Australian iron ore producer Fortescue Metals is set to scrap its contract with Downer at Christmas Creek mine in the Pilbara region of Western Australia as it plans to move to a full owner-operator model.

The latest decision comes as the company’s existing mining services contract with Downer will expire on 30 September 2016.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

Fortescue said that it will transition to a full owner-operator model at the mine, and a comprehensive change management plan has been developed which will allow for the safe transition of operations.

“Our ability to generate strong earnings and cash flow will enable further improvement in our balance sheet.”

The transition is not expected to impact production from the mine.

Fortescue Metals CEO Nev Power said: “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 world class 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.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

“Our ability to generate strong earnings and cash flow will enable further improvement in our balance sheet and return to our shareholders.”

Over the course of the next six months, Downer intends to hand over operations at the Christmas Creek mine operation to Fortescue.

In February 2015, Downer secured the $720m expanded contract to perform mining services at the Christmas Creek open cut mine.

The contract included drill and blast, and load and haul of overburden and iron ore.

The company has provided mining services to Fortescue since September 2010.