Swiss-headquartered miner Ferrexpo, whose main interests are in Ukrainian iron ore assets, has released its logistic and operational update for the January-May period this year.
In the given period, the company’s iron ore pellet production decreased by eight percent year on year to 4.4 million mt. Ferrexpo’s iron ore inventories increased by 400,000 mt in the March-May period due to logistical restrictions, and the company will look to reduce its inventories as logistical constraints ease over time.
According to the company’s statement, Ukraine’s Black Sea ports remain closed and the company has had to divert its iron ore pellets sales to European markets via Ukraine’s diverse railway network and barging operations. Russia’s invasion of Ukraine has resulted in periodic disruptions to the railway network across the country, amid the damage to the railway network following Russian air strikes. The company has recently been notified of further infrastructure damage as a result of a Russian missile strike in southwest Ukraine, which has reduced Ferrexpo’s ability to use its barging operations.
As a result of the damage to infrastructure and the increase in inventories of iron ore pellets referenced above, the company will lower production for a period of time, until an alternative logistics route is agreed, damaged infrastructure is reopened, or Ukraine’s Black Sea ports resume activities.
In addition, the company will continue to operate between one and three of its four pelletizer lines for pellet production, meeting accessible demand in European and seaborne markets.