Rio Tinto to offer suppliers new payment arrangement

Rio Tinto will no longer be offering an accelerated payment option
for suppliers requiring shorter payment terms than the agreed 30 days.

The
company is working on transitioning agreements for suppliers who are
under this option, which represents around 3 per cent of its 10,000
Australian suppliers.

Last year, Rio Tinto introduced a voluntary
online portal giving its suppliers transparency on their payment status,
allowing them to track payments and view invoices.

It has received “largely positive” feedback from suppliers on the ability to track their payments using the portal.

Rio Tinto’s on-time supplier payments rate stands at around 96 per cent.

“Our
suppliers are vital to our business success and we will continue to
work to improve our partnerships with them,” Rio Tinto chief commercial
officer Simon Trott said.

“We are concerned about any reports that
suggest we are not meeting supplier expectations and encourage
suppliers to work with us and continue providing feedback about how our
processes can be enhanced.

“We are committed to the Australian Supplier Payment Code.”

In
line with this, Rio Tinto has offered to pay small and medium business
suppliers with up to $1 million of annual expenditure within 30 days of
receipt of invoice.

Rio Tinto spent $4.4 billion with 1800 Western Australian-based businesses in 2018.

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