http://finance.ninemsn.com.au/newsbusiness/aap/...toll-treating-talksShares in Grange Resources rose after the iron ore producer said it was in talks with companies near its Savage River mine in Tasmania about possibly providing processing services.
Grange shares were up four cents, or eight per cent, at 54 cents at 1529 AEST.
Grange, which produces magnetite iron ore pellets, said the talks were being held with several companies that hold magnetite iron ore deposits in Tasmania's north-west region.
Some of these had not yet been brought into production.
"We are working together with the aim of reaching agreement to use the Savage River downstream processing and distribution infrastructure to add vale for the benefit of both Grange and the new producers," Grange said in a statement on Tuesday.
"This has the potential to increase production at Savage River by between 200,000 and 300,000 tonnes per annum of magnetite concentrate as soon as 2012."
Chief executive Russell Clark said an announcement about the progress of the talks was expected in coming weeks.
Mr Clark said charging the companies a toll to treat their ore was an option to them having to build their own costly processing infrastructure.
"I think we all realise there are synergies to be had," he told AAP.
"The specific mechanics of what would happen haven't been finalised by any means."
Grange also on Tuesday reported June quarter pellet shipments of 517,404 tonnes, up from 209,798 tonnes for the March quarter, but down from 581,357 tonnes in the June quarter of 2010.
The company was forced to feed lower grade ores through the concentrator after a rock slide last month prompted the company to bring forward remediation work on the east wall of the main pit.
Costs of pellet production doubled to $123.67 a tonne due to factors including longer ore haulage distances and additional equipment.
The company reiterated its full year production and sales target of two million tonnes.
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