Leighton Contractors will cease operating at Peak Downs on July 3, 2013.

It estimates the maximum impact of the reduction of work in hand over the two years to 2015 is approximately $260 million.

“Against a backdrop of increasing costs and falling commodity prices, BMA continues to focus on reducing its overheads and operating costs across the business,” a BHP spokeswoman told ILN.

“This includes reviewing contractor arrangements and making the necessary adjustments to ensure operations can remain cost-competitive.”

Leighton Contractors will be entitled to compensation for early termination.

It is understood that BMA will work with Leighton contractors to transition to arrangements with a pre-strip contractor HSE Mining.

BHP Billiton is running a ruler over all its coal mines in a bid to rein in costs.

It has up to $US25 billion of non-core assets it could sell, according to research by Deutsche Bank.

“BHP Billiton confirms that consistent with our commitment to simplify the portfolio, we continue to selectively pursue asset divestment opportunities, with a firm focus on value,” a BHP spokeswoman said.

“Any decision to divest an asset will be announced to the market as required.”

BMA has already started pruning its Queensland portfolio with the decision to offload the depleted Gregory mine, while keeping its options open to develop or sell the adjacent Crinum underground mine.

The conveyor gantry at Crinum South has been partially dismantled prior to relocation to Gregory to feed the Crinum East product.

HSE Mining (formally known as Howard Springs Earthmoving) is a privately owned Australian company established in the Northern Territory in 1991.

Its head office is in Perth and it has branch offices in Queensland.

HSE Mining has grown rapidly since its formation and owns a fleet of more than 150 specialised machines.

It was recently awarded a five-year pre-stripping contract by BMA at the Saraji minesite in central Queensland.

The pre-stripping operation involves the annual excavation of 42 million bank cubic metres of overburden ahead of BMA’s coal mining operations.

HSE has mobilised a number of excavator and truck fleets to the site and currently has 360 employees onsite.

HSE also has a pre-stripping contract with Ensham Resources in Emerald in Queensland and is working on the next seven-year mine life plan for the pre-stripping fleet onsite.