Fortescue Metals (ASX: FMG), Australia's third-biggest iron ore miner, says its ore shipments jumped 9 percent in the December quarter from a year earlier as it continues with its expansion plans in Australia.

The company said in its quarterly report, its total direct cash costs per tonne were also up in the quarter -- by 19 percent to $41.50 a tonne - partly because of a stronger Australian dollar versus the greenback. The Australian dollar reached and exceeded parity with the U.S. dollar during the December quarter for the first time since floating in 1983.

"The increase in operating costs will continue to be impacted by the high AUD/USD exchange rate, however, it should be noted that the higher Australian dollar is being driven by higher commodity prices,'' Fortescue said.

Despite the rising costs, the company generated strong operating margins due to high iron ore prices. Fortescue's cash position at the end of December was $US2.37 billion, up $US1 billion from the previous quarter.

According to the Perth-based company, the ramp up of Christmas Creek would continue until operations stabilise at the 55 Mt per annum rate targeted in the June quarter of this year.

It also said it expects to broaden its customer base outside China and is in talks to sign up a new customer in South Korea.

At 11am Perth time, shares in Fortescue were trading up 28 cents at $7.01, giving Andrew "Twiggy" Forrest a paper gain of about $270 million and valuing his shareholding at about $6.8 billion.