BHP Billiton has suspended mining at its Yarrie iron ore operation, leaving the future of its Mt Goldsworthy rail line in doubt.
Yarrie is the last of BHP's once mighty Mt Goldsworthy operations after the closure of Nimingarra in 2007 and Shay Gap in 1993.
BHP put the primary crushers at Yarrie on care and maintenance in 2007 and it has since run the mine as its smallest operation, with a maximum output of two million tonnes a year. The mine, a joint venture between BHP (85 per cent) and Japan's Mitsui and ITOCHU, produced about 1.3 million tonnes of iron ore last financial year.
The company said yesterday it had suspended mining but would continue shipping stockpiled ore as it considered the mine's future. About 80 of the 160 workers will move to BHP's newly opened Jimblebar mine, according to a spokeswoman, with the company seeking to redeploy the rest within its other Pilbara operations.
BHP would not speculate on the future of its Mt Goldsworthy rail line. It is the only BHP line declared open to access by third parties after a landmark 2010 ruling by the Australian Competition Tribunal.
Atlas Iron and BHP spent much of the first half of 2011 locked in talks over access to the infrastructure but negotiations broke down.
While BHP could return Yarrie to production - it would not comment on the future of the line if the mine was permanently mothballed - Mt Goldsworthy may still be an option for Atlas as it seeks a haulage deal for some of its undeveloped Pilbara assets.
Atlas' McPhee Creek and Corunna Downs deposits are about 120km south of Yarrie, making its rail line a potential transport option for Atlas if a linking route could be found.
BHP also said yesterday it would complete the process of bringing all of its Pilbara workforce in-house by the end of the financial year, telling Macmahon Holdings it would end its Ore- body 18 contract on June 30.
BHP began the move to owner-operation in 2011 when it acquired HWE Mining from Leighton, and Orebody 18 was BHP's last remaining contractor-run mine.
BHP shares finished 28Â¢ lower to $39.10 yesterday. Macmahon shares closed down 0.5Â¢ to 12.5Â¢.