Rio Tinto has abandoned a controversial decision to double its payment period following fierce criticism from the West Australian government and suppliers.
The payment time is back to 45 days after the decision to hold off paying bills to suppliers for 90 days was slammed as a misuse of market power by WA premier Colin Barnett and Treasurer Mike Nahan.
They warned it would squeeze small businesses into possible collapse.
Rio Tinto chief executive Sam Walsh wrote to suppliers in April, saying the change was needed to free up cash for the miner in a tough global environment for commodities.
A Rio Tinto spokesman confirmed the backflip on Thursday, saying payment terms would remain as they were for existing suppliers from before March 30.
However, no guarantees have been made for future contracts.
"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," the spokesman said in a statement.
BHP increased its payment period from 30 to 60 days in 2015.
Hours after labelling Rio Tinto's 90-day period an outrage on radio, Mr Nahan congratulated the company on its reversal.
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