Downer’s contract at Fortescue Metals‘ Christmas Creek mine will not be renewed as the miner moves to a an owner-operator model.
The contractor made the announcement yesterday, stating it has been in discussions with FMG about the transition of the mine to Fortescue following the expiry of the current mining contract.
“Over the course of the next six months it is Downer’s intention to provide a safe and orderly handover of the Christmas Creek mine to Fortescue,” Downer said in a company statement.
Fortescue Metals added: “A comprehensive change management plan has been developed. Production from Christmas Creek is not expected to be impacted during the transition.”
FMG CEO Nev Power thanked Downer for its work at the site.
“The Downer team have been involved with mining at Christmas Creek since the outset and have played an important role in Fortescue’s development of our facilities in the Chichester Hub.
“Adoption of an owner operator model will further reduce Fortescue’s costs through ongoing improvement of the efficiency and productivity of our Christmas Creek mining operations.”
It is unknown how the move will affect the approximately 900 workers at the site.
Downer has been working at the mine since 2010, and was handed Macmahon’s former contract last year after FMG merged two service contracts into one, creating a contract worth $500 million for Downer.
Despite the move off Christmas Creek, Downer does not expect the transition to have an effect on its 2016 financial results.