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LONDON - Ferrexpo PLC (LSE: LON:FXPO), a leading iron ore pellet producer, announced its highest quarterly production since the onset of the full-scale invasion in February 2022. Despite challenging market conditions and operational adjustments, the company reported a total production of 2.1 million tonnes for the first quarter ending March 2025, a 20% increase from the previous quarter.
The production consisted of 1.3 million tonnes of pellets and 0.8 million tonnes of 67% Fe grade commercial concentrate. The latter saw a significant rise of 193% compared to the fourth quarter of 2024, largely driven by robust demand from Asian customers. However, the production of Ferrexpo’s direct reduction (DR) pellets dropped by 50% to 81k tonnes.
While the company managed to increase its total commercial production by 3% compared to the same period in the previous year, it faced a 26% reduction in total pellet production. This decline was attributed to the suspension of VAT refunds by Ukrainian tax authorities in March, impacting Ferrexpo’s liquidity and forcing the company to scale back operations to one pellet line. The suspension pertains to a sum of approximately USD 12.5 million for January 2025.
The cutback in operations has led to cost-saving measures affecting the workforce, mining and processing operations, and capital expenditure. The company emphasized the broader economic and social implications of these measures, highlighting the potential impact on the local community of Horishni Plavni, the Poltava Region, and the national economy.
Ferrexpo’s Interim Executive Chair, Lucio Genovese, remarked on the company’s resilience and adaptability in the face of adversity, while also expressing concern over sustained high input costs, such as imported electricity, and declining iron ore pellet premiums and prices.
As of the end of March, 708 Ferrexpo employees were serving in the Armed Forces of Ukraine, with 46 confirmed fatalities since February 2022. The company continues to lobby the Ukrainian government and stakeholders for the restoration of VAT refunds to maintain higher operating levels and support its workforce.
This report is based on a press release statement from Ferrexpo PLC.
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