By Courtney Pearson

TASMANIAN miner Grange Resources has warned it may begin making redundancies due to low iron ore prices.

Grange employs between 550 and 600 workers at its Savage River magnetite mine and concentration plant 100km south west of Burnie.

Despite record production of magnetite pellets during 2015, Grange stated it was looking to cut costs.

“An optimisation strategy, which is expected to be completed early in 2016, is part of Grange’s overarching strategy to continue reducing costs, maximising margins and retaining free cash flow,” the company stated.

“Due to the continued weakness in the iron ore price and subdued pellet demand combined with the optimisation strategy, redundancies may be made.”

In its June 2015 half-year report the company stated it had recorded an $80 million loss following the write down of the value of Savage River.

Furthermore, during the September quarter the company reported the average realised price for its product was US$63.08 per tonne, compared to US$68.23/t in the previous quarter and US$103.74/t a year earlier.

Grange has been operating the mine since 2009 and supplies clients predominantly in China.