SYDNEY – Rio Tinto , one of the world’s biggest miners, has doubled its payment terms in a move that will force embattled suppliers to wait up to 90 days to be paid.
A spokesman for the mining giant confirmed the change on Saturday, saying it would sustain jobs and supplier relationships. Previously, the payment term was 45 days.
“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,” said the spokesman, Bruce Tobin. “This initiative is designed to preserve and maintain jobs and suppliers in a tough global environment for commodities.”
Tobin said the company was mindful of the impact moving to 90-day payments could have on suppliers already struggling as mining companies cut costs and that Rio Tinto was preparing to expand a financing program it had been operating with suppliers to its aluminum division.
“We are working with banks to use our strong credit rating to establish an optional supply chain financing program to support suppliers,” he said.
For the rest of this article, click here: http://www.reuters.com/article/us-riotinto-payment-idUSKCN0X606J