Downer EDI (ASX:DOW) saw its shares rise upon finalising a $3 billion contract with Australian miner Fortescue Metals Group (ASX:FMG).

This comes only days after the engineering and infrastructure management services provider let go of its second CEO in three years.

Under the deal flagged in May, Downer is to supply mining services at FMG's Christmas Creek operation in the Pilbara region in Western Australia.

Downer chief executive Grant Fenn, who was appointed this week after Geoff Knox resigned, said the six-year agreement was one of the largest of its type in the country and would produce more than 650 jobs.

Downer shares climbed 3.16 per cent to $4.90, recovering some of the ground lost at the start of the week.

Christmas Creek is part of FMG's Chichester Hub, where the company intends to quickly grow production to an initial 55 million tonnes a year.

According to the engineering and infrastructure services provider, early mining works on the project would begin immediately, with first ore targeted for November 2010. Over three years, the deal will need capital expenditure of $235m.

Analysts have speculated that Downer would need to do a capital raising, although the company denied yesterday any plans of doing so.