WDS chief executive officer Terry Chapman said the contract for its mining division could extend for a second year and he anticipated a seamless transition from the current works as crews were already mobilised at Dendrobium.

“This project will continue our relationship with BHP Billiton Illawarra Coal,” said Chapman. “WDS have undertaken a range of materials handling and mining services projects for BHP Billiton for more than 10 years, including the initial construction and development of the Dendrobium mine.”

In principle agreement on key commercial terms

over a seperate contract dispute with the Metropolitan colliery has now been reached with Peabody, according to WDS.

"While the early termination of the Metropolitan colliery contract was disappointing, we have worked hard with Peabody to find a practical resolution and to preserve our longstanding professional relationship," Chapman said.

"To this end it is encouraging to have recently expanded the scope of our works on Peabody’s North Goonyella project and to have been engaged to perform ramp-up works at Wambo.”