Fortescue Metals Group has scrapped a $650 million contract with Downer EDI in a bid to cut costs as it moves to a full owner-operator model at Christmas Creek.

Perth-based Fortescue did not say whether employees from Downer would move across to the company when the current mining services contract ends on September 30. But the company is aiming to minimise the impact on contractors and employees following a slump in iron ore prices. Downer EDI shares fell almost…