I believe you've misread the quotation, which seems to be a *criticism* of Engels's materialist reading of Hegel. In Hegel, as in monotheist religions generally, alienation is simply the ontological human condition. It is expresed theologically under the rubric of the "Fall." And it is not the mind/matter oppostion that is primary but the subject/object polarity: the subject does not understand that the object its own externalized self, and that is the seminal form of alienation--the objective appears to be, but is not, alien to the subject.
Now, this condition of alienation takes various historical forms, of which the alienation of labour is one. In a Marxist reading, it is the determining form taken by alienation in *all* civilized societies. Capital is merely the latest (as Marx claims the final) form taken by the alienation of labour. The key here is to understand that Marx conceived of "labour-power" as the totality of subjective human activity, which is to say, of human life itself. So the capital/labour opposition is a historically specific form of Hegel's primal subject/object dialectic.