About 200 union members at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on November 10, seeking stronger protection of pay and conditions ahead of Alcoa's planned purchase of the company's aluminium assets. The action involves members of the Electrical Trades Union (ETU) and the Australian Manufacturing Workers' Union (AMWU) and coincides with a scheduled shutdown at the refinery's main processing plant.
The ownership change, valued at up to USD 5.6 billion, has turned existing enterprise arrangements and incentive payments into a bargaining flashpoint. AMWU state secretary Steve McCartney put union membership at the Worsley operation at around 200 and said the workforce wants current earnings secured before the transaction takes effect.
Incentive payments at the centre
Short-term incentive payments are the main point of contention. McCartney said Worsley employees have received an average bonus of 10 per cent over the past five years and want that payment locked into their enterprise agreement. The union's argument is that South32 has referenced incentive payments when describing overall remuneration without giving a binding commitment to maintain them. McCartney said the claim is not for higher pay but for the continuation of benefits staff have consistently received.
Working hours divide the two workforces
ETU WA secretary Adam Woodage highlighted differences in working time for comparable roles. Alcoa's shift and day workers are on a 36-hour week, he said, while shift workers at Worsley work 42 hours. South32's day workers complete 40 hours across four 10-hour days. Woodage argued those gaps would come under closer scrutiny as the two companies move to combine their aluminium operations, and said employees want an agreement that recognises their skills, contributions and role in the business.
South32 said it was engaging constructively with employees and their representatives in enterprise agreement negotiations. The company said Worsley staff 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 during the industrial action and did not expect the stoppage to affect production.
What the Alcoa transaction covers
The dispute is playing out 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 stake in Brazil's Mineracao 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 consideration is structured in several parts:
- USD 3.1 billion in cash;
- approximately USD 1 billion in newly issued Alcoa shares;
- about USD 750 million in net debt and lease liabilities assumed by Alcoa;
- up to USD 750 million in contingent cash payments tied to agreed alumina and aluminium price targets through 2030.
Alcoa will also take on rehabilitation provisions attached to the acquired assets, estimated at roughly USD 1.2 billion, which sit outside the implied enterprise value. South32 intends to distribute about half of the Alcoa shares it receives, worth some USD 500 million at the time of announcement, to eligible shareholders as a fully franked special dividend after completion. Mozal Aluminium in Mozambique is excluded and remains with South32 under care and maintenance. Completion is targeted for June 29, 2027, subject to regulatory and other closing conditions, and South32 shareholders approved the transaction on October 15, 2026.
Why Worsley carries weight in the enlarged group
The refinery has annual alumina capacity of about 4.4 million tonnes and features prominently in Alcoa's expansion across the bauxite, alumina and aluminium chain. Wood Mackenzie estimates the acquisition would raise Alcoa's attributable bauxite production by 53.6 per cent to nearly 53 million tonnes a year, lift attributable alumina output by 51.6 per cent and add roughly 26 per cent to aluminium smelting capacity. Alcoa expects about USD 900 million in net present value from operational synergies, including closer integration between Worsley and its existing Western Australian operations. Once completed, the enlarged portfolio is expected to produce about 14.8 million tonnes of alumina and 3.2 million tonnes of aluminium annually.
The stakes in the negotiation
If the operations are combined, Alcoa would inherit a workforce whose shift patterns and incentive structure differ from its own Australian baseline. The enterprise agreement now under negotiation is the instrument through which those differences would be settled, which is why the unions have pressed for binding language rather than assurances. Whatever is agreed before completion could shape employment terms at one of the largest assets in the package.
Two limits are worth keeping in view. South32's statement that production will be unaffected is a company position issued while the stoppage is under way, not an independently verified outcome. And the transaction itself remains subject to closing conditions, with the synergy and expanded output figures representing expectations rather than delivered results.