RIO Rio Tinto Plc

   By Rhiannon Hoyle 
 

SYDNEY--Rio Tinto PLC (RIO.LN) has abandoned plans to double the length of its payment terms with suppliers, a move aimed at freeing up cash amid a market downturn, following backlash from contractors and politicians.

The company said on Saturday it would transition to longer payment terms that could have led to suppliers waiting up to 90 days to be paid, from 45 days currently. The new policy was intended to apply to all suppliers with contracts of more than 3 million Australian dollars (US$2.3 million) each.

The move prompted an outcry. Speaking to Australia's public radio broadcaster on Tuesday, Brendon Grylls, a lawmaker in Australia's Nationals party, described the proposed move as "blatantly unfair." Prime Minister Malcolm Turnbull said he would speak to Rio Tinto after concerns were raised with him by mining suppliers in Western Australia state, home of Rio Tinto's vast iron-ore mining hub.

On Thursday, the miner backtracked on the plan.

"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," a spokesman said in an emailed statement.

Rio Tinto, which has been grappling with a sharp fall in the value of its commodities, including iron ore, swung to an annual loss in 2015, as it wrote down the value of assets in places including Australia, Canada and Guinea.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

April 14, 2016 03:22 ET (07:22 GMT)

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