Ferrexpo PLC on Wednesday said it has successfully continued to produce, transport and sell its products despite challenges caused by the war in Ukraine, with iron ore and total commercial production both increasing in the latest quarter and half year.

Ferrexpo is a Baar, Switzerland-based headquartered iron ore company with operations in central Ukraine and customers across Europe and Asia.

The company said that iron ore pellet production increased 18% to 1.1 million tonnes in the second quarter of 2023, from 901,000 tonnes in the first quarter. Production for the first half of the year increased 57% to 2.0 million tonnes from 1.3 million tonnes in the second half of 2022.

Ferrexpo also said that commercial concentrate production rose by 96% in the quarter to 106,000 tonnes from 54,000 tonnes. It increased by 51% in the half year to 160,000 tonnes from 106,000 tonnes.

Overall, Ferrexpo said total commercial production was up 23% quarter on quarter to 1.2 million tonnes from 954,000 tonnes. In the half year it increased 59% to 2.1 million tonnes from 1.3 million tonnes.

Ferrexpo operated two pelletiser lines despite energy and logistics constraints, with interim Executive Chair Lucio Genovese saying: ‘It is pleasing to see that during the first half, a second pellet line returned to production, improving flexibility and enabling us to recover production.’

The company said its focus on higher grade iron ore production continued during the quarter, comprising entirely of high grade blast furnace pellets, all graded 65% Fe or above.

Ferrexpo also reported a lost time injury frequency rate of 0.31, below the historic five-year trailing average of 0.69. The company said it is taking ‘extensive measures’ to protect its workforce and employees’ families and communities.

Sales continued to be exported to Central-Eastern Europe and the Black Sea by rail and barge. ‘Logistics, however, remain constrained, and whilst we now have the capacity to produce more, currently we do not have sufficient availability at alternative Black Sea ports to export more,’ Genovese added.

Ferrexpo intends to continue to operate with at least one pellet line for the rest of 2023, assuming no further material changes to the operating environment and logistics availability in Ukraine.

Genovese said: ‘We continue to assess alternative supply routes in the near-term, and indeed looking to a post-war future, we are developing plans to rebuild capacity so that we can return to full production levels and play our part in the recovery of Ukraine.’

Shares in Ferrexpo were down 5.5% at 88.96 pence each in London on Thursday morning.

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