It is reported that Grange Resources is considering selling part of its stake in the Southdown iron ore project in Western Australia to help fund the proposed AUD 2.57 billion export venture.

Mr Russell Clark Chief executive said that if necessary, the Perth based company would also sell part of Savage River, its already functioning iron ore mine in Tasmania. Grange owns 70% of Southdown and Japan Sojitz holds the remainder.

The mine is expected to start operating in 2014 and produce 10 million tonnes of magnetite annually for at least 19 years.

Magnetite is a type of low-grade iron ore used to develop steel-making pellets, and is more expensive to produce than the conventional high grade variant. Sources said Sojitz is also in talks to sell part of its 30% stake in Southdown to help share development costs.

Mr Clark said "We recognize it's a big project and we're not a big company. By selling down part of Southdown up to 30% perhaps, you immediately reduce your debt and equity requirements by that amount."

He said that there was no formal asset sale process under way at present, with the company likely to need most of next year to bed down Southdown's debt component because of Europe's rocky credit markets.

He added that "I still believe the bulk of the funding will come out of Japan and China."

Grange said in October that Standard Chartered Bank had been appointed to advise on its debt requirements.

(Sourced from www.theaustralian.com.au)