We announced at the Rio Tinto results presentation in February that we would be embarking on a further round of measures to free up cash and reduce working capital, this initiative is designed to preserve and maintain jobs and suppliers in a tough global environment for commodities.

Bruce Tobin

Categorized in : Industrials

We are working with banks to use our strong credit rating to establish an optional supply chain financing programme to support suppliers, this programme is being piloted with several suppliers in our aluminium business, and we intend to make it more broadly available from mid-year 2016. According to a report in The Weekend Australian on Saturday, Rio Tinto's new terms will apply to all contracts valued at $ 3 million or more. Suppliers whose contracts are valued at less than $ 3 million will receive payment in 60 days. The Weekend Australian on Saturday also reported that Rio Tinto chief executive Sam Wash had written to suppliers inviting any who believed they should be exempt from the new payment terms to contact the company. Rio Tinto offers exemptions to suppliers that are registered charities, certain community and indigenous organisations and some government suppliers. Rival mining giant BHP Billiton moved to 60-day supplier payment terms about 18 months ago. A spokeswoman said on Saturday the company retained significant flexibility in terms of arrangements with small business suppliers.

industrials