Australian mining firm Grange Resources Ltd said on Monday that it has sealed a considerable pricing agreement with BlueScope Steel Ltd for its magnetite iron ore pellets from the company's Tasmanian mining site and deliverable within the September quarter.

Grange said that BlueScope has agreed to a $US150 per dry metric tonne pricing proposal for iron ore pellets to be sourced from Grange's Port Latta within the next three months and commencing in July.

Company chief executive Russell Clark said that the interim price is reflective of a 107 percent increase from the previous annual iron ore pellet benchmark price, which also pointed to the spikes in spot iron prices seen since March of this year.

Mr Clark added that Grange is in current discussion with BlueScope to develop a new pricing mechanism that should be in effect for the next two years of their contract agreement, stressing that "the agreement on an interim price guarantees enhanced revenue while we finalise the new pricing mechanism."

Grange has been resorting to quarterly negotiations of its index-based with its key clients, with BlueScope and China's Jiangsu Shagang Group Co Ltd among them, ever since Australia's mining giants opted out of the 40-year old annual iron ore pricing system in April.

The company revealed that its pricing discussions for with Shagang has been formalised as it added that "Grange continues negotiations with BlueScope to secure a similar ongoing pricing methodology."

Granges currently averages an output of 2.3 million tonnes per annum of iron ore pellets from its Savage River mine southwest of Burnie in Tasmania while at the same time exploring the Southdown magnetite iron ore mine site at Albany in Western Australia.

As of 1450 AEST on Monday, Grange stocks were trading at 51 cents, rising by 1.5 cents or 3.03 percent while BlueScope shares were trading at $2.23, gaining by four cents or 1.83 percent from Friday's closing.