The company shipped 3.13Mt for the quarter, up 400,000 tonnes on the previous quarter, with the new higher capacity shiploader at the inner harbour at Whyalla achieving its design rate of 4200 tonnes per hour in its first week of operation in July.

Railed tonnes of 3.3Mt were a record after Arrium commissioned new locomotives and wagons.

Arrium spent $A600 million to double the capacity of its iron ore business to around 13Mt per annum.

It said the run-rate supported its full-year guidance of 12Mt.

Average cash cost loaded on the ship but excluding royalties and depreciation was around $49 per wet metric tonne, in line with guidance of $50/wmt.

The average realised price for the quarter was $US113/t free on board, up $9/t on the previous quarter.

Arrium is progressing the $A82 million Iron Knob development, which is on budget and on schedule for first ore in the second half of next year.

“In addition to its hematite iron ore stream, the business is progressing well with its magnetite optimisation work designed to deliver an additional 400,000t per annum of magnetite ore products, as well as providing other benefits such as reduced mining activity and related cash outlays,” Arrium chairman Peter Smedley told the company’s annual general meeting today.

“This work includes the installation of a tertiary grinder and modifications to the grinding circuit. We expect the benefits of this project to commence in the second half.

“In relation to prices, continued strong demand from China is expected to underpin solid average iron ore prices over the balance of this financial year, particularly given the outlook for a sustained lower Australian dollar.”

Shares in Arrium jumped 6.6% or 10c to $1.62, making it one of the standouts today among the S&P/ASX 200.