About 200 union members at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on 10 November, seeking firmer security over pay and conditions before Alcoa's planned acquisition of South32'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.
Incentive payments become the sticking point
AMWU state secretary Steve McCartney said Worsley workers had received an average short-term incentive 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 employees' overall remuneration but has not given a binding guarantee that they will be preserved through the ownership change. McCartney said the request was not for higher payments, but for continuation of benefits workers had consistently received.
Working hours differ between the two workforces
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, while South32 day workers complete 40 hours across four 10-hour days. Woodage said those differences 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 said Worsley employees receive benefits beyond base wages and that its existing short-term incentive policy would continue after the transaction is completed. It added that plans were in place to maintain operations at Worsley during the industrial action and that it did not expect the stoppage to affect production.
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. Mozal Aluminium in Mozambique is excluded and remains with South32 under care and maintenance.
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, 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 estimated at approximately USD 1.2 billion, which sit outside the implied enterprise value. South32 intends to distribute roughly half of the Alcoa shares it receives, worth about USD 500 million at the time of announcement, to eligible shareholders through a fully franked special dividend after completion.
South32 shareholders approved the transaction on 15 October 2026. Completion is targeted for 29 June 2027, subject to regulatory and other closing conditions.
Scale of the combined 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 a year and attributable alumina production by 51.6 per cent, while raising aluminium smelting capacity 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. The expanded portfolio is expected to produce about 14.8 million tonnes of alumina and 3.2 million tonnes of aluminium annually once the transaction is completed.
Against that backdrop, securing experienced employees and keeping operations stable at Worsley will remain important as Alcoa prepares to integrate the acquired assets, and the outcome of the enterprise agreement negotiations could shape employment conditions at one of the central facilities in the proposed transaction.