Ferrexpo's Resilience: Navigating Challenge in Iron Ore Production

FerrexpoImage Source: Ferrexpo


In 2023, Ferrexpo, a mining company with Ukrainian assets, faced a 36.5% decline in iron ore pellet production, producing 3.845 million metric tons, citing reduced export capacity and logistical challenges. Despite a workforce retention strategy, production cuts and increased logistics costs impacted margins. However, signs of rising pellet demand in Europe and a 20% increase in iron ore prices offer optimism. With a net cash position of approximately $109 million, Ferrexpo anticipates a positive trajectory in the coming year.


Ferrexpo plc, a prominent mining company operating in Ukraine, weathered a challenging year in 2023, marked by a significant dip in iron ore pellet production. The company reported a production of 3.845 million metric tons, marking a notable 36.5% decrease from the 6.053 million tons recorded in 2022.

During Q4, pellet production experienced a halving compared to Q3 of 2023, yet it demonstrated a resilient 50.4% increase from the same quarter in the previous year, according to statements quoted in Ukrainian media.

Ferrexpo's focus in 2023 centered on producing pellets exclusively with 65% Fe content. Lucio Genovese, Ferrexpo's Interim Executive Chair, commented on the challenging operational landscape, stating, "Even with winter setting in, we have been able to operate one, sometimes two, of our four pellet lines, to match the reduced export capacity available to us, and continue supplying premium products to our premium customers."

Despite the production challenges, Ferrexpo prioritized retaining the majority of its workforce. However, reduced production, logistical complexities, and heightened logistics costs due to limitations in accessing Black Sea export routes impacted profit margins.

The company experienced a positive turn as shipping resumed from certain ports, coupled with a notable 20% increase in iron ore prices during the final quarter of the year, a trend that continued into the New Year.

Genovese expressed optimism, citing early signs of an uptick in pellet demand in Europe. He stated, "These factors combined could be supportive of our large fixed cost base and higher logistics costs. In my opinion, improved demand and higher prices bode well for the year ahead for Ferrexpo."

As of December 31, 2023, Ferrexpo reported a net cash position of approximately $109 million, reflecting a slight increase from the previous year's $106 million, with minimal lease obligations and no outstanding debt.

Ferrexpo's asset portfolio includes 100% ownership of Yeristovo Mining and Poltava Mining, and a 99.9% stake in Belanovo Mining.


Ferrexpo's journey through 2023 underscores its resilience in confronting challenges within the iron ore industry. The company's strategic focus on premium product supply, workforce retention efforts, and adaptability to reduced export capacities position it for potential success. Optimism arises from signs of increased pellet demand in Europe and a positive trajectory in iron ore prices, providing a hopeful outlook for Ferrexpo in the upcoming year.

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