About 200 union members at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on Nov. 10, seeking greater security over pay and working conditions before Alcoa's planned acquisition of South32's aluminium assets for up to USD 5.6 billion. 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.
AMWU state secretary Steve McCartney said about 200 union members work at the Worsley operation. Workers want existing earnings protected before the proposed ownership change, he said. A central issue is the future of short-term incentive payments, which form a significant part of remuneration. McCartney said Worsley workers had received an average bonus of 10 percent over the past five years and wanted the payments secured through their enterprise agreement.
The union has argued that South32 has referred to incentive payments when discussing overall remuneration but has not provided a binding guarantee to protect those earnings. McCartney said the request was not for higher payments but for continuation of benefits workers had consistently received.
Working hours 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 face greater scrutiny as the companies move toward combining their aluminium operations. Employees want an agreement that recognizes their skills, contributions and role in the business, he said.
South32 said it was 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 had plans to maintain operations during the industrial action and did not expect the stoppage to affect production.
The dispute comes as Alcoa prepares to take over a substantial part of South32's aluminium value chain. The transaction, announced in July 2026, has an implied enterprise value of up to USD 5.6 billion and 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 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 to be 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 approximately 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 deal excludes Mozal Aluminium in Mozambique, which remains under South32 ownership and on care and maintenance.
South32 shareholders approved the transaction on Oct. 15, 2026. Completion is targeted for June 29, 2027, subject to regulatory and other closing conditions. Worsley has annual alumina production capacity of approximately 4.4 million tonnes. According to Wood Mackenzie, 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 the deal to generate approximately 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 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 shape employment conditions at one of the key facilities in the proposed acquisition.