Workers at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on November 10, seeking stronger guarantees on pay and conditions before Alcoa's planned acquisition of South32's aluminium assets. The action involves members of the Electrical Trades Union and the Australian Manufacturing Workers' Union, and it coincides with a scheduled shutdown at the refinery's main processing plant.
Around 200 union members work at Worsley, according to AMWU state secretary Steve McCartney. He said employees want existing earnings protected before the proposed ownership change. The central dispute concerns short-term incentive payments, which have formed a significant part of remuneration. McCartney said Worsley workers received an average bonus of 10 percent over the past five years and want the payments secured in their enterprise agreement.
The union argues South32 has referred to incentive payments when discussing overall remuneration but has not given a binding guarantee to protect those earnings. McCartney said the request is not for higher payments but for the continuation of benefits workers have consistently received.
Working-hour differences sharpen the dispute
Differences in hours and employment conditions between South32 and Alcoa employees in comparable roles have also become contentious. 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 face greater scrutiny as the companies move toward combining their aluminium operations. He said employees want an agreement that recognizes 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 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 during the industrial action and does not expect the stoppage to affect production.
Acquisition covers alumina and aluminium assets
Alcoa's proposed transaction with South32 has an implied enterprise value of up to USD 5.6 billion. Announced in July 2026, it 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, about 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 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 enterprise value.
South32 intends to distribute about half of the Alcoa shares it receives, worth around USD 500 million at the time of announcement, to eligible shareholders through a fully franked special dividend after completion. The transaction excludes Mozal Aluminium in Mozambique, which remains under South32 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 October 15, 2026.
Worsley's role in the expanded portfolio
Worsley has annual alumina production capacity of approximately 4.4 million tonnes. Wood Mackenzie estimates the acquisition will raise Alcoa's attributable bauxite production by 53.6 percent to nearly 53 million tonnes a year and attributable alumina production by 51.6 percent. The consultancy also estimates a roughly 26 percent increase in aluminium 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. 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.