Around 200 union members at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on November 10, seeking firmer security over pay and working conditions before Alcoa's planned acquisition of the company's aluminium assets, a transaction with an implied enterprise value of up to USD 5.6 billion.
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 put union membership at the operation at about 200 and said workers wanted their existing earnings protected before ownership changes hands. South32 said it had plans in place to maintain operations at Worsley during the industrial action and did not expect the stoppage to affect production.
Incentive payments remain the sticking point
A central issue is the future of short-term incentive payments, which the unions say form 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 those 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 protecting those earnings. McCartney said the request was not for higher payments but for continuation of benefits workers had consistently received.
Working hours under comparison
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 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 said those gaps would come under greater scrutiny as the two companies move towards combining their aluminium operations, and that employees wanted an agreement recognising their skills, contributions and role in the business.
South32 said it was engaging constructively with employees and their representatives during enterprise agreement negotiations. The company maintained that Worsley employees receive benefits beyond base wages and that its existing short-term incentive policy would continue after the transaction is completed.
What the acquisition covers
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 of up to USD 5.6 billion comprises USD 3.1 billion in cash, approximately 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 linked to agreed alumina and aluminium price targets through 2030. Alcoa will also assume rehabilitation provisions associated with the acquired assets, estimated at roughly USD 1.2 billion and separate from the enterprise value. Mozal Aluminium in Mozambique is excluded and remains with South32 under care and maintenance. South32 shareholders approved the transaction on October 15, 2026, and completion is targeted for June 29, 2027, subject to regulatory and other closing conditions. 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.
Scale of the enlarged portfolio
Worsley has an annual alumina production capacity of approximately 4.4 million tonnes. According to Wood Mackenzie, the acquisition will raise 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 aluminium smelting capacity is expected to increase by around 26 per cent. Alcoa expects the deal to generate approximately USD 900 million in net present value through operational synergies, including improved integration between Worsley and its existing Western Australian operations. Once completed, the expanded portfolio is expected to produce about 14.8 million tonnes of alumina and 3.2 million tonnes of aluminium annually.
Against that backdrop, the outcome of the enterprise agreement negotiations will shape employment conditions at a facility central to the planned integration.