About 250 jobs have been cut at Gina Rinehart’s Roy Hill iron ore project at Port Hedland in Western Australia.
But the company insists the termination of a multi-million dollar contract and job losses will not delay the $10 billion mine, port and rail project in the Pilbara.
Head contractor Samsung C&T has terminated a contract with subcontractor Laing O'Rourke to construct steel and mechanical, piping and electrical works for the port landside infrastructure.
The contract is believed to be worth around $200 million.
A Roy Hill spokeswoman said Laing O'Rourke workers and staff were advised of the decision to shed 150 blue collar jobs and 100 white collar jobs on Tuesday as a result of "commercial considerations".
"Samsung is ultimately responsible for delivery of the project within budget and schedule and we respect their right and ability to make this decision," the spokeswoman said.
"This change has not impacted the completion date as per the overall construction schedule."
She said construction was progressing well, with more than 74 per cent of the project complete.
Up to 150 sacked workers will be able to express interest in working on the Port Hedland project with a new sub-contractor once it is appointed.
Roy Hill's iron ore mine was recently issued two prohibition notices by Western Australia's Department of Mines and Petroleum over safety concerns after several serious incidents at the site in the past 12 months.
A Samsung spokeswoman said construction of the project is progressing well and will be completed according to the plan.
"Samsung C&T is taking all the measures for the successful delivery of the project," she said.