The Age reported that BHP Billiton is speeding up the modernization of its Pilbara iron ore division with efforts to reduce spending on contractors coinciding with the launch of a high tech remote operating center in Perth.

Mr Jimmy Wilson chief of BHP's iron ore will open the integrated remote operating centre with WA Premier Mr Colin Barnett starting an era in which much of the mining and logistics work in the Pilbara will be done from Perth.

The project is designed to keep pace with Rio Tinto, which operates a similar multimillion dollar set up at Perth Airport. Roy Hill Holdings is also developing one for its USD 10 billion iron ore mine, port and rail project.

Investors will closely watch Mr Wilson's comments for any guidance on iron ore production with the company trying to meet its target of producing 183 million tonnes in the 2013 financial year.

Mr Wilson is likely to be quizzed about the future of contractors on BHP's Pilbara mines, after renewed reports that the company is seeking to bring some contracting work in house. That has become a trend in Australia's coal sector with BHP, Xstrata and others doing so in a bid to lower costs.

Mr Wilson said last week that equipment supplies were cheaper now than during the peak of the mining boom and there is now growing suspicion that BHP wants to spread the in-housing trend from its coal division to iron ore. The trend is just another blow for mining services companies, which are suffering under the new era of austerity. Profit downgrades have already been announced by Worley Parsons, UGL, Transfield Services, Calibre and Ausdrill and on Monday drilling contractor Boart Longyear issued its second profit warning in two months.