Worsley's strategic role
Worsley has annual alumina production capacity of about 4.4 million tonnes. Wood Mackenzie estimates the acquisition would raise 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. The consultancy also estimates aluminium smelting capacity would increase by about 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. Once completed, the enlarged portfolio is expected to produce about 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. The outcome of the enterprise agreement negotiations could shape employment conditions at one of the key facilities in the proposed transaction.