About 200 union members at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on November 10, pressing for binding guarantees on pay and working conditions before Alcoa completes its acquisition of the company's aluminium assets.
The action, involving members of the Electrical Trades Union (ETU) and the Australian Manufacturing Workers' Union (AMWU), coincides with a scheduled shutdown at the refinery's main processing plant. According to AMWU state secretary Steve McCartney, around 200 union members work at the Worsley operation, and they want their existing earnings protected before ownership changes hands.
Incentive payments at the centre of the dispute
Short-term incentive payments have emerged as the main sticking point. McCartney said Worsley workers have received an average bonus of 10 per cent over the past five years and want those payments secured through their enterprise agreement.
The union argues that South32 has cited incentive payments when describing employees' overall remuneration but has not provided a binding guarantee to protect them. McCartney said the request was not for higher payments but for continuation of benefits workers had consistently received.
Working-hours gap between the two employers
Differences in hours and conditions have also become contentious. ETU WA secretary Adam Woodage said Alcoa's shift and day workers have 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 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 says operations are covered
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 Alumina during the industrial action and that it did not expect the stoppage to affect production.
What the transaction covers
The dispute is unfolding against a deal announced in July 2026 with an implied enterprise value of up to USD 5.6 billion. It 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 comprises USD 3.1 billion in cash, about USD 1 billion in newly issued Alcoa shares, roughly 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 estimated at approximately USD 1.2 billion, which sit outside the implied 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. Mozal Aluminium in Mozambique is excluded and remains with South32 on care and maintenance. Completion is targeted for June 29, 2027, subject to regulatory and other closing conditions; South32 shareholders approved the transaction on October 15, 2026.
Worsley's place in the enlarged portfolio
Worsley has an 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 smelting capacity would increase by around 26 per cent.
Alcoa expects about USD 900 million in net present value from operational synergies, including improved integration between Worsley and its existing Western Australian operations. The enlarged portfolio is expected to produce approximately 14.8 million tonnes of alumina and 3.2 million tonnes of aluminium annually once the transaction closes.