Engineering firm Downer EDI Limited has received a contract to provide mining services for Karara Iron Ore Project in Western Australia.

The six-year magnetite mining contract, worth $570m, has been awarded by Karara Mining Limited (KML).

Downer will establish the mine infrastructure and provide services including drill and blast, and load and haul of waste and ore.

KML is an incorporated joint venture between Gindalbie Metals Limited and Anshan Iron & Steel Group Corporation (AnSteel).

The Karara project will require new capital expenditure totalling $92m and will be funded initially through operating cash flow and new finance as well as operating leases.

The capital expenditure required for the project will be approximately $41m in 2012.

Downer chief executive officer Grant Fenn said the contract would roll out the company’s exposure to the expanding iron ore sector and also upgrade its geographical presence in Western Australia.

"We look forward to working with Karara Mining over the next six years to deliver this critical component of the Karara Iron Ore Project," Fenn said.