Workers at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on November 10, with members of the Electrical Trades Union and the Australian Manufacturing Workers' Union seeking greater security over remuneration and working conditions ahead of Alcoa's planned acquisition of South32's aluminium assets for up to USD 5.6 billion. The stoppage coincides with a scheduled shutdown at the refinery's main processing plant. Around 200 union members are employed at Worsley, according to AMWU state secretary Steve McCartney, who said workers wanted their existing earnings protected before the proposed ownership change.
Bonus guarantees at the centre of the dispute
A major concern is the future of short-term incentive payments, which have formed a significant part of employees' remuneration. McCartney said Worsley workers had received an average bonus of 10 per cent over the past five years and wanted the payments secured through their enterprise agreement. The union argues that South32 has referred to incentive payments when discussing overall remuneration but has not provided a binding guarantee to protect those earnings. McCartney said the request was not for higher payments but for continuation of benefits workers had consistently received.
Differences in working hours and employment conditions between South32 and Alcoa employees in comparable roles 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 argued that these differences would come under greater scrutiny as the companies move towards combining their aluminium operations, and that employees wanted an agreement recognising their skills, contributions and role in the business.
Company position and production expectations
South32 said it was engaging constructively with employees and their representatives during enterprise agreement negotiations. The company maintains that Worsley employees receive benefits beyond their base wages and that its existing short-term incentive policy would continue after the transaction is completed. South32 also said it had plans to maintain operations at Worsley Alumina during the industrial action and did not expect the stoppage to affect production.
Alcoa's proposed acquisition
The dispute comes as Alcoa prepares to take over a substantial part of South32's aluminium value chain through a transaction with an implied enterprise value of up to USD 5.6 billion, announced in July 2026. The deal 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 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 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 associated with the acquired assets, estimated at approximately 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 following completion. The transaction excludes Mozal Aluminium in Mozambique, which remains under South32's ownership and on care and maintenance. Completion is targeted by June 29, 2027, subject to regulatory and other closing conditions; South32 shareholders approved the transaction on October 15, 2026.
Worsley's role in the expanded portfolio
Worsley has an annual alumina production capacity of approximately 4.4 million tonnes, making it an important asset in Western Australia's alumina industry. According to Wood Mackenzie, the acquisition will increase Alcoa's attributable bauxite production by 53.6 per cent to nearly 53 million tonnes annually, while attributable alumina production is expected to rise by 51.6 per cent. The consultancy also estimates that the transaction will increase Alcoa's aluminium smelting capacity by around 26 per cent. Alcoa expects the acquisition to generate approximately 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.
Against this backdrop, 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 included in the proposed acquisition.