Shevchenkivskyi District Court of Kyiv partially cancelled the arrest of accounts of Poltava Mining and Processing Plant PJSC (PGOK) of the mining company Ferrexpo plc with assets in Ukraine to pay salaries to employees, provide assistance to internally displaced persons and mobilized workers, ensure the production process.
According to the company’s press release, the court made the respective decision on February 16 this year.
At the same time, the court partially satisfied the company’s claims. In particular, PGOK is allowed to pay salaries and related charges (alimony, sick pay, benefits for families of employees killed during the defense of Ukraine, etc.) for full-time employees, payment for rent of municipal and state property, goods and services of state and municipal enterprises, institutions and utilities.
In addition, it is allowed to make payments related to the payment of local taxes and fees, as well as payments for the purchase of food, groceries, rent of premises for accommodation of internally displaced persons.
The company’s press release welcomes the court’s decision, but states that the court rejected the possibility of payments for goods and services received from contractors. PGOK believes that the extension of the ban on making these payments jeopardizes the work of such companies, because for most of them, PGOK is the main customer.
In addition, the services and goods provided by these contractors are critical to ensure stable production activities of the company. And a possible reduction in production volumes or its shutdown would entail non-compliance of the state with taxes and employees with stable salaries.
PGOK also insists on the removal of the seizure of financial operations aimed at social support of Ukraine. According to the company, in 2022 PGOK allocated more than 500 million UAH to help 8 regions that suffered the most from the Russian aggression as part of the program of humanitarian support for Ukraine. The company considers it extremely important today to continue all planned social and humanitarian programs as part of the PGOK Charitable Foundation.
PGOK points to the importance of the full unblocking of accounts to ensure the full operation of the enterprise and is taking all necessary measures to this end.
As reported, by the decision of Shevchenkivskiy district court of Kyiv on February 3, 2023 all accounts of Poltava Mining and Processing Enterprise PJSC and expenditures, except for the payment of taxes to the state budget, were seized. This decision made it impossible to pay salaries and an annual bonus, which the company planned to make on February 7, 2023.
Later, the court adjusted the ruling, allowing the payment of wages, explaining the restrictions on its payment by a clerical error. However, the adjusted determination did not allow payments to accounts at other banks where the wage bill was opened, so it was difficult to comply. Despite this, as of February 16, 2023, salaries for January 2023 and the annual bonus for all full-time employees of PGOK had been paid in full, the company noted.
It was also reported that a court in Ukraine arrested the accounts of PGOK Ferrexpo at the request of the prosecutor’s office in the case of underpayment of rent for iron ore mining in 2018-2021. The company denies the fraud.
Earlier, the Security Service of Ukraine (SBU) and the Bureau of economic security (BEB) reported the suspicion of the chief accountant of PGOK Ferrexpo, the majority owner of which is a businessman and former MP Konstantin Zhevago.
“The SBU together with the BEB and the Office of the Prosecutor General reported the suspicion of one of the top managers of PGOK, which is part of the Ferrexpo group of companies and is owned by a Ukrainian fugitive oligarch,” the SBU said in a message on Telegram channel.
“BEB detectives reported the suspicion of the chief accountant of PGOK. The company is part of the Ferrexpo group of companies, which is owned by a billionaire from the Monaco battalion,” in turn stated the BEB.
According to law enforcement officials, due to the actions of the top manager, the company avoided paying to the state budget rent payments for the use of subsoil deposits of iron ores in the amount of about 2 billion UAH.
“The investigation found that the official during 2018-2021 entered false information in the official documents of the enterprise. This and caused significant losses to the state”, – was specified in the message.
Criminal proceedings were opened under part 3 of article 212 (evasion of taxes, fees) and part 1 of article 366 (official forgery) of the Criminal code of Ukraine.
The SSU and the BEB note that the conclusions of the comprehensive expertise conducted during the pre-trial investigation confirmed the amount of the damage to the state budget of 2 billion hryvnias.
Law enforcers continue to identify all the persons who might be involved in the crime.
Ferrexpo is an iron ore company with assets in Ukraine.
Ferrexpo owns 100% of the shares in Yeristovskiy GOK LLC and 99.9% in Belanovskiy GOK LLC. Before the court ruling in September 2022, Ferrexpo also owned 100% of Poltava Mining and Processing Division PJSC.
