Around 200 union members at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on 10 November, seeking firmer protection of pay and conditions before Alcoa completes its purchase of the site as part of a wider asset transaction worth up to USD 5.6 billion.
The action involves members of the Electrical Trades Union (ETU) and the Australian Manufacturing Workers' Union (AMWU) and overlaps with a scheduled shutdown of the refinery's main processing plant. AMWU state secretary Steve McCartney put union membership at the Worsley operation at roughly 200 and said workers wanted their existing earnings secured before ownership changes.
Incentive payments are the sticking point
Short-term incentive payments sit at the centre of the dispute. McCartney said Worsley employees had received an average bonus of 10 per cent over the past five years and wanted the payment written into their enterprise agreement. The unions argue that South32 has cited incentive payments when describing overall remuneration but has not offered a binding guarantee to protect them. According to McCartney, the claim is not for higher pay but for continuity of benefits staff have consistently received.
Working hours have also become a point of friction. ETU WA secretary Adam Woodage said Alcoa's shift and day workers operate 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 closer scrutiny as the two companies' aluminium operations are combined, 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, that Worsley staff receive benefits beyond base wages, and that its existing short-term incentive policy would continue once the transaction is completed. The company said it had plans in place to keep the refinery operating during the industrial action and did not expect the stoppage to affect production.
What the Alcoa transaction covers
Announced in July 2026, the deal carries 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.
That 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 by Alcoa, and up to USD 750 million in contingent cash payments linked to agreed alumina and aluminium price targets through 2030. Alcoa will additionally assume rehabilitation provisions estimated at about 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. Mozal Aluminium in Mozambique is excluded and remains under South32 ownership on care and maintenance. Completion is targeted for 29 June 2027, subject to regulatory and other closing conditions; South32 shareholders approved the transaction on 15 October 2026.
Worsley's place in the enlarged portfolio
Worsley has annual alumina production capacity of approximately 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 aluminium smelting capacity grows by around 26 per cent. Alcoa expects the deal to generate about USD 900 million in net present value through operational synergies, including closer integration between Worsley and its existing Western Australian operations. Once completed, the enlarged portfolio is expected to produce roughly 14.8 million tonnes of alumina and 3.2 million tonnes of aluminium annually.
Against that backdrop, holding on to experienced staff and keeping Worsley stable will matter as Alcoa absorbs the assets, and the outcome of the enterprise agreement talks could shape employment conditions at one of the transaction's central facilities.