Workers at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on Nov. 10, seeking greater security over pay and working conditions ahead of Alcoa's planned acquisition of South32's aluminium assets for up to USD 5.6 billion.
The action involves members of the Electrical Trades Union and the Australian Manufacturing Workers' Union. Around 200 union members are employed at Worsley, according to AMWU state secretary Steve McCartney. The stoppage coincides with a scheduled shutdown at the refinery's main processing plant.
Bonus guarantees at issue
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 has argued that South32 has referred to incentive payments when discussing employees' 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.
Working hours and employment conditions also differ between South32 and Alcoa employees in comparable roles. 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 said those differences would face greater scrutiny as the companies move to combine aluminium operations, and employees want 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. It maintained that Worsley employees receive benefits beyond base wages and that its existing short-term incentive policy would continue after the transaction is completed. The company also said it had plans to maintain operations during the industrial action and did not expect the stoppage to affect production.
Deal covers Worsley and global assets
Alcoa's proposed 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, approximately 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 agreed 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 the time of the announcement, to eligible shareholders through a fully franked special dividend after completion. The deal excludes Mozal Aluminium in Mozambique, which remains under South32 ownership and on care and maintenance. South32 shareholders approved the transaction on Oct. 15, 2026, and completion is targeted for June 29, 2027, subject to regulatory and other closing conditions.
Worsley's role in expanded portfolio
Worsley has annual alumina production capacity of approximately 4.4 million tonnes. Wood Mackenzie estimates the acquisition will 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, while lifting aluminium smelting capacity by around 26 per cent.
Alcoa expects the acquisition to generate about USD 900 million in net present value through operational synergies, including better 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.
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 in the proposed acquisition.