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Nicholas Grove is a Morningstar journalist.

Fortescue Metals (FMG) on Tuesday said the amount of iron ore it mined in the second quarter to the end of December rose 45 per cent on the same quarter in the previous year to 16 million tonnes (mt).

Compared to the preceding September quarter, iron ore mined was up 1 per cent, Australia's third-largest iron ore miner said.

Total shipments of iron ore rose 19 per cent quarter on quarter to 14.4 mt, the company said, while ore processed rose 8 per cent to 13.8 mt.

In a note, Morningstar senior equities analyst Mathew Hodge said the shipments of 14.4 mt were slightly above of his forecast of 14 mt.

In its production report, Fortescue said its average cash costs were down 7 per cent from US$49.78 in the first quarter to US$46.43 per tonne in the second quarter.

Morningstar's Hodge said the improvement in cash costs was encouraging.

"This is better than our near-term expectations but not better than our expectations from fiscal 2014 onwards," he said.

Fortescue said the average price for iron ore delivered to China in the quarter was US$122 a tonne, which followed high volatility within global commodity markets in the early part of the December quarter.

Fortescue said it believed a range of between US$135 to US$145 a tonne is a "reasonable" price band for the forthcoming quarter.

On Monday, the iron ore miner raised the estimated resource at its North Star magnetite deposit in Western Australia to more than 2.1 billion tonnes, making it one of the largest magnetite deposits in the country.