Workers 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 proposed acquisition of South32's aluminium assets. The industrial 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.
Around 200 union members are employed at the Worsley operation, according to AMWU state secretary Steve McCartney, who said workers want existing earnings protected before the proposed ownership change. The dispute centres on short-term incentive payments that have formed a significant part of remuneration. Worsley workers received an average bonus of 10% over the past five years and want the payments secured through their enterprise agreement.
Bonus guarantee becomes focal point
The union says South32 has referred to incentive payments when discussing employees' overall remuneration but has not provided a binding guarantee to protect those earnings. 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 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 said those differences would come under greater scrutiny as the companies move towards combining their aluminium operations, and that employees want an agreement recognising their skills, contributions and role in the business.
South32 says talks are constructive
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 at Worsley Alumina during the industrial action and does not expect the stoppage to affect production.
Deal covers Worsley and other assets
The dispute comes as Alcoa prepares to take over a substantial part of South32's aluminium value chain in a transaction with an implied enterprise value of up to USD 5.6 billion. Announced in July 2026, the deal covers South32's 86% interest in Worsley Alumina, full ownership of the Hillside Aluminium smelter in South Africa, a 33% interest in Brazil's Mineração Rio do Norte bauxite mine, a 36% interest in the Brazil Alumina refinery and a 40% interest in the Brazil Aluminium smelter.
The implied enterprise value 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 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 about USD 1.2 billion, separate from the implied enterprise value. South32 intends to distribute approximately half of the Alcoa shares it receives, worth around USD 500 million at the time of the announcement, through a fully franked special dividend after completion.
The transaction excludes Mozal Aluminium in Mozambique, which remains under South32's 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 Oct. 15, 2026.
Worsley sits at centre of expanded portfolio
Worsley has annual alumina production capacity of approximately 4.4 million tonnes. Wood Mackenzie estimates the acquisition will increase Alcoa's attributable bauxite production by 53.6% to nearly 53 million tonnes a year and attributable alumina production by 51.6%, while raising aluminium smelting capacity by around 26%. Alcoa expects the acquisition to generate about 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 approximately 14.8 million tonnes of alumina and 3.2 million tonnes of aluminium annually once the transaction is completed.
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 therefore shape employment conditions at one of the key facilities in the proposed acquisition.