FMG axes Downer

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 06 Apr 2016   Posted by admin


By Cameron Drummond

FORTESCUE Metals Group has swung the axe at its last Christmas Creek contractor Downer EDI as it moves toward a cost-saving owner-operator business model.

FMG consolidated its mine contractors from two to one in February 2015, dropping MacMahon Holdings to give Downer the remaining work at the time.

Downer had serviced the Christmas Creek iron ore mine since 2010.

Fortescue chief executive Nev Power said production from Christmas Creek was not expected to be affected during the transition as the company looked to further improve efficiency and productivity at its operations.

“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,” Mr Power said in a statement.

Downer would provide an orderly handover to FMG across the next six months.

“The transition to an owner-operator model at Christmas Creek is not expected to have an impact on Downer’s 2016 financial results,” the company said in a statement.

Downer EDI shares had declined 8.29 per cent as of 4:00pm EST, Tuesday April 5, to sit at $3.43 per share.