Workers at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on 10 November, seeking greater security over pay and working conditions before Alcoa's proposed acquisition of South32's aluminium assets.
The action involves members of the Electrical Trades Union and the Australian Manufacturing Workers' Union. Around 200 union members work at the Worsley operation, according to AMWU state secretary Steve McCartney. The stoppage coincides with a scheduled shutdown at the refinery's main processing plant.
Bonus guarantees at centre of dispute
McCartney said Worsley workers had received an average bonus of 10 per cent over the past five years and wanted short-term incentive payments secured through their enterprise agreement. The union says South32 has referred to incentive payments when discussing overall remuneration but has not given a binding guarantee to protect those earnings.
He said the request was not for higher payments but for continuation of benefits workers had consistently received. South32 said Worsley employees receive benefits beyond base wages and that its existing short-term incentive policy would continue after the transaction is completed.
Working hours add to concerns
Differences in working hours 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 those differences would face greater scrutiny as the companies move towards combining their aluminium operations. He said employees wanted an agreement that recognised their skills, contributions and role in the business.
Takeover covers Worsley and other assets
The dispute is unfolding against Alcoa's proposed acquisition of a substantial part of South32's aluminium value chain, 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.
- 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.
- 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 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, 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 29 June 2027, subject to regulatory and other closing conditions. South32 shareholders approved the transaction on 15 October 2026.
Worsley's role in expanded portfolio
Worsley has an annual alumina production capacity of approximately 4.4 million tonnes. According to Wood Mackenzie, the acquisition would increase Alcoa's attributable bauxite production by 53.6 per cent to nearly 53 million tonnes annually and attributable alumina production by 51.6 per cent. The consultancy also estimates the transaction would raise 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 around 14.8 million tonnes of alumina and 3.2 million tonnes of aluminium annually once the transaction is completed.
South32 said it was engaging constructively with employees and their representatives during enterprise agreement negotiations. It said it had plans to maintain operations at Worsley during the industrial action and did not expect the stoppage to affect production. The outcome of the negotiations could shape employment conditions at a key facility in the proposed acquisition.