Unionised workers at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on 10 November, seeking firmer protection for pay and conditions before Alcoa completes its planned purchase of South32's aluminium assets.
The action involves members of the Electrical Trades Union (ETU) and the Australian Manufacturing Workers' Union (AMWU) and coincides with a scheduled shutdown of the refinery's main processing plant. AMWU state secretary Steve McCartney said about 200 union members work at the Worsley operation and that they want existing earnings protected ahead of the ownership change.
Incentive payments at the centre of the dispute
Short-term incentive payments have become the main sticking point. McCartney said Worsley employees have received an average bonus of 10 per cent over the past five years and want that payment secured within their enterprise agreement. The union argues that South32 has referred to incentive payments when describing overall remuneration but has not offered a binding guarantee to preserve them. McCartney said the request is not for higher payments but for continuation of benefits workers have consistently received.
Working hours gap with Alcoa
Differences in hours and conditions between South32 and Alcoa employees doing comparable roles have also become contentious. ETU WA secretary Adam Woodage said Alcoa's shift and day workers operate a 36-hour week, compared with 42 hours for shift workers at Worsley, while South32's day workers complete 40 hours across four 10-hour days. Woodage argued those differences will face closer scrutiny as the two companies move towards combining their aluminium operations, 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 maintained that Worsley employees receive benefits beyond base wages, that its existing short-term incentive policy will continue after the transaction is completed, and that plans are in place to keep the refinery operating during the industrial action. It said it does not expect the stoppage to affect production.
What the acquisition covers
The dispute is unfolding against a transaction announced in July 2026 with an implied enterprise value of up to USD 5.6 billion. It 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 and a 40 per cent 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 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 assume rehabilitation provisions estimated at about USD 1.2 billion, which sit outside that enterprise value. South32 intends to distribute roughly half of the Alcoa shares it receives, worth about USD 500 million at announcement, to eligible shareholders through a fully franked special dividend after completion. Mozal Aluminium in Mozambique is excluded and remains with South32 under care and maintenance. Completion is targeted for 29 June 2027, subject to regulatory and other closing conditions; South32 shareholders approved the transaction on 15 October 2026.
Worsley's role in the enlarged portfolio
Worsley has annual alumina capacity of approximately 4.4 million tonnes and is central to the expansion Alcoa plans across the bauxite, alumina and aluminium chain. According to Wood Mackenzie, the deal 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 adding around 26 per cent to smelting capacity. Alcoa expects about USD 900 million in net present value from operational synergies, including better integration between Worsley and its existing Western Australian operations, and forecasts combined output of roughly 14.8 million tonnes of alumina and 3.2 million tonnes of aluminium annually once completed.
With experienced staff and stable operations important to that integration, the outcome of the enterprise agreement talks could shape employment conditions at one of the key assets in the proposed acquisition.