Brazil's Samarco Mineracao S.A. is to restart production at a second pellet unit by the end of June, the company told Dow Jones Newswires in an interview Thursday.

"We're working with a more positive scenario in the second half of the year," said Luiz Ricardo Cunha Melo, Samarco's general manager for sales and logistics.

Samarco is jointly owned by Brazilian mining giant Vale S.A. (VALE) and its global competitor, Australia's BHP Billiton Ltd. (BHP).

Samarco has been operating just one of its three pellet units since November, its most modern facility, with 7.6 million metric tons a year capacity.

According to Melo, this unit has been working at full capacity.

The other two units each have 7 million ton capacity.

Despite the signing of three contracts in the past week at the new annual reference price, and the second unit restart news, Melo maintained Samarco's forecast of 14 million ton pellet sales in 2009.

The three contracts were signed with Indonesia's Krakatau, Malaysia's Lion Group and Trinidad and Tobago's Nu-Iron.

The new price is approximately $84 per metric ton, 48.3% lower than the 2008 price, Samarco said.

Samarco's Ubu plant in Espirito Santo State, southeastern Brazil, has 21.6 million tons total capacity.

Melo said Samarco exports all its production and has between 10 and 15 clients each with demand over one million tons a year.

However, he pointed out that owing to the global crisis and accumulated stocks, some clients would not necessarily take their full amounts this year and may transfer the remainder to next year.

Melo said he believed the signing of the new reference price contracts would lead to more deals "in the next few days and weeks."

-By John Kolodziejski, Dow Jones Newswires; 55-21-2586-6086; John.Kolodziejski@dowjones.com