Australian miner Hillgrove Resources and Exact Mining Services have mutually terminated the mining services contract at the Kanmantoo copper mine in South Australia.

Following this, Exact Mining employees are expected to vacate the Kanmantoo site immediately upon the finalization of the agreement.

Hillgrove, meanwhile, has arranged an alternate contract to continue ore feed into the plant from run-of mine and low grade stockpiled material to maintain mill throughput, and produce copper about at about 60% to 70% of nameplate capacity, the company said.

Hillgrove managing director Greg Hall was quoted by Mining Weekly as saying that the company has secured mining services in place of ended contract at competitive price amidst current market conditions, and the general state of the industry.

"Hillgrove views this as a short-term transition to a stronger, more competitive outcome for the company and shareholders. Through this changeover process, the Kanmantoo copper mine is forecast to remain cash flow positive," added Hall.

Having commenced workforce mobilization of alternate mining contract, the company expects to resume pit mining operations in about two weeks and in around six weeks, the production will be ramped up to normal operations after it executes long-term mining service agreements.