BHP, operating through subsidiary BMA, has cancelled its overburden removal contract with Downer EDI at the Goonyella Riverside coal mine.
The cancellation will take effect from 9 September, and will see approximately 427 workers let go from the operation.
Downer had four pre-strip fleets working at the site.
It comes as BHP states it will absorb more pre-strip work at its operations, with Stephen Dumble, the then BMA asset president explaining that "we are looking to increase the productivity of our own truck and shovel fleets so we can displace the need for others to move our dirt".
According to Downer this early termination of work, which was due for completion in June 2016, will have a financial impact of around $360 million on the contractor's bottom line.
However under the terms of the contract Downer will be entitled to compensation for the early termination.
Last year Downer itself cut 185 jobs at the site this time last year.
Speaking to Australian Mining at the time, a spokesperson for Downer said BMA had advised the mine service contract company they intended to absorb a quarter of pre-strip work at the mine.
“Downer have been advised that BMA will be transitioning a portion of pre-strip activity at Goonyella from contractor to owner-operator from the 1st of July,” the spokesperson said.
As part of this wider process BMA has already cut contractors from its Saraji operations.