Anglo-Australian mining company BHP Billiton has terminated a development contract for Peak Downs coal mine with Leighton Contractors, costing the latter a sum of $260m.
As per the terms, the contract awarded to the Leighton Holdings' subsidiary to develop the mine at Queensland Bowen Basin was to expire in 2015.
Although Leighton has not disclosed the reason behind the termination, it added that the company is liable to compensate the early termination of contract. The company, however, added that it seeks continual long-term growth citing soaring demand for both thermal and coking coal across the markets including India and China.
Meanwhile, BHP spokesperson was quoted by Business Day stating that the move was made due to increasing costs, decline in the price of commodities, and to reduce the overheads and operating costs.
The company has reviewed contracts and made necessary arrangements to remain cost-competitive, the spokesperson added.
Nevertheless, BHP has awarded the development contract to HSE Mining.
The coal mine that is partly owned by Japanese firm Mitsubishi has 35 years reserve life alongside production capacity of 9 million tons of coking coal every year.
Although Leighton has not disclosed the reason behind the termination, it added that the company is liable to compensate the early termination of contract. The company, however, added that it seeks continual long-term growth citing soaring demand for both thermal and coking coal across the markets including India and China.
Meanwhile, BHP spokesperson was quoted by Business Day stating that the move was made due to increasing costs, decline in the price of commodities, and to reduce the overheads and operating costs.
The company has reviewed contracts and made necessary arrangements to remain cost-competitive, the spokesperson added.
Nevertheless, BHP has awarded the development contract to HSE Mining.
The coal mine that is partly owned by Japanese firm Mitsubishi has 35 years reserve life alongside production capacity of 9 million tons of coking coal every year.
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