Ukraine port closure hits exports at UK-listed Ferrexpo

Mining company issues force majeure notices telling some customers supplies have been cut off

Last modified on Fri 25 Feb 2022 07.08 EST

London-listed Ferrexpo, the world’s third largest exporter of iron ore pellets for the steel industry, has issued force majeure notices telling some customers supplies have been cut off after the port it operates from in Ukraine suspended operations.

The trading and mining company’s headquarters are in Switzerland but it operates in Ukraine, where it has three mines and a production facility, said that export facilities at the port of Pivdennyi in the south-west of Ukraine have been “temporarily suspended following notification from the port authorities”.

The company said: “As a result, the group’s marketing department has issued force majeure notices to certain customers that were due to receive the group’s products via oceangoing vessels in the near term.”

The group, which on Thursday said that the Ukrainian government had suspended rail transportation, said its mining operations near the city of Horishni Plavni in central Ukraine, were continuing to operate.

“The group has the ability to stockpile its iron ore pellets at site while Ukraine’s logistic networks continue to experience disruption,” the company said. “The group’s continued primary focus remains the safety of its workforce in Ukraine.”

Ferrexpo shares were down 2% in London on Friday morning.

The London-listed Russian mining group Evraz, in which the billionaire and Chelsea football club owner, Roman Abramovich, owns a 29% stake, warned investors of the risk of potential sanctions because of the conflict.

However, the company’s shares, which fell by a quarter on Thursday, climbed 17% in morning trading on Friday, making it the top FTSE 100 riser, after it reported an increase in profits for 2021.

“The major part of the group is based in the Russian Federation and is consequently exposed to the economic and political effects of the policies adopted by the Russian government,” the company said on Friday. “The worsening situation related to Ukraine has further increased the economic uncertainty and the risk of the imposition of sanctions.”

Evraz announced a net profit of £3.1bn for 2021, up from £858m the previous year.

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