Workers at South32's Worsley Alumina refinery in Western Australia began a 48-hour stoppage on 10 November, seeking greater security over remuneration and working conditions ahead of Alcoa's planned acquisition. The action involves members of the Electrical Trades Union and the Australian Manufacturing Workers' Union; around 200 union members are employed at the operation.
The stoppage coincides with a scheduled shutdown at the refinery's main processing plant.
Bonus guarantees at issue
AMWU state secretary Steve McCartney said Worsley workers had received an average bonus of 10 per cent over the past five years and wanted the short-term incentive payments secured through their enterprise agreement. The union says South32 has referred to incentive payments when discussing overall remuneration but has not provided a binding guarantee. McCartney said the request was not for higher payments but for continuation of benefits workers had consistently received.
Working hours are another point of contention. 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. South32's day workers complete 40 hours across four 10-hour days. Woodage said those differences would face greater scrutiny as the companies move towards combining their aluminium operations.
Company response
South32 said it was engaging constructively with employees and their representatives during enterprise agreement negotiations. It said Worsley employees receive benefits beyond base wages and that its existing short-term incentive policy would continue after the transaction is completed. The company also said it had plans to maintain operations during the industrial action and did not expect the stoppage to affect production.
Scope of the planned acquisition
Alcoa's planned transaction has 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 Brazil Alumina and a 40 per cent interest in Brazil Aluminium.
The implied value comprises USD 3.1 billion in cash, about 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 alumina and aluminium price targets through 2030. Alcoa would also assume rehabilitation provisions estimated at about USD 1.2 billion, separate from the implied enterprise value.
Announced in July 2026, the deal is targeted for completion by 29 June 2027, subject to regulatory and other closing conditions. South32 shareholders approved the transaction on 15 October 2026. South32 intends to distribute about half of the Alcoa shares it receives, worth around USD 500 million at announcement, to eligible shareholders through a fully franked special dividend after completion. Mozal Aluminium in Mozambique is excluded and remains under South32's ownership on care and maintenance.
Worsley's role in the enlarged group
Worsley has annual alumina production capacity of about 4.4 million tonnes. Wood Mackenzie estimates the acquisition would 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 rise by about 26 per cent. Alcoa expects about USD 900 million in net present value from operational synergies. The enlarged portfolio is expected to produce about 14.8 million tonnes of alumina and 3.2 million tonnes of aluminium annually after completion.
The talks therefore carry significance beyond the immediate stoppage, because Worsley's workforce stability will matter as Alcoa prepares to integrate the assets. The outcome of the enterprise agreement negotiations could shape employment conditions at a key facility in the proposed transaction.