Contractor Macmahon Holdings has run the last remaining contractor site, Orebody 18 just outside Newman, since January 2007.

Macmahon said it would work with BHP during the transition phase, adding that around 200 employees worked at Orebody 18, with the majority to be relocated to other company sites.

The move by BHP to owner-operator started in 2011 with the acquisition of Leighton Holdings subsidiary HWE Mining for $A705 million.

At the time, BHP said the deal was about addressing its biggest challenges – costs, safety and the skills shortage.

The Yarrie mine was transitioned to owner-operator last year.

“We are committed to the safe, effective and efficient transfer of the Orebody 18 operation to BHP Billiton and we will work closely with Macmahon to ensure this happens,” BHP Billiton Iron Ore president Jimmy Wilson said.

“Excess trucks and shovels made available due to improved productivity at our other mining operations will be used at Orebody 18, resulting in no additional truck and shovel purchases required to operate the site.”

Production at the Yarrie mine, part of BHP’s 85%-owned Goldsworthy joint venture, would be indefinitely suspended, the company said.

“As an additional productivity measure for the iron ore business, we have made the decision to suspend production at our Yarrie operation until further notice,” Wilson said.

“We will redeploy Yarrie employees to our Jimblebar operation – which will manage Orebody 18 – and other areas of the business wherever possible.”

The Goldsworthy JV is the smallest contributor to BHP’s Pilbara iron ore production, delivering just 630,000 tonnes in the six months to December 31.

Shares in BHP last traded 0.8% lower at $39.065.