Around 200 union members at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on November 10, seeking firmer guarantees on pay and working conditions before Alcoa completes its planned purchase of South32's aluminium assets.
The action involves members of the Electrical Trades Union and the Australian Manufacturing Workers' Union and overlaps with a scheduled shutdown of the refinery's main processing plant. AMWU state secretary Steve McCartney said the workforce wants current earnings protected through the ownership transition.
Incentive payments emerge as the sticking point
Short-term incentive payments form a substantial share of remuneration at Worsley, and workers want them written into the enterprise agreement. McCartney said employees had received an average bonus of 10 per cent over the past five years and that the union was not seeking higher payments, only continuity of benefits already received.
According to the union, South32 has pointed to incentive payments when describing overall remuneration but has not offered a binding commitment to preserve them after the transaction closes.
Working hours add a second point of friction
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 day workers complete 40 hours across four 10-hour days. He said those gaps would attract greater scrutiny as the two companies move to combine their aluminium operations, and that employees want an agreement recognising their skills and contribution.
South32 said it is engaging constructively with employees and their representatives during negotiations, that Worsley staff receive benefits beyond base wages, and that its existing short-term incentive policy would continue after completion. The company said contingency plans were in place and it did not expect the stoppage to affect production.
What the takeover covers
Announced in July 2026, the transaction carries an implied enterprise value of up to USD 5.6 billion and covers South32's 86 per cent interest in Worsley Alumina, 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 Brazil Alumina and a 40 per cent interest in Brazil Aluminium.
The value comprises USD 3.1 billion in cash, roughly USD 1 billion in newly issued Alcoa shares, about USD 750 million in net debt and lease liabilities assumed by Alcoa, and up to USD 750 million in contingent cash payments tied to alumina and aluminium price targets through 2030. Alcoa will separately assume rehabilitation provisions estimated at about USD 1.2 billion.
South32 plans to pass roughly half of the Alcoa shares it receives, worth about USD 500 million at announcement, to eligible shareholders as 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 regulatory and other closing conditions; South32 shareholders approved the deal on October 15, 2026.
Why Worsley matters to the enlarged group
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 output by 51.6 per cent, while adding about 26 per cent to aluminium smelting capacity. Alcoa expects roughly USD 900 million in net present value from operational synergies, including tighter integration between Worsley and its existing Western Australian operations. The enlarged portfolio is projected to produce about 14.8 million tonnes of alumina and 3.2 million tonnes of aluminium annually once the transaction is complete.
With integration still ahead, retaining experienced staff and keeping Worsley running smoothly remain priorities, and the outcome of the enterprise agreement talks could shape employment terms at one of the transaction's central assets.