Brierty to lose $12M as Fortescue cancels contract

Civil construction group Brierty said Fortescue issued the company a termination notice over its 11-month mining services contract late yesterday.The Perth-based company had been contracted until August to perform mining service work, including the removal of overburden at Fortescue’s Cloudbreak mine.Brierty said the contract termination was expected to result in around $A12 million in lost revenue for 2009 and the loss of “a significant number of jobs”.Around 50 people were employed on the contract but Brierty said it hoped to redeploy staff to other projects.“Brierty has been performing an excellent job for FMG at Cloudbreak and we are extremely disappointed with this unexpected news,” Brierty chief executive Stuart Crofts said in an Australian Securities Exchange announcement.A Fortescue spokesman said the miner would use its own fleet and staff to complete the overburden removal.“We used [Brierty] to fast-track the opening up of those pits, but we’re now at a level where we can do it from within the company, thanks to their good work,” he said.He said the contract termination would not impact on Fortescue’s operations or production targets.A spokeswoman for Brierty said Fortescue plans to use its own fleet to complete the overburden removal.Earlier this week Brierty posted a $4.6 million net profit for the six months to December 31. Meanwhile Fortescue this week confirmed it has been in talks with “various parties”, including Anglo American and Chinese sovereign wealth fund China Investment Corporation, over potential investment opportunities.

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