About 200 union members at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on November 10, seeking firmer protection of their 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 said workers wanted their existing earnings safeguarded before the proposed change in ownership.
Incentive payments become the sticking point
A central concern is the future of short-term incentive payments, which 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 to protect 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 working hours and employment conditions between South32 and Alcoa employees in comparable roles have also become a point of contention. 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 argued that these differences would come under greater scrutiny as the two companies move towards combining their aluminium operations, and said 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. It also said it had plans to maintain operations at Worsley Alumina during the industrial action and did not expect the stoppage to affect production.
What the takeover covers
Announced in July 2026, the deal covers South32's 86 per cent interest in Worsley Alumina in Western Australia, 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 to be 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 about USD 1.2 billion, which sit outside that figure.
South32 intends to distribute roughly 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 transaction excludes Mozal Aluminium in Mozambique, which remains under South32's ownership and on care and maintenance. Completion is targeted for June 29, 2027, subject to regulatory and other closing conditions, and South32 shareholders approved the deal on October 15, 2026.
Scale of the combined portfolio
The Worsley refinery has an annual alumina production capacity of approximately 4.4 million tonnes. According to Wood Mackenzie, the acquisition will increase Alcoa's attributable bauxite production by 53.6 per cent to nearly 53 million tonnes annually, raise attributable alumina production by 51.6 per cent and lift 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 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 the transaction closes. Against that backdrop, securing experienced staff and keeping Worsley operations stable will matter as Alcoa prepares to integrate the assets, and the outcome of the enterprise agreement talks could shape conditions at a key facility in the deal.