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.