Ferrexpo Plc (LON:FXPO) has provided an update on recent developments in which a crew member of a vessel transporting the Group’s product sadly lost their life. The incident has also affected the Group’s logistics operations and had a resulting impact on the Group’s current liquidity position.
The Group expresses its deepest condolences to the family of the crew member who lost their life in an unprovoked attack on a civilian vessel.
Vessel incident in the Black Sea
Following the Group’s optimisation of its product mix towards sales of its highest quality ‘DR-grade pellets’ (FDP), as referenced in the Company’s Production Report for 2Q 2026 & Trading Update on 15 July 2026, the Group has been producing FDP and exporting the product to meet customer demand in the Middle East region.
The Company regrets to announce that a vessel loaded with its FDP inventory has been struck and damaged by Russian drones while sailing in Ukrainian waters of the Black Sea.
It is understood that the vessel currently remains afloat however the condition of the cargo and the vessel’s structural integrity remain unknown. Whilst the crew has been rescued from the vessel, regrettably, one crew member lost their life.
The Company understands that efforts are being made for the potential salvage of the vessel, however such an operation remains challenging under the current conditions.
The Group currently has approximately 189,000 tonnes of pellets designated for shipment (including 55,000 tonnes of FDP loaded on the affected vessel, and approximately 90,000 tonnes of FDP in stockpiles). The cost of production and delivery of this inventory is approximately US$20 million.
As a result of ongoing drone and missile attacks in and around the port, as well as on loaded vessels departing Ukrainian ports, the Group does not expect to be able to load additional vessels via this export route for the foreseeable future, given shipowners have provided advance notice of cancellation of their vessel fixtures.
Separately, the Group has made the relevant notifications under its existing insurance coverage and is working with the relevant parties to progress such claims.
Further information in relation to the incident will be provided as and when appropriate.
Impact on production and liquidity
As part of optimising the product mix between different quality pellets and concentrate as well as managing customer distribution under the constrained environment, the Group had forecast increased FDP sales for export from Black Sea ports in H2 2026. As a direct result of the vessel incident and the resultant vessel cancellations, the Group expects that this route will not be available for the foreseeable future.
This disruption has resulted in a material negative impact on the Group’s liquidity position. The Group now forecasts that it will have sufficient net accessible cash to operate until end-August 2026.
This forecast remains subject to the volatility of iron ore pricing, operating expenses (including energy costs), the resolution (or otherwise) of the matters described in this announcement, and the other risk factors and caveats set out in the Company’s previous announcements, including in relation to the Intended Fundraise, the suspension of VAT refunds and the ongoing legal proceedings involving Ferrexpo Poltava Mining.
The Board is evaluating several operational and financial scenarios to seek to mitigate the negative impacts, and further information will be provided as and when appropriate.
Intended Fundraise
The Board continues to work with its advisers to urgently progress the workstreams in order to be in a position to launch an equity capital raise to raise a minimum of US$100 million to support the working capital position of the Group (the “Intended Fundraise”).
The Intended Fundraise, if implemented, will be the subject of a further announcement, including the full terms and conditions of the Intended Fundraise.
