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Rio Tinto asks large suppliers for voluntary 90-day payment terms

Rio TintoCEO Sam Walsh said the group's decision in April to extend the length of payment terms on supply contacts to90 days was based on incorrect information and said the move was a "misjudgment,"MiningNews.net reported May 5 from Rio's AGM.

However, the company is still asking suppliers, whose contractshave been estimated to be worth up to A$24 billion, to voluntarily accept 60-dayor 90-day terms for payments.

According to a Rio Tinto spokesman, the company's "largerand multinational suppliers [will be asked] to consider 60- or 90-day terms, butthis will not be imposed on any business."

The company had subsequently dropped the plan to impose extended payment terms after anumber of Australian companies raised their concerns to the prime minister and otherkey ministers regarding the change as it was going to put cash-flow pressures onsmaller companies.