Rio Tinto has dropped a plan to stretch out the amount of time its suppliers must wait for payment, after widespread pushback from mining services firms and a request from the country’s resources minister.
The miner had written to customers this month, informing them it planned to extend its payment terms to 90 days from 45 days, doubling the time its already cash-strapped suppliers would have had to wait for payment.
“We recently announced changes to the terms of some of our supplier segments to help maintain jobs in a difficult global environment for commodities,” a Rio spokesman told Reuters.
“We value our partnerships with our suppliers and their feedback, so we have taken the decision to maintain our payment terms for those suppliers with contracts in place, as they were at March 30.”
Miners and traders have been reviewing contract terms in the most recent effort to wring out final savings after a brutal four-year commodities rout that has only this year started showing signs of bottoming.
After requests by Australian companies to the prime minister, Australian ResourcesMinister Josh Frydenberg requested Rio reconsider its decision.
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