Northern Iron has reported Friday that its troubled Sydvaranger iron ore project in Norway will be re-commissioned ahead of schedule as solutions that would solve the site's problems are well underway.

Northern Iron chairman David Griffith informed shareholders on the company's general meeting that "the rectification program will be completed four months ahead of schedule and the cost of the rectification program is currently tracking below budget."

The company's Norway project went online four months late last year which resulted to substantial cost overflows that forced Northern Iron to seek more equity and financing facilities but Mr Griffith took aside the encountered difficulties and said that most importantly, concentrates were eventually produced and shipped.

He admitted some shortcomings on the part of Northern Iron as the company "determined that the plant was not able to produce the quality of concentrate required at the plant's nameplate capacity."

He said that Northern Iron is allocating some $US25 million for development projects that will rectify the operational flaws identified in a previous exercise, as he added that negotiations are currently conducted with UK-based Corus to discuss the late deliveries of ores and future productions.

Mr Griffith admitted that their project is facing challenges and it had a difficult start and more issues cannot be discounted as the project continues its operations.

He expressed optimism though that the rectification program currently in place is progressing quite well and coupled with stronger iron ore prices in the market, the company is looking to much improved outcomes for the rest of 2010.

As of 1350 AEST, Northern Iron shares were trading at $1.41, which is an improvement of 1.08 percent or 1.5 cents.