Ferrexpo (LSE:FXPO), the Swiss-headquartered iron ore producer with mining and pelletising operations in Ukraine, reported total commercial production of 779,975 tonnes for the third quarter, down 19% from 963,409 tonnes in the second quarter.
Tight liquidity, constrained logistics capacity and the temporary suspension of production drove the decline, the company said.
Total pellet production fell 24% quarter-on-quarter to 656,650 tonnes, while output of higher-value DR pellets dropped 13% to 141,220 tonnes.
Ferrexpo had halted mining and pelletising operations in August to preserve working capital, a step it took after disruption to Black Sea export logistics followed a drone strike on a chartered vessel carrying its cargo, in which a crew member died. The company restarted one pellet line in September following a weekend site mobilisation, funded in part by proceeds from the $100m equity raise it completed that month.
"Due to the temporary suspension of production in August and the ramp-up to one pellet line in September, total production for the quarter was just shy of 800,000 tonnes," said Lucio Genovese, interim executive chair.
For the nine months to the end of September, total commercial production stood at 2.34m tonnes, down 54% against the same period last year, with DR pellet volumes up 272% year-on-year as the company maintained the higher-value grade's share of its product mix.
Ferrexpo said it remains in advanced negotiations with a trade finance provider over a secured facility, though the timing of definitive documents has been affected by the ongoing Black Sea logistics disruption and the resulting impact on its ability to deliver shipments under an associated sales contract.
The company cautioned there is no certainty the facility will be concluded on the terms described, or at all.
Genovese also noted that a further 129 employees have been conscripted into Ukraine's armed forces this year, bringing the total serving to 837 at the end of September, and that two more colleagues were killed between July and September, taking total deaths since the full-scale invasion to 70.
