By KYIV. Jan 11 (Interfax-Ukraine) – Mining company Ferrexpo Plc with assets in Ukraine produced 6.053 million tonnes of pellets in 2022, which is 46% less than in 2021, reflecting operational and logistical constraints throughout 2022 due to the war in Ukraine.
According to the company’s exchange announcement on Thursday, pellet production in the fourth quarter of 2022 decreased by 86% compared to the fourth quarter of 2021, and by 50% by September-December 2022, to 417,000 tonnes.
In 2022, premium pellets output grading 65% Fe or above amounted to 5.7 million tonnes (a decrease of 47%), including 417,000 tonnes in the fourth quarter (a decrease of 28% compared to the previous quarter and 86% compared to the same period previous year). The higher grade Direct Reduction (DR) Pellets (67% Fe) last year amounted to 353,000 tonnes (a drop of 18% compared to 2021), which was not produced in the fourth quarter of 2022.
No pellets grading 62% Fe were produced in 2022.
At the same time, the total commercial production (pellets and commercial concentrate) in 2022 fell by 46%, to 6.177 million tonnes, in the fourth quarter compared to the third – by 49%, and compared to fourth quarter of 2021 – by 85%, to 457,000 tonnes. The output of commercial concentrate in 2022 dropped by 47%, to 124,000 tonnes, including in the fourth quarter 2022 – 40,000 tonnes (a decrease of 38% compared to the previous quarter, and an increase of 3% compared to the same period of the previous of the year).
The decrease in pellet production in the fourth quarter of 2022 was primarily due to the loss of electrical power for the majority of the quarter, which was partially restored in late December, in addition to existing constraints relating to Russia’s invasion. As of the date of this release, the group continues to produce iron ore pellets using one pelletiser line (out of a total of four).
Operations continue to focus on the production of high grade forms of iron ore, with 100% of output grading 65% Fe or above in 4Q 2022.
Given recent operational disruptions, the Group elected to reduce output of higher grade DR Pellets (67% Fe) during the period. DR pellets represented 6% of total pellet production in 2022 (2021: 4%), and the Group expects to continue to increase its focus on this particular product in the coming year.
Despite interruptions to the Group’s production during 4Q 2022, shipments to customers continued as planned at approximately the same run rate as seen in the previous quarter of 2022.
Total full year sales of 6.2 million tonnes in 2022, representing a 46% decrease year on year due to the ongoing war in Ukraine, principally relating to the closure of Ukraine’s access to the Black Sea, Russian attacks on Ukraine’s state-owned electricity network and logistics constraints for users of Ukraine’s railway network, in addition to other factors.
Full year production of commercial concentrate of 124,000 tonnes, representing 2% of total iron ore output in 2022 (2021: 2%), providing an additional product in the group’s marketing portfolio.
According to the press release, non-executive director Kostiantyn Zhevaho resigned in December 2022.
Group net cash position, subject to minor final year-end adjustments, of approximately $105 million as of 31 December 2022 (31 December 2021: $117 million), with minimal lease obligations and no debt.
Ferrexpo CEO Jim North noted in his commentary that 2022 has been an exceptionally difficult year for anyone connected to Ukraine.
"After more than 320 days of conflict, however, Ukraine continues to successfully defend itself. At Ferrexpo, our operating and marketing teams have remained resilient throughout the war, and we remain committed to supporting the people of Ukraine through our continued operations and investments," North said.
He said that full year pellet production of 6.1 million tonnes reflects both the determination of our workforce, and the strong and supportive relationships that the group has with its stakeholders, such as its global customer network and local government.
"We hope that the coming year will bring peace, and we look forward to being a part of the process to deliver a new future for our people, their families and communities across Ukraine," North said.
As reported, Ferrexpo owns a 100% stake in Yeristovo Mining LLC and a 99.9% stake in Belanovo Mining LLC. Prior to the court decision in September 2022, Ferrexpo also owned 100% of the shares of PJSC Poltava Mining.
