Swiss headquartered iron ore producer, Ferrexpo has reported first quarter production results from its operations in Ukraine. Total pellet production slipped 2.6% compared to the final quarter in 2008, impacted by weather conditions in January, but higher grade 65% iron pellet output increased by 2.5% compared to the first quarter a year earlier.
Average cash costs of production in the first quarter were US$37.40 per tonne, also impacted by lower production in January, but the mid-tier iron ore producer confirmed that in March production costs were back to December 2008 levels (US$35/tonne). This is against an average DAF/FOB (Deliver at Frontier / Freight on Board) price in the first quarter US$76.7/tonne. Ferrexpo stated that it was offsetting weaker contract market prices by selling iron pellets into the seaborne spot market.
Ferrexpo’ principal asset is Ferrexpo Poltava Mining (FPM), which has one of the largest iron ore resources in the world.
“Ferrexpo remains flexible in the face of continuing market volatility. We have been able to keep our costs low while successfully ramping production back up to full capacity in March and placing substantially all of our production in the market during the first quarter. We continue to trade profitably,” commented Ferrexpo’s CEO, Kostyantin Zhevago.
Source: Proactive Investor
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