Pay day for QAL, Yarwun suppliers as Rio back flips
RIO Tinto has done a backflip on its plan to double the payment period for its contractors and suppliers.
Rio emailed suppliers and contractors last week with its plan to double payment periods from 45 days to 90.
But yesterday (Thursday), Rio took the change off the table after backlash from suppliers and contractors.
The company has decided to resort back to contract terms that were in place on March 30.
"We value our partnerships with our suppliers and their feedback, so we have taken the decision to maintain our payment terms," a Rio Tinto spokesman said.
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The decision is for existing contracts with the spokesman saying "future arrangements with our suppliers will be negotiated as part of any discussions about new contracts to maintain the competitiveness of our business and our future ability to develop our assets".
The reason for scrapped plan was for the company to ensure it had the cash to operate considering the "continuing volatile outlook for the sector".
"Rio Tinto has taken a number of proactive measurers over the last years to strengthen the company in light of challenging market conditions," the spokesman said.
"As part of these measures, we recently announced changes to the terms of some of our supplier segments to help maintain jobs in a difficult global environment for commodities."