Published by Global Banking & Finance Review®
Posted on April 7, 2025
2 min readLast updated: January 24, 2026
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Ferrexpo's Q1 iron ore production dropped 26% due to halted VAT refunds in Ukraine, affecting liquidity and operations.
(Reuters) -Ukraine-focused miner Ferrexpo reported a 26% drop in first-quarter iron ore pellet production on Monday, as a suspension of its VAT refunds in the country cut liquidity and forced it to scale back operations.
Shares in the London-listed company pared some earlier losses to trade 4.9% lower at 45.5 pence by 0910 GMT, amid a global market rout in the wake of drastic U.S. tariffs.
"The environment in which we are operating has become increasingly challenging," Interim Executive Chair Lucio Genovese said, citing lower funds and "significant" cost-cutting measures across the business.
Last month, the miner said Ukrainian tax authorities suspended its VAT refund worth 512.9 million hryvnias ($12.5 million) due to sanctions on billionaire Kostiantyn Zhevago.
Zhevago is one of three beneficiaries of a trust that owns Fevamotinico S.a.r.l., which in turn owns 49.3% of Ferrexpo. The company had said the sanctions were not imposed directly on it or its units.
"We continue to make representations to the Ukrainian government and other stakeholders to restore the refund of VAT," Genovese added.
Ferrexpo said it could only operate one pellet line during the quarter, leading production to fall to 1.35 million metric tons in the three months to March 31 from 1.81 million tons a year ago.
Total commercial production, which also includes iron ore concentrate, grew 20% quarter-on-quarter to 2.13 million tonnes, its highest quarterly output since the beginning of the war in Ukraine.
However, this did not translate into improved earnings due to high input costs, particularly imported electricity, and deteriorating iron ore prices, the company said.
"Ferrexpo is dealing with the triple threat of lower iron ore prices, higher operating costs and repeated legal challenges," Panmure Liberum analysts said in a note, adding that they expect the VAT refunds to be reinstated later this year.
($1 = 41.1000 hryvnias)
(Reporting by Shashwat Awasthi in Bengaluru; Editing by Mrigank Dhaniwala, Nivedita Bhattacharjee, Louise Heavens and David Evans)
The main topic is Ferrexpo's 26% drop in iron ore production due to VAT refund suspension in Ukraine.
Production dropped due to liquidity issues from the suspension of VAT refunds in Ukraine.
Analysts expect the VAT refunds to be reinstated later this year.
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