Workers extend strike at Alcoa's alumina operations in Western Australia

Workers at Alcoa's alumina and bauxite operations in Western Australia have voted to reject a proposed workplace agreement and will continue to strike, a trade union said on Friday.

Around 1,500 staff at three alumina refineries and two bauxite mines walked out on Aug. 8 over a new workplace agreement they say does not offer sufficient job security.

The strike threatens to stoke shortages of alumina, a white powder used to produce aluminium, which has already been hit by a partial shutdown at the world's largest refinery in Brazil and sanctions on global aluminium giant Rusal.

Around 1,500 staff at three alumina refineries and two bauxite mines walked out on Aug. 8 over a new workplace agreement they say does not offer sufficient job security.

U.S. company Alcoa, which has continued to run its operations in the state of Western Australia, said in a statement on Friday that it would monitor the situation and would welcome an alternative proposal from union workers.

The Australian Workers Union (AWU) said 80 percent of workers had voted to reject the new workplace agreement. "This decisive vote should provide Alcoa management with the impetus to come back to the table with job security assurances," said AWU National Secretary Daniel Walton.

Alcoa said production of alumina had been cut by a total of about 15,000 tonnes in August. The operations normally churn out about 9 million tonnes a year, or 25,000 tonnes a day.

The refineries and mines are owned by Alcoa of Australia Ltd, which is part of the AWAC group of companies. Sixty percent of AWAC is held by Alcoa and 40 percent by Alumina Ltd.

Alcoa has applied to terminate an existing workplace agreement, with a court hearing set to last five days from Sept. 17, a union spokesman told Reuters. If it is successful in that, Alcoa may have a stronger hand in negotiations over the new workplace agreement.

Meanwhile, the company is also negotiating with 1,030 members of the United Steelworkers union to resolve an eight-month lockout of workers at its ABI aluminum smelter in Canada.

Alumina prices have surged by 40 percent since late June to around $638 a tonne after regulators ordered Norsk Hydro to slash output at its Brazilian refinery by half in February over pollution concerns. Hydro said on Thursday it was making progress to restart the plant.

Shares in AWAC were down 4 percent by 0306 GMT in a slightly lower Australian market, while in New York, shares in Alcoa sank 5.9 percent on Thursday.

"The equity market rightly or wrongly is saying Norsk is edging closer to a restart, so alumina prices are closer to a peak, therefore the share prices have done about as much as they will do," said analyst Peter O'Conner of Shaw and Partners in Sydney. (Reporting by Melanie Burton Editing by Richard Pullin and Joseph Radford)