It is reported that the leading global ratings agency Fitch Ratings has assigned the long-term foreign currency issuer default rating and the short-term IDR of the UK-incorporated Ukrainian iron ore producer Ferrexpo at ‘B' with a stable outlook.

Accordingly, the ratings of Ferrexpo reflect its significant iron ore reserves and mine development plans which are forecast to result in a more than 50 percent increase in production volumes over the next five years.

Fitch noted that from a cost perspective Ferrexpo production and distribution cash costs are in line with the global average for iron ore pellets of around USD 50 per tonne in FY 2009. The ratings also incorporate the expectation that Ferrexpo will maintain a moderately leveraged financial profile over the next three to four years, despite its large investment program and the inherent cyclicality of the mining industry.

Rating constraints include Ferrexpo limited scale of operations and commodity diversification. As over half of its sales are to three customers, Ferrexpo faces the risk of being materially affected by deterioration in the performance of these customers.

(Sourced from www.steelorbis.com)
Visit www.steelorbis.com for more