Ferrexpo has restarted iron ore pellet production in Ukraine after securing approximately €86 million through a capital raise, with the London-listed mining company shifting a larger portion of its sales toward European customers amid continued disruption to Black Sea logistics.
The restart represents a partial recovery of production, with one pelletiser line now operating. Ferrexpo’s operations have faced repeated interruptions caused by infrastructure damage, power constraints and transport disruptions associated with the war in Ukraine.
European Markets Become a Greater Sales Focus
Continued attacks affecting Black Sea ports and shipping are prompting Ferrexpo to place greater emphasis on European markets. The company can use rail and Danube-linked transport routes as alternatives for moving production to customers. The change increases the importance of European destinations for Ferrexpo as maritime logistics through the Black Sea remain disrupted. The company’s ability to increase production will depend on the availability of electricity, railway capacity and the security of Ukraine’s logistics infrastructure.
Ferrexpo produces higher-grade iron ore pellets, which can reduce coke consumption and emissions compared with lower-grade blast furnace feed. The material is also increasingly relevant to steelmaking processes aimed at reducing carbon emissions.
€86 Million Capital Raise Supports Restart
The production restart follows a capital raise of approximately €86 million, providing Ferrexpo with additional liquidity for operations and working capital. The financing represents corporate funding rather than support from the European Union or European institutional project-financing programmes.
For European steelmakers, the resumption of Ukrainian pellet production provides an additional source of premium iron ore feedstock located relatively close to EU markets. Higher-grade materials are being sought by steel producers pursuing lower-emission production and seeking to reduce reliance on longer-distance seaborne supply.
