One winner out of this race is Hughes Drilling, which has just entered into a competitive three-year contract with mining giant Glencore for the provision of overburden drilling services to Glencore’s 4-6 million tonne per annum Collinsville coal mine.

The contract has two one-year extension options.

Hughes will operate two REICHdrill rigs from its existing fleet to meet the requirements of Collinsville contract.

“It is very pleasing to commence working with such a well-known and respected coal producer and we look forward to a long term relationship with Glencore and the Collinsville Coal Company,” Hughes founder and managing director Bob Hughes said.

He said the company was keen to grow its business in Queensland’s Bowen Basin.

Hughes described his company, which does not undertake exploration drilling, as “one of Australia’s premier coal production drilling specialists”.

Collinsville is an open-cut coking and steaming coal mine located in central Queensland and is part of the NCA [Newlands, Collinsville, Abbott Point] project.

The mine has been in operation for almost 100 years and has been owned by Glencore since its takeover of Mount Isa Mines in 2003.

In 2013, Glencore took direct control of the mine’s day-to-day operations, ending a long-standing contract with Thiess as the struggling mine’s owner sought to address plummeting coal prices.

While the mine has been carrying substantial losses and rumours of its imminent closure have been bandied around, the appointment of Hughes indicates that Swiss-based Glencore is comfortable with Collinsville’s immediate future despite depressed coal prices.

While Hughes is enjoying its new contract award, the news is not so great for beleaguered Boart Longyear, which is finding its relationship with Pilbara iron ore giant BHP Billiton frosty to say the least.

It is understood that BHP tried to force Boart to drop its rates by between 15- 25% on existing contracts as the major seeks to save $A4.8 billion in annual costs over the next two years.

The Boart contract is a modest one for both firms, so the contractor elected to pull between 6-10 rigs out of the Pilbara rather than agree to substantially cutting its rates. It is not known if the rigs have other work to go to or if they will be stacked up to reduce operating costs.

Boart recently completed a $US430 million recapitalisation and is now under the control of US private equity group Centrebridge.

The driller is seeking to raise $A103 million via an underwritten rights issue that is due to close next week.