Rio transitions to new pay schedule for small suppliers
PERTH (miningweekly.com) – Diversified major Rio Tinto has announced that it will transition its small Australian suppliers to shorter payment terms, which will see them being paid within 20 days of the miner receiving a valid invoice.
The shorter terms will be applied to suppliers with an annual turnover up to A$10-million, with Rio saying the decision reflected the company’s recognition of the importance of ensuring smaller suppliers, who are often local to its Australian operations, are paid in a timely manner.
“Small businesses are often the lifeblood of the communities in which we operate and being paid quickly is important for their cash flows. That is why we are shortening our payment terms to less than three weeks in order to further strengthen our partnership with smaller Australian suppliers, that are a vital part of Rio’s supply chain,” said Rio chief commercial officer Simon Trott.
“As a result of the new policy, around 90% of Rio Tinto’s Australian business suppliers will be paid within 20 days.”
The Western Australian Chamber of Minerals and Energy (CME) on Wednesday added that the resources sector had extensive procurement processes and initiatives to ensure small local businesses benefited from the multibillion-dollar projects of some of the state’s largest mining and oil and gas companies.
“The resources sector is continuing to demonstrate its commitment to local jobs, training and procurement to meet the current and future demands of industry,” said CME CEO Paul Everingham.
“A survey of just 41 organisations within CME’s membership revealed more than 13 650 Western Australian businesses were supported by the resources sector in 2018.”
In 2018, Rio’s supplier spend in Australia was around A$14-billion.
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