Roughly 200 union members at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on November 10, pressing for firmer guarantees on pay and conditions before Alcoa's proposed purchase of the company's aluminium assets goes through.
The action, involving the Electrical Trades Union (ETU) and the Australian Manufacturing Workers' Union (AMWU), coincides with a scheduled shutdown of the refinery's main processing plant. AMWU state secretary Steve McCartney put union membership at the site at about 200 and said employees want their current earnings protected before ownership changes hands.
Incentive payments at the centre of the dispute
Short-term incentive payments are the main sticking point. McCartney said Worsley workers have averaged a bonus of 10 per cent over the past five years and want that payment written into their enterprise agreement. The union argues that South32 has counted incentive payments when describing overall remuneration but has not offered a binding commitment to preserve them. According to McCartney, the claim is not for higher pay but for continuation of benefits employees have consistently received.
Working-time differences between the two workforces have also surfaced. ETU WA secretary Adam Woodage said Alcoa's shift and day workers operate a 36-hour week, against 42 hours for Worsley shift workers, while South32 day workers complete 40 hours over four 10-hour days. Woodage said those gaps would attract closer scrutiny as the two companies' aluminium operations are combined, 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 staff receive benefits beyond base wages and that its existing short-term incentive policy will continue after the transaction closes. It added that plans are in place to keep the refinery running during the stoppage and that it does not expect production to be affected.
What the Alcoa transaction covers
The deal, announced in July 2026, carries an implied enterprise value of up to USD 5.6 billion and takes in South32's 86 per cent interest in Worsley Alumina, full ownership of the Hillside aluminium smelter in South Africa, 33 per cent of Brazil's Mineração Rio do Norte bauxite mine, 36 per cent of the Brazil Alumina refinery and 40 per cent of the Brazil Aluminium smelter.
Consideration comprises USD 3.1 billion in cash, about USD 1 billion in newly issued Alcoa shares, roughly USD 750 million of 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 take on rehabilitation provisions estimated at about USD 1.2 billion, which sit outside the implied enterprise value. South32 intends to pass roughly half of the Alcoa shares it receives, worth about USD 500 million at the time of announcement, to eligible shareholders through a fully franked special dividend. Mozal Aluminium in Mozambique is excluded and remains with South32 on care and maintenance.
Completion is targeted for June 29, 2027, subject to required regulatory and other closing conditions; South32 shareholders approved the transaction on October 15, 2026.
Scale of the combined business
Worsley has an annual alumina production capacity of about 4.4 million tonnes. Wood Mackenzie estimates the acquisition would lift Alcoa's attributable bauxite output 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 about 26 per cent. Alcoa expects roughly USD 900 million of net present value from operational synergies, including tighter integration between Worsley and its existing Western Australian operations. The enlarged portfolio is expected to produce around 14.8 million tonnes of alumina and 3.2 million tonnes of aluminium annually once the transaction is completed.
Against that backdrop, retaining experienced staff and keeping Worsley stable will matter as Alcoa integrates the acquired assets, and the outcome of the enterprise agreement talks could shape employment terms at one of the transaction's central facilities.