It is reported that Iron ore pellet producer Grange Resources has forecast a lift in full year output by as much as 15% because of better conditions at its Savage River mine in Tasmania.

Grange reported production for the 2011 calendar year of two million tonnes representing a rebound in output following a rock slide at the mine in mid-2010.

Mr Russell Clark Chief executive said the recommencement of mining in the North Pit at Save River had increased ore grades, resulting in greater production and a reduction in costs that were now sustainable.

He said December quarter production was at the highest level in the past 15 months. He added that "We are expecting production to be up to 15 per cent higher in 2012 due to improved mining conditions."

Mr Clark said it had stretched out the period for its existing sales contract with BlueScope by six months to December 31 and was confident the steel maker would take up its full contracted amount before the end of the year.

He said that thereafter, Grange majority owner, China Shagang International would replace BlueScope as the miner customer. He added that "Introducing a third partner would be the smart thing to do."

Mr Clark said the project would be 60% debt funded. And although debt markets were tight, Mr Clark said he was confident that Chinese, Japanese and Western banks would back it.

He said that "If you need to raise money on the market, which is probably the last thing we'd look at, you can do that as well."

(Sourced from thewest.com.au)