Shares in WA mining services contractor Ausdrill plummeted in early trade on Tuesday after a project update released to the market outlined a lithium contract setback and reduced work in the Goldfields.

Ausdrill said contract negotiations for drill and blast work at Process Minerals International’s Wodgina lithium project in the Pilbara were continuing, but it now expected the value of work to be about half the previously announced $180 million over an initial three years.

Meanwhile, a rock fall at Kalgoorlie-Boulder’s Super Pit would also affect its contract at the gold mine.

Operator KCGM has already initiated a hiring freeze amid safety concerns that forced it to extend an exclusion zone around the eastern wall on the northern side of the pit after the wall slips on May 14 and 15.

Mining is being carried out on the southern side of the pit while the impact of the falls is being evaluated.

“Our scope of works has currently reduced by 35 per cent while the client reviews the longer-term mine planning,” the Ausdrill update said.

“At this stage, it is difficult to provide a definitive timeframe for the reduction and we continue to work closely with KCGM as they develop their future plans.”

In better news for the company, Ausdrill said subsidiary African Mining Services has advised operations at Hummingbird Resources’ Yanfolila gold mine in Mali were back at full capacity and development works have commenced at the Komana West deposit.

At least three people died late last month in a clash between security forces and opponents of the mining project expansion.

Hummingbird Resources said it understood the deaths occurred when a group of opponents acted to stop the company from carrying out site preparations.

AMS has a $147 million, three-year contract to provide mining services for Yanfolila.

It had expected to employ about 450 mostly local workers at the project.

Image: Kalgoorlie-Boulder's Super Pit, Kalgoorlie Miner.