The move is being prompted by the review of Xstrata’s operations last year in response to low coal prices and the high Australian dollar.

Peabody is converting its Wilpinjong and Millenium to owner-operator status this quarter.

Leighton Holdings subsidiary Thiess yesterday announced it had entered into a transition agreement to transfer Collinsville to owner-operator status by August.

An Xstrata spokesperson said the Bowen Basin mine suffered substantial financial losses in 2012/13 as a result of a combination of factors and the change aimed to restore the mine’s viability.

“Since Xstrata Coal acquired majority ownership of the mine in 2003, day-to-day operations have been managed by Thiess,” he said.

“In recent months, Xstrata Coal has been working closely with Thiess to assess all possible options for the mine’s future.

“Despite efforts to restore the mine’s profitability, a more comprehensive reorganisation is now required if it is to be viable, provide employment and play a role in the community.”

As owner-operator, Xstrata Coal will be able to make the decisions and changes necessary to improve productivity and reduce costs, according to the company.

The transition agreement included an in-principle commitment that Thiess might retain a reduced scope of work onsite from August, the value of which was yet to be quantified, Thiess said in a statement.

“Thiess has a strong, long-term relationship with Xstrata Coal and both companies are working together to secure a strong future,” Thiess said.

“While final details are still being discussed, Thiess estimates the maximum impact is a reduction of work in hand at Collinsville over the four years to 2016 of approximately $650 million, with negligible impact in 2013.”

Thiess has approximately $9.8 billion worth of contract mining work in hand over the next five years, with an additional $6 billion worth of work that extends beyond this period.

“Thiess continues to see solid long-term growth in demand for both thermal and coking coal, driven chiefly by India and China, which should support demand for their contract mining market services for the foreseeable future,” the company said.

Thiess indiscriminately retrenched 95 of its employees at the Xstrata-owned mine in Queensland last December without transparency, according to the Construction, Forestry, Mining and Energy Union.

The announcement was made in response to plunging coal prices that hit the profitability of the mine and other coal mines in Queensland and New South Wales.

CFMEU district president Stephen Smyth reportedly told the Daily Mercury that the union was concerned the criteria for selecting retrenched workers seemed to change.

A spokesperson for Thiess said the dismissal process had been transparent.

"In order to give our Collinsville team as much notice as possible, we commenced the consultation process early in November 2012 – two months prior to confirmation of final production plans and redundancy numbers," the spokesperson said.

Collinsville’s eight-pit complex 80km southwest of Bowen hit a stumbling block last year when 27 employees checked into hospital following gas-related complaints.

Coal in the 2750-hectare mine’s eight seams was determined to be prone to spontaneous combustion due to intrusions and minerals such as iron pyrites found in the surrounding geology.

The mine produces 4.5 million tonnes per annum of thermal and coking coal.