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Leighton Holdings Limited’s (ASX:LEI) order book will suffer a $260 million hit after BHP Billiton Limited’s (ASX:BHP) Mitsubishi Alliance terminated a contract ahead of schedule.
Leighton’s subsidiary Leighton Contractors will now stop mining operations at the global mining giant’s Peak Downs coal mine in Queensland.
Leighton Contractors started working at Peak Downs in 2003 and was expected to continue until 2015 but will now cease working on July 3, 2013.
Leighton has advised it will be entitled to compensation for early termination but has not disclosed the expected amount.
The company has however affirmed its bullish outlook for thermal and coking coal which it expects to support ongoing demand for its services.
Leighton Holdings generated a net profit of $442 million in the 2012 financial year.
