RE: Trump calling Putin on Monday19 May 2025 11:22
Ferrexpo was forced to shut down two of its pellet production lines. This happened due to actions taken by the tax authorities, who imposed sanctions against Kostyantyn Zhevago and suspended VAT refunds. However, Zhevago owns neither shares in Poltava Mining nor stakes in Yeristovo Mining, so he is not legally the owner of these companies. The situation with VAT refunds has led to reduced production and salary payments, a decrease in social spending and potential tax revenues to budgets of various levels.
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We have filed an appeal with the tax service in Kyiv. We also held a meeting with representatives of the tax authorities. Nevertheless, in January and February, the VAT refund debt reached approximately $25 million, and this amount has not been refunded by the government.
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Therefore, we made a statement to the London Stock Exchange and informed the government of the possibility of initiating international arbitration proceedings. We have around two more months to begin at least partially resolving the issue.
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Our shareholders are also concerned about this situation. Half of them are the largest and most well-known investment companies, and they have responded very negatively to reducing production. After all, they are losing on market capitalisation or on the market value of the shares they hold in the company.
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Since the beginning of the full-scale invasion, Ferrexpo has invested over $300 million in various projects. Last year alone, we invested nearly $102 million and planned to maintain this level of investment into 2025. However, the delay in VAT refunds has forced us to suspend investment projects. Currently, we are only investing the bare minimum needed to maintain the key assets we operate.
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When we are able to resume work on these projects, we plan to diversify production — not only of pellets but also of concentrate with the possibility of further exporting it. We also intend to continue projects to implement unmanned dump trucks for mining operations and to electrify our quarrying processes. Currently, we are working on projects to build our own solar power plants and use biofuels. But again, these are minimal funds that we are currently able to invest.
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We hope to fully resume production and all our projects as