Ferrexpo accuses Ukraine of breaching treaty obligations
By Abigail Townsend
Date: Wednesday 19 Mar 2025
(Sharecast News) - Shares in Ferrexpo were sharply lower on Wednesday, after the iron ore producer accused Ukraine of breaching international investment agreements.
The London-listed miner, which has operations in Ukraine and is headquartered in Baar, said Ukraine had breached its obligations under treaties with both the UK and Switzerland.
As a result, it had been left with "no option but to send the government of Ukraine a formal written notification of potential claims". Ferrexpo wants Ukraine to cease any unlawful actions and to enter into negotiations.
It is the latest salvo in an escalating row between the miner and the Ukrainian authorities over its largest mine.
Earlier in March, a Kyiv court approved a request by the prosecutor's office to nationalise a number of corporate entities, including 49.5% of the corporate rights of Ferrexpo Poltava Mining.
The ruling followed a probe by the State Bureau of Investigation of Ukraine, one of several state investigations against Ferrexpo.
Most relate to Konstantin Zhevago, Ferrexpo's main shareholder. The Ukrainian businessman and former politician has been sanctioned as part of a country-wide corruption crackdown. Zhevago denies all charges against him.
Ferrexpo said on Wednesday: "These actions and decision are wholly without merit. They are contrary to Ukrainian law, and the underlying legal proceedings have been riddled with procedural defects and due process violations.
"Further, there is no reasonable nexus whatsoever between these actions and decisions against the group and the supposed aim of the prosecuting cases against Konstantin Zhevago. Ferrexpo's subsidiaries in Ukraine are wholly owned by Ferrexpo; Mr Zhevago does not own any shares in those entities."
As at 0900 GMT, shares in the FTSE 250 stock were down 11% at 73p.
The update came as Ferrexpo posted full-year results. It said it had seen a "dramatic" recovery in 2024, with total production surging 66% to 6.9m tonnes and revenues ahead 43% at $933.3m.
However, lower average iron ore prices and higher production costs meant underlying earnings before interest, tax, depreciation and amortisation fell 30% to $69m. The pre-tax loss was $20.4m, although that an improvement on 2023's $68.4m.
Lucio Genovese, executive chair, said: "Through another 12 months of operating during a time of war, our people remained determined, culminating in an increase in production and sales to the highest level since the start of the full-scale invasion.
"I am very pleased and grateful that our organisation has been able to achieve such a dramatic recovery."
Looking to the current year, he added: "We are closely watching the diplomatic efforts to bring an end to the war in Ukraine and are encouraged by the progress thus far. We must, however, remain vigilant."
Ferrexpo did not provide production or cost guidance for 2025.
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