Grange Resources Ltd (ASX: GRR, OTC: GRRLF) has cut its interim dividend to AUD0.01 per share from AUD0.02 a year ago. This is a second significant strike–as we reported in the Jul. 27 Down Under Digest the managing director of the company unexpectedly resigned for “personal reasons,” effective immediately–on a recommendation and Portfolio addition that’s proven to be egregiously bad, in timing at the very least if not completely in substance.

According to management, “The reduced dividend amount provides [Grange] with additional time to assess the business impact of recent reductions in the global price for iron ore, softening demand for iron ore from China and confirm the impact of re-sequencing of the Life of Mine Plan following the rock slide on the eastern wall of the North Pit in July 2012.”

Grange had also announced the occurrence of a rock slide on the eastern wall of the North Pit at its Savage River mine site on Jul. 18. Geotechnical controls in place at the site highlighted the potential for a partial wall failure and, as a precaution Grange had removed personnel and equipment ahead of the event. Management noted that no personnel were exposed and no injuries were sustained and that resources were redeployed to alternate locations at the mine. Production was maintained at planned levels. “At this stage,” management said in a statement, “the slip is not expected to have a material adverse effect on the operation and it is anticipated that the 2012 production target is not materially at risk.”

We’ll consider the rock slide a foul ball, as it appears no financial damage will accrue. But we won’t wait around for the proverbial “strike three,” however, after the abrupt management change and the dividend cut for a company already with a limited payout history. Sell Grange Resources.

Given the uncertain environment for iron ore pricing amid a continuing Chinese slowdown, I’m no longer comfortable maintaining exposure to a resource company that lacks the diversification of a BHP Billiton Ltd (ASX: BHP, NYSE: BHP) or a Rio Tinto Ltd (ASX: RIO, NYSE: RIO).

Operationally the company appears to have a compelling future. Its primary output is a specialized segment of the market; Grange’s pellets are more efficient than the other forms of iron ore, lumps and fines, the use of which will actually decline over coming decades as global resources decline, even as China’s urbanization continues.

But the concern I noted in the July 2012 Sector Spotlight in which I introduced the stock to the Portfolio about its already sparse dividend history has only increased with this latest reduction.

Grange reported net profit after tax (NPAT) of AUD55.4 million for the six months ended Jun. 30, 2012, down from AUD58 million for the prior six-month period. Magnetite pellet sales of 1.2 million metric ton were up from 700,000 in the first half of 2011, but revenue from mining operations declined 7 percent to AUD193.6 million from AUD208.9 million. The average pellet price received was USD162.84 per metric ton, still a premium to spot prices for regular iron fines but down from USD221.57 per ounce a year ago. Lower pellet prices were offset by below-budget costs and a weaker Australian dollar-US dollar exchange rate on sales.

Grange produced 1.18 million tons of concentrate, up from 851,076 tons in the prior corresponding period. Pellet production also increased, to 1,097,080 tons from 840,018 in the six months to June 2011.

In a statement announcing results Grange noted that Phase 1 of its East Wall remediation work at Savage River was completed during the half year, with access to the main ore zone of the North Pit re-established during the fourth quarter of 2011.

New Managing Director Richard Mehan said that reestablishing this access resulted in cash costs of AUD102.66 per ton of pellets produced, a 22.5 percent improvement from the preceding half year, owing to improved ore grades and consequent concentrate and pellet production.

The rock slide in July brought forward part of the Phase 2 remediation work for the East Wall. This remediation work was scheduled to be completed as part of the 2015 operating plan and was now being rescheduled into the 2013 operating plan.

Mr. Mehan noted that this would require ore to be sourced from other deposits on the mine site on several occasions during the remediation work. It was expected that the redesign and rescheduling plans would be finalized by early September.

Following are dates (confirmed, tentative or estimated) for AE Portfolio earnings announcements. Where companies have reported recently, we’ve included a link to our discussion and analysis of results.