Rio Tinto Group (ASX:RIO) 51% owned Tomago Aluminium near Newcastle, NSW, has begun facing industrial action Wednesday as over 500 workers, represented by the Australian Workers Union (AWU), push for a better pay deal, the Australian reported Wednesday.

The AWU is demanding 4% annual pay increases over three years, along with AU$1,000 sign-on bonuses and back pay, per the report.

In contrast, Tomago has proposed a 4% pay rise in the first year, followed by 3.5% increases in each of the next two years, along with a one-off AU$1,000 sign-on payment and no back pay, leading to the stoppages.

The strike, which will initially involve 30-minute work stoppages, will see some workers walking off the job up to three hours before the end of their shifts, comes amid external pressures, including the threat of US tariffs on Australian aluminum, the report added.

Tomago produces 600,000 tonnes of aluminum annually and employs over 1,000 people.

The dispute is set to escalate if no agreement is reached.

RIO and Tomago Aluminium did not immediately respond to MT Newswires' request for comment.

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