RTIO will introduce a dedicated procurement team that will work with suppliers to identify local businesses which may be able to provide services to the company.

The team will hold a series of local procurement workshops in the Pilbara and Perth, where information on the company’s forward procurement plans will be shared, and will also launch a web portal which RTIO says will “provide improved visibility of upcoming contracts”.

RTIO CEO Chris Salisbury said the company would also help to link smaller firms with business development specialists to help them develop the capacity to work with the iron ore giant.

 “What we’re announcing today will grow over time, but I have a firm expectation that we will be able to assist more Western Australian and Pilbara Aboriginal businesses obtain work with Rio Tinto straight away,” he said.

The news came as FMG announced plans to launch applications for 14-day payment terms for Pilbara small businesses and Aboriginal-owned businesses, a move it said would improve operational cash flow for suppliers.

FMG CEO Nev Power said the move came after a series of discussions initiated by the company’s procurement and Aboriginal business development teams, which found traditional 30-day payment terms were a barrier to these companies building a sustainable business.

“Ensuring these businesses have the option to apply for favourable payment terms aligns with our broader community vision to build capacity and strengthen communities in the Pilbara,” he said.

FMG says it has signed 240 contracts and sub-contracts worth A$1.85 billion with 103 Aboriginal-owned businesses and joint ventures since the launch of its Billion Opportunities program in 2011.

For its part, RTIO says 77% of its procurement is already with WA suppliers, with over $57 billion spent with WA businesses over the past seven years, with the company using more than 1200 in its Pilbara iron ore business, according to company figures.