The mining giant Ferrexpo, which owns key assets in Ukraine, has made an unprecedented decision to temporarily suspend the production of iron ore products. The Swiss company, whose main assets are concentrated in Ukraine, is forced to stop the operation of its enterprises due to a critical situation with logistics and security threats in the Black Sea.

Logistical deadlock and security threats

The main reason for the shutdown is the inability to export safely. According to the official exchange announcement, the threat of attacks in the area of Ukrainian ports and the waters surrounding them has significantly restricted the group's logistics routes. Export via the Black Sea, which was a key sales channel, has become practically impossible due to military actions.

The situation was exacerbated by a recent incident involving a civilian vessel transporting Ferrexpo pellets. The ship was shelled by Russia. Despite the damage, the drifting vessel was located and removed from the combat zone. It is currently being towed to the nearest port for a technical inspection and assessment of the cargo condition.

Previously, Viktor Lotosh, the head of the Poltava Mining and Processing Plant, estimated the value of the cargo on the damaged ship at $5–6 million. There was a real risk of losing the ship if it had drifted towards the temporarily occupied Crimea. Earlier, after an attack on a ship carrying pellets, which resulted in the death of one crew member, the company had already suspended sea shipments from the ports of Greater Odessa.

Financial risks and planning horizon

In addition to logistical problems, the company faces the need to preserve working capital. In its statement, Ferrexpo emphasizes that the suspension of production is a measure to preserve capital in conditions of uncertainty. At present, the company continues to fulfill obligations to European customers, shipping products from existing stockpiles.

However, the full restoration of the production cycle depends entirely on attracting additional financing. According to the company's calculations, without new investments and an expansion of the cash reserve, current funds will last only until mid-September 2026.

Decline in production volumes

The impact of the war and logistical restrictions has already been reflected in the holding's operational indicators. Statistics for the first half of 2026 demonstrate a significant decrease in activity:

  • In January-June 2026, Ferrexpo produced 1.38 million tons of pellets, which is 36% less compared to the same period last year.
  • By the end of 2025, production decreased by 47%, totaling 3.22 million tons.
  • In the second quarter of 2026, a temporary increase in output of 64% was achieved compared to the first quarter (to 860.2 thousand tons), however, the overall trend remains negative.

The group structure includes 100% of the shares of PJSC "Poltava Mining and Processing Plant", 100% of LLC "Erystovsky Mining and Processing Plant" and 99.9% of LLC "Bilanovsky Mining and Processing Plant". The shutdown of these facilities puts at risk not only the company's export plans but also economic stability in the regions of presence.