The six-year contract with Karara Mining is for drill and blast and load and haul services at the site based on a mining rate of around 30 million tonnes per annum, which would produce initially around 8Mtpa of dry magnetite concentrate.

Partial pre-stripping of the main Karara magnetite orebody began last month as a result of trial mining operations focused on near-surface hematite ore at Karara South and Karara East.

Full scale pre-stripping is scheduled to start shortly.

Karara Mining is a joint venture between Gindalbie Metals and China’s AnSteel and the first shipment of magnetite concentrate from Karara is due in the September quarter.

Around 120 personnel will be required for the contract and will be mobilised throughout the year, along with two hydraulic shovels, nine large-capacity ore haulage trucks, drill rigs and numerous items of support equipment.

“The start of open pit mining will see the beginning of another huge transformation for the Karara site as development of one of the largest open pits in WA starts,” Gindalbie managing director Tim Netscher said in a statement.

“With the final pit measuring 3 kilometres long, 800 metres wide and 300 metres 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-Boulder.”

Shares in Downer EDI were unchanged in morning trade on $3.54, as were shares in Gindalbie on 64c.