Ukrainian miner Ferrexpo progresses in a better than expected quarter

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  • First quarter production of 2.7 million tonnes, first quarter sales of 2.6 million tonnes
  • Shares jump 10% – biggest gainer on London mid-cap index
  • Analysts say the first quarter was better than expected
  • Co is looking for other methods to deliver pellets overseas

April 8 (Reuters) – Ukrainian miner Ferrexpo (FXPO.L) said on Friday it was able to sell most of the iron ore pellets it produced in the first quarter, even though its main port was closed, which forced him to seek alternative methods of delivering to maritime markets.

Shares of the London-listed mining company, which have lost more than a third of their value this year due to the war in Ukraine, jumped 10% after the better-than-expected first quarter report.

Ferrexpo, whose operations are all in Ukraine, manufactures iron ore pellets used in the steel industry.

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Chief executive Jim North said the group delivers its pellets to European customers by rail and barge, which historically accounted for around 50% of the miner’s sales.

Ferrexpo’s operations are far from the main conflict zones, but Russia’s invasion of Ukraine, which Moscow calls a “special military operation”, has always brought operational and logistical challenges, including the closure of the port of Pivdennyi. in southwestern Ukraine.

“The situation in Ukraine remains complex (…) the group will continue to produce and transport its products as long as the capacity is in place and it remains safe to do so,” Ferrexpo said in a statement.

The miner, which primarily sells its products in Europe, the Middle East and Asia, reported iron ore pellet production of 2.7 million tonnes in the first three months of 2022, with sales during of the quarter of 2.6 million tonnes.

Ferrexpo’s production in the first quarter was 11% lower than in the previous three months.

Analysts at brokerage Peel Hunt called it a surprisingly strong first quarter and said operations and exports were in a better position than they feared.

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Reporting by Yadarisa Shabong in Bengaluru; edited by Uttaresh.V and Barbara Lewis

Our standards: The Thomson Reuters Trust Principles.

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