Grange Faces Pricing Headwinds Despite Operational Gains and Financing Progress

Operational Excellence and Safety

Grange Resources Limited (ASX, GRR) has delivered a strong operational performance for the quarter ended 30 June 2025, underscored by an outstanding safety record at its Savage River mine in Tasmania. The company proudly reported no Lost Time Injuries (LTIs) during the quarter, extending its LTI-free streak to over 800 days, a testament to its rigorous safety culture and operational discipline.

The Savage River operations saw a notable increase in production volumes, with concentrate output rising to 520,000 tonnes and pellet production surging to 607,000 tonnes, a 32% increase from the previous quarter. This uplift was driven by running four furnaces to reduce concentrate stockpiles and the development of new ore zones at Centre Pit, which also supported higher mining rates.

Cost Management Amid Increased Activity

Despite the accelerated waste stripping campaign at Centre Pit, which temporarily pushed C1 unit costs higher, Grange managed to keep overall operating costs below budget. The waste stripping, costing approximately A$9.1 million, was a strategic investment to access higher-grade ore, expected to enhance production and reduce costs in the latter half of 2025. June’s C1 unit costs fell significantly to A$161.65 per tonne, down from the quarterly average of A$182.32 per tonne, signaling a return to more efficient operations.

Additional factors influencing costs included scheduled maintenance brought forward and elevated energy prices, yet these were managed within the company’s financial framework. Grange forecasts that as mining transitions fully into the ore lens at Centre Pit, the strip ratio will decline and concentrate production will increase, further improving cost metrics.

Market Conditions and Pricing Dynamics

Grange’s pellet sales volume rose 35% to 573,000 tonnes, reflecting strong demand for its high-grade, low-impurity pellets. However, pricing was impacted by weaker steel market conditions during the quarter, with the average realised pellet price falling to US$105.30 per tonne (A$164.32 per tonne) from US$124.15 per tonne (A$198.01 per tonne) in the prior quarter. Encouragingly, steel prices have strengthened in July, and Grange continues to maintain value-in-use premiums above benchmark indices, underscoring the quality and market appeal of its product.

Advancing Growth Projects and Strategic Initiatives

On the development front, financing for the North Pit Underground project is progressing well, with Grange receiving strong expressions of interest from both domestic and international lenders. The company is actively engaging with these parties as due diligence advances, aiming to secure funding that will underpin future production growth.

Meanwhile, the Southdown Magnetite Project in Western Australia remains a strategic priority. Grange is continuing discussions with potential partners to advance the project, maintaining all tenements and approvals in good standing. A bridging study phase is planned to refine the project scope once partners are onboarded, setting the stage for final environmental approvals.

Commitment to Community and Inclusion

Reflecting its broader corporate responsibility, Grange announced the official endorsement of its first Reconciliation Action Plan (RAP) by Reconciliation Australia. This milestone highlights the company’s commitment to fostering respectful and inclusive relationships with Indigenous communities in Northwest Tasmania, where over 12% of the population identifies as Aboriginal or Torres Strait Islander. The RAP aligns with Grange’s core values of respect, accountability, and inclusivity.