Swiss-headquartered miner Ferrexpo, whose main interests are in Ukrainian iron ore assets, has announced that a crew member lost their life after a vessel carrying the company's products was struck by Russian drones in the Black Sea, adding that the incident has disrupted its export operations and negatively affected its liquidity position.
The company stated that the vessel, which was transporting its direct reduction-grade (DR-grade) pellets to customers in the Middle East, was damaged while sailing in Ukrainian waters of the Black Sea. According to Ferrexpo, the crew was rescued, but one crew member was killed. The vessel remains afloat, although the condition of both the cargo and the vessel has not yet been determined. Salvage efforts are being considered but remain difficult under current conditions.
Company suspends Black Sea export shipments
Ferrexpo currently has approximately 189,000 mt of pellets designated for shipment, including 55,000 mt of DR-grade pellets loaded on the affected vessel and around 90,000 mt of DR-grade pellets held in stockpiles. The production and delivery cost of this inventory is estimated at approximately $20 million.
The company stated that continuing drone and missile attacks in and around Ukrainian ports, as well as on vessels departing those ports, have prompted shipowners to cancel vessel bookings. As a result, Ferrexpo does not expect to load additional vessels through the Black Sea export route for the foreseeable future. The company also confirmed that it has notified its insurers and is pursuing claims under its existing insurance coverage.
Liquidity affected by export disruption
Ferrexpo said the disruption has had a material adverse impact on its liquidity. The company now expects to have sufficient accessible net cash to continue operating until the end of August 2026. According to the company, this forecast remains subject to iron ore price volatility, operating costs, including energy expenses, the resolution of the issues related to the vessel incident, and other previously disclosed risks, including the planned fundraising, the suspension of VAT refunds and the ongoing legal proceedings involving Ferrexpo Poltava Mining.
The company added that its board is evaluating a range of operational and financial measures to mitigate the impact of the disruption and will provide further updates as appropriate.
