About 200 union members at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on November 10, pressing for stronger guarantees on pay and conditions before Alcoa's planned acquisition of South32's aluminium assets for up to USD 5.6 billion. The action by the Electrical Trades Union and the Australian Manufacturing Workers' Union coincides with a scheduled shutdown at the refinery's main processing plant. South32 said it had plans to maintain operations and did not expect production to be affected.
The central dispute is the future of short-term incentive payments, which the unions say form a significant part of remuneration. AMWU state secretary Steve McCartney said Worsley workers had received an average bonus of 10 per cent over the past five years and wanted those payments secured in the enterprise agreement. The union argued that South32 has referred to incentive payments when discussing overall remuneration but has not given a binding guarantee. McCartney said the request was for continuation of existing benefits, not higher payments.
Working-time differences between South32 and Alcoa employees in comparable roles have added to the tension. ETU WA secretary Adam Woodage said Alcoa's shift and day workers have a 36-hour week, while Worsley shift workers work 42 hours. South32 day workers complete 40 hours across four 10-hour days. Woodage said those differences would face closer scrutiny as the companies move toward combining their aluminium operations, and that employees wanted an agreement recognising their skills and contribution.
South32 said it was negotiating constructively with employees and their representatives. The company maintained that Worsley employees receive benefits beyond base wages and that its existing short-term incentive policy would continue after the transaction closes.
The stoppage comes as Alcoa prepares to acquire a substantial part of South32's aluminium value chain. The transaction, announced in July 2026, 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, 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 tied to 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 announcement, through a fully franked special dividend after completion.
South32 shareholders approved the transaction on October 15, 2026. Completion is targeted for June 29, 2027, subject to regulatory and other closing conditions. The deal excludes the Mozal aluminium smelter in Mozambique, which remains owned by South32 and on care and maintenance.
Worsley has annual alumina production capacity of about 4.4 million tonnes. Wood Mackenzie estimates 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 increasing aluminium smelting capacity by around 26 per cent. 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 once completed.
With Worsley central to that plan, securing experienced staff and stable operations will be important during integration. The outcome of the enterprise agreement talks could therefore shape employment conditions at one of the key assets in the proposed acquisition.