Gindalbie Metals has awarded Downer EDI Mining the contract to mine its Karara iron ore project.
Valued at approximately $570 million over six years, the contract is on the largest single operation contracts for the project.
According to Gindablie, the contract includes the provision of drill and blast, and load and haul services, and is based on a mining rate of around 30 million tonnes per annum.
This will comprise around 20 million tonnes of ore and ten million tonnes of waste for the production of eight million tonnes of dry magnetite.
Partial pre-stripping of the orebody began earlier this year as a result of trial mining operations focusing on the near surface hematite ore.
Full scale pre-stripping of the main magnetite orebody will begin soon.
Work on site is scheduled to begin immediately.
Personnel will be mobilised throughout the year, with production to ramp up over the course of the year in line with commissioning.
Downer will spend approximately $92 million on the project.
Commenting on the contract, Downer CEO Grant Fenn stated the company looks forward to working with Karara over the next six years.
It comes after Gindablie awarded the tailings contract to Bis Industries.
The Karara project will use a dry tailings system at the mine, differentiating the tailings management system from conventional tailings dams or evaporation ponds.
By using a dry tailings management system it will allow the project to reduce its water usage by about a third.
The contract, worth approximately $23 million per year, will use a Mobile Stacking System provided by FL Smidth, which is designed to handle up to 18.2 million tonnes of tailings annually, or the equivalent tailings from the production of ten million tonnes of magnetite concentrate.
The miner has also signed a long term iron ore rail agreement with WestNet Rail.
Gindalbie managing director Tim Netscher said the awarding of the open cut mining contract is a major milestone for the Karara project.
"The start of the open pit mining will see the beginning of another huge transformation for the Karara site as development of one of the largest open puts in Western Australia commences," he said.
"With the final pit measuring 3km long, 800 m wide and 300m deep, in time the Karara pit will be of a similar size to other large mining pits in WA, such as the Super Pit in Kalgoorlie."
The contract will employ around 120 personnel and require two hydraulic shovels, nine large capacity ore haulage trucks, drill rigs, and other support equipment.
Gindalbie has also recently launched a recruiment campaign for the mine.
is seeking up to 200 workers, all fly in fly out, for the $2.47 billion project.
The campaign will mainly focus on skilled tradespeople in Western Australia’s south and mid-west.