We haven’t forgotten
Local mining support sector sends a not-so-gentle reminder to mining head office.
Wednesday 27 September 2017
Seven organisations representing the interests of the resource industry support sector have jointly signed a letter to Queensland’s major mining companies, asking them to review the hyperextended payment terms they enforced at the height of the mining downturn.
Eighteen months ago both BMA and Rio Tinto outraged local businesses when they decided to double the time they would take to pay their bills from 30 to 60 days.
In reality, however, that meant some companies are still waiting more than 120 days to get paid by the time "delays" and other “issues” are resolved in the invoicing process.
It was the first time that the global miners had taken this step, and despite deep resentment, most businesses accepted that slow pay was better than no pay at all.
However now, with recovered coal prices supporting profitable operations across the coalfields, the Resource Industry Network, Gladstone Engineering Alliance, Central Highlands Development Corporation, Toowoomba and Surat Basin Enterprise, Greater Whitsunday Alliance, Townsville Enterprise Limited and Capricorn Enterprise want to ensure that pressure is applied to stop the payment terms becoming enshrined.
“With positive financial results being reported by mining houses, the group requested we revert to more acceptable payment terms of 30 days to enable a sustainable business environment,” the Resource Industry Networks Adrienne Rourke said.
“The regional supply chain has always worked diligently to provide innovative solutions to assist mining houses achieve successful cost-effective and productive outcomes.
"It is widely acknowledged that without these businesses the mining sector would be significantly impacted.
“Ultimately if the extended 60-day payment terms persist there will be fewer suppliers in the market, meaning higher prices, less competition, and the burden of R&D will fall entirely back to
the big miners.”
A recent report by cash flow finance company The Invoice Market found that the number of small and medium-sized enterprises (SME) in mining not being paid on time, is more than double that of other industries. It also found that 36% of mining businesses had more than 20 invoices outstanding which is more than twice the percentage in the non-mining sector.