Mining company Ferrexpo plc with major assets in Ukraine is aware of the detention in France of its non-executive director and majority shareholder Konstantin Zhevago, but the company understands that it is caused by matters unrelated to Ferrexpo.
“Ferrexpo’s board of directors is trying to clarify the situation and will inform the market as necessary,” the company said in a statement.
As reported, the detention of Zhevago in French Courchevel for further extradition to Ukraine became known in the afternoon of December 28.
“To date, at the request of investigators of the State Bureau of Investigation (GBI) managed to detain Konstantin Zhevago in Courchevel. You know that he is the subject of several criminal proceedings with the GBI. Now the documents for his extradition are being prepared,” Tetyana Sapyan, the GBI communications adviser, said on the air of the Ukrainian TV marathon.
According to the stock exchange’s website, immediately after the news broke, the shares fell lightning fast by 4.4 pence to 168.5 pence and are now trading at 163.3 pence, about 5.5% lower than before the news of the detention.
Ferrexpo’s share price has dipped as low as 96p in the past 52 weeks amid news of production stoppages due to power supply problems caused by Russian shelling of the energy infrastructure, as well as the general global iron ore market situation.
The company’s shares were also down to 96 p. p. on the news of the production stoppages due to energy supply problems caused by Russian shelling of the energy infrastructure, as well as taking into account the global situation on the iron ore market.
Mining company Ferrexpo with assets in Ukraine, after suspending production since early October at its facilities in the Poltava region due to restrictions on electricity supply due to the shelling of the energy infrastructure by the Russian occupiers, is resuming operations of one pellet production line.
“After suspending its operations in October 2022, the group is now receiving enough electricity to restart one pellet production line. This will allow the group, along with its existing stockpiled products, to fulfill existing contracts with customers,” the company stated in a stock exchange statement Wednesday.
It explains that the company produced about 0.3 million tons of pellets in October-November as a result of disruptions and continued volatility in power supply in the fourth quarter of 2022. Overall pellet production in 2022 is expected to be about 5.9 to 6 million tons (down almost half by 2021 – IF-U).
“Despite the group’s production disruptions, shipments to customers in the fourth quarter of 2022 continued at about 250,000 tons per month,” the press release noted.
As reported, pellet production for the first nine months of 2022 was 5.637 million tons, down 31% from the same period last year.
Ferrexpo in 2021 increased total pellet production by 0.02% over 2020 to 11.220 million tons. The company also produced 234,000 tons of saleable concentrate with 67% iron content (up 28%) in 2021.
Poltava GOK has four pellet production lines.
Ferrexpo is an iron ore company with assets in Ukraine.
Ferrexpo owns 100% of LLC “Yeristovsky GOK” and 99.9% of LLC “Belanovsky GOK”. Before the September 2022 court ruling, Ferrexpo also owned 100% of Poltava GOK PJSC.
Mining company Ferrexpo plc with assets in Ukraine published its debut climate change report and announced an updated carbon reduction target of 50% by 2030 for Group 1 and 2 emissions.
The company recalled that it had previously pledged to reduce these emissions (Group 1 emissions from its own operations, mainly from combustion of fuel and gas, and Group 2 emissions from purchased electricity, steam, and heat) by 30% by 2030, but had already achieved this goal.
As the report specifies, in 2021, Group 1 emissions increased by 11% (hereafter per ton of production), while Group 2 emissions decreased by 40%, and overall emissions decreased by 16%.
Since baseline 2019, Group 1 emissions have fallen 1% and Group 2 emissions have fallen 54%, for a total drop of 30%.
Ferrexpo points out that diesel fuel accounted for 40% of Group 1 emissions in 2021, which could be reduced by the introduction of battery electric dump trucks as well as the use of trolley technology on uphill runs.
The company noted that it achieved significant reductions in Group 2 emissions last year by replacing 18% of natural gas in pelletizers with biofuels (sunflower husks), building a trial 5 MW solar power plant and a strategy of selective green power purchases.
In addition, in the climate change report, Ferrexpo also presented new emission reduction targets for Group 3 (third-party transport for product delivery and use in metallurgy) – 10% by 2030 and 50% by 2050.
The company indicates that the main reductions in this category could be achieved by switching to metallized (DR) pellets for direct reduction of iron, which uses electric arc furnace steelmaking methods without coal.
In absolute terms, according to the report, the goal is to reduce CO2 emissions of all three groups from 2.2 million tons in 2019 to 1.6 million tons in 2025 and 2030, 1 million tons in 2035, 0.5 million tons in 2040 and 0.2 million tons in 2050.
Translated into a ton of production, this would correspond to a reduction in emissions from 205 kg in 2019 to 107 kg in 2025, 68 kg in 2030, 44 kg in 2035, 22 kg in 2040 and 8 kg in 2050.
In the climate change report, Ferrexpo detailed a number of climate change risks and opportunities related to its business, particularly related to the introduction of CBAM, and a potential decarbonization pathway to achieve net zero iron ore pellet production by 2050.
“Our first climate change report is the culmination of an initial phase of work detailing climate change topics, such as risks and opportunities associated with climate change, as well as a special study of a potential decarbonization path for the group: achieving net zero production through 2050,” Ferrexpo CEO Jim North is quoted in the document.
As reported, in October 2021, Ferrexpo began working with Ricardo plc (Britain), which helped prepare this report, as part of its decarbonization plans.
Ferrеxpo owns 100% of Poltava GOK, 100% of Yeristovsky GOK and 99.9% of Belanovsky GOK. Last year, the company produced 11.2 million tons of pellets, becoming the world’s third largest exporter.
The UK-based Ferrexpo Plc, which controls Poltava Mining and Yeristovo Mining in Ukraine, intends to reconstruct the integral property complex of the pellet production shop at Poltava Mining.
According to the documentation at the disposal of Interfax-Ukraine, it is planned to reconstruct the integral property complex of the pellet production shop in the building of the filtration and averaging building for concentrate No. 1, A and 2, B.
The timing of the reconstruction and the amount of funds for the project are not made public.
Ferrexpo is an iron ore company with assets in Ukraine. Fevamotinico S.a.r.l., controlled by Kostiantyn Zhevaho, owns 50% of Ferrexpo, BlackRock holds 6.74% in it.
Ferrexpo owns 100% of the shares of Poltava Mining, 100% of Yeristovo Mining and 99.9% of Belanovo Mining.
British Ferrexpo plc, which controls in Ukraine, in particular, Poltava and Yeristovo mining and processing plants, reduced production of pellets by 14% in January-June 2022 compared to the same period last year, to 4.797 million tonnes.
According to the company’s press release on Thursday, pellet production in the second quarter of this year decreased by 23% compared to the first quarter, and by 27% by April-June 2021, to 2.085 million tonnes.
In the first half of 2022, production of premium pellets with an iron content of 65% amounted to 4.707 million tonnes (a decrease of 13%), including in the second quarter – 1.994 million tonnes (a decrease of 26% compared to the previous quarter and 28% compared to the same period last of the year). Output of direct reduced iron pellets (DRI, 67% of iron) in January-June amounted to 90,000 tonnes (an increase of 33% compared to six months of 2021), which were produced in the second quarter of this year, while they were not produced in the first one.
Pellets with an iron content of 62% were not produced in January-June of the current year.
At the same time, total production of marketable products (pellets and iron ore concentrate) over six months of 2022 decreased by 16%, to 4.816 million tonnes, in the second quarter compared to the first one – by 22%, and versus April-June 2021 – by 28%, to 2.103 million tonnes. In particular, output of commercial concentrate over six months of 2022 decreased by 88%, to 19,000 tonnes, the entire volume was produced in the second quarter, while there was no output in January-March.
The company explains the decline in pellet production by the ongoing war of the Russian Federation in Ukraine and the associated logistical restrictions. The Group continues to operate one to three of its pelletizing lines, reflecting the availability of logistics in Ukraine.
Sales in the first half of 2022 were 4.4 million tonnes, a decrease of 21% year-on-year and reflecting logistical constraints. At the same time, the group is negotiating with a number of logistics providers to resume access to maritime markets through neighboring countries.
Jim North, Chief Executive Officer of Ferrexpo, noted in his comment that the company continues to work and adapt its business in Ukraine as new risks emerge.
“We also continue to be impressed by the remarkable resilience of the people of Ukraine, despite the continual bombardment over the last four months. Our production result in the second quarter of 2022 reflects the determination of our people, our suppliers and our customers… In terms of logistics availability, which remains the largest constraint on our business at the present time, we are advancing efforts to increase seaborne exports and have made initial deliveries to customers,” he said.
Ferrexpo is an iron ore company with assets in Ukraine.
