About 200 union members at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on November 10, pressing for binding protection of their pay and working conditions before Alcoa completes its planned acquisition of the company's aluminium assets. The action by members of the Electrical Trades Union (ETU) and the Australian Manufacturing Workers' Union (AMWU) coincides with a scheduled shutdown of the refinery's main processing plant.
Incentive payments are the main sticking point
Steve McCartney, the AMWU's state secretary, said Worsley workers have received an average bonus of 10 per cent over the past five years and want those short-term incentive payments secured through their enterprise agreement. The union argues that South32 has referred to incentive payments when describing employees' overall remuneration but has not offered a binding guarantee that the earnings will be preserved. McCartney said the request was not for higher payments but for continuation of benefits workers have consistently received.
Shift hours differ between the two workforces
Adam Woodage, WA secretary of the ETU, said Alcoa's shift and day workers have a 36-hour working week, compared with 42 hours for shift workers at Worsley, while South32's day workers complete 40 hours across four 10-hour days. He said those differences would come under greater scrutiny as the two companies move towards combining their aluminium operations, adding that employees want an agreement that recognises their skills, contributions and role in the business.
South32 says negotiations are constructive
South32 said it is engaging constructively with employees and their representatives during enterprise agreement negotiations. The company maintained that 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 Alumina during the industrial action and that it does not expect the stoppage to affect production.
What the Alcoa transaction covers
Announced in July 2026, the deal carries an implied enterprise value of up to USD 5.6 billion and 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
The consideration comprises USD 3.1 billion in cash, approximately 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, which sit outside the enterprise value. South32 intends to distribute roughly half of the Alcoa shares it receives, worth around USD 500 million at the time of announcement, to eligible shareholders as a fully franked special dividend after completion. Mozal Aluminium in Mozambique is excluded from the transaction and remains with South32 on care and maintenance.
Why Worsley matters to 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 aluminium smelting capacity would rise by around 26 per cent. Alcoa expects the deal to generate about USD 900 million in net present value through operational synergies, including improved integration between Worsley and its existing Western Australian operations. Once completed, the expanded portfolio is expected to produce approximately 14.8 million tonnes of alumina and 3.2 million tonnes of aluminium annually.
Completion is targeted for June 29, 2027, subject to regulatory and other closing conditions, and South32 shareholders approved the transaction on October 15, 2026. How the enterprise agreement talks at Worsley are settled will shape employment terms at one of the larger facilities changing hands.