About 200 union members at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on 10 November, pressing for stronger guarantees on pay and conditions before Alcoa's proposed acquisition of South32's aluminium assets.
The action involves the Electrical Trades Union and the Australian Manufacturing Workers' Union. It coincides with a scheduled shutdown at the refinery's main processing plant. Steve McCartney, AMWU state secretary, said workers want existing earnings protected before ownership changes.
Incentive payments and hours
Short-term incentive payments are central to the dispute. McCartney said Worsley workers have received an average bonus of 10 per cent over the past five years and want the payments secured through their enterprise agreement. The union says South32 has referred to incentive pay when discussing overall remuneration but has not given a binding guarantee. McCartney said the request is not for higher payments, but for continuation of benefits workers have consistently received.
Working hours also differ between the two workforces. Adam Woodage, ETU WA secretary, said Alcoa's shift and day workers have a 36-hour week, while Worsley shift workers work 42 hours. South32 day workers complete 40 hours across four 10-hour days. Woodage said those differences would face greater scrutiny as the companies move towards combining their aluminium operations, and that employees want an agreement recognising their skills and contribution.
Takeover package
Alcoa's proposed transaction, announced in July 2026, has an implied enterprise value of up to US$5.6 billion. It covers South32's 86 per cent interest in Worsley, 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 value comprises US$3.1 billion in cash, about US$1 billion in new Alcoa shares, around US$750 million in net debt and lease liabilities assumed by Alcoa, and up to US$750 million in contingent cash payments tied to alumina and aluminium price targets through 2030. Alcoa would also assume rehabilitation provisions estimated at about US$1.2 billion, separate from the enterprise value. South32 shareholders approved the transaction on 15 October 2026, with completion targeted for 29 June 2027, subject to regulatory and other closing conditions. South32 plans to distribute about half the Alcoa shares it receives, worth around US$500 million at the time of announcement, through a fully franked special dividend after completion. Mozal Aluminium in Mozambique is excluded and remains under South32's ownership on care and maintenance.
Strategic role
Worsley has an annual alumina production capacity of about 4.4 million tonnes. Wood Mackenzie estimates the deal would raise Alcoa's attributable bauxite production by 53.6 per cent to nearly 53 million tonnes a year and attributable alumina output by 51.6 per cent, while increasing aluminium smelting capacity by around 26 per cent. Alcoa expects about US$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 after completion.
South32 said it is engaging constructively with employees and their representatives during enterprise agreement negotiations. It said 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 has plans to maintain operations during the industrial action and does not expect the stoppage to affect production.
The dispute highlights how ownership transitions can bring existing pay structures and site practices into negotiation. For Alcoa, securing experienced workers and stable operations at Worsley will matter as it seeks to integrate the assets, and the enterprise agreement outcome could influence conditions at a facility central to the proposed acquisition.