Forge axes CEO David Simpson after loss of Horizon Power contract

Forge chief executive David Simpson is believed to have been made redundant from the failed mining services company, joining thousands of rank-and-file workers who have lost their jobs in the wake of its slide into administration.

Mr Simpson’s exit in recent days came as Forge lost one of its two remaining contracts over the weekend; the $125 million deal with Horizon Power to build a new power station at South Hedland in Western Australia.

That leaves Forge holding just one contract – to build the Diamantina power station in Queensland – and there was speculation last night that it could be gone within days, too.

The loss of Horizon has seen a further 70 Forge workers lose their jobs, adding to the estimated 1400 to have already been let go.

Last week Forge employees who were working on power stations and mining projects in Western Australia and Queensland were retrenched after the principals of the construction jobs exercised contractual rights they claimed on the projects.

Their retrenchment followed Forge’s financiers withdrawing support for the company earlier last week, with KordaMentha Restructuring appointed receiver and manager, after Forge appointed Ferrier Hodgson as the voluntary administrators.

Still, it is hoped that many of the retrenched employees will find work quickly, and it appears that about 50 former Forge employees working on Gina Rinehart’s Roy Hill project will be rehired within days.

Forge and Spanish company Duro Felguera won a $1.47 billion contract to build a processing plant at Roy Hill in December, but Forge’s slide into administration last week has cast doubt over the future of that work, and the jobs of the Forge employees.

Skilled Group spokeswoman Delphine Cassidy said on Monday the company would take on more than 50 of the former Forge employees that were working on Roy Hill, as part of efforts to ensure the contract was not compromised.

The hiring is expected to be an interim measure until a reworking of the contract – which is Duro Felguera’s first in Australia – is completed.

Roy Hill spokesman Darryl Hockey said the Forge failure would not have a major impact on the scheduled completion date of the $US10 billion mine, port and rail project.

”Continuity of construction is important to the Roy Hill project. The key contractors are moving to get things back on track very quickly,” he said.

”We are confident our long-term interests have not been unduly impacted.”

Roy Hill is a joint venture between Ms Rinehart’s Hancock Prospecting, Korean steelmaker Posco, China Steel Corporation and Japanese company Marubeni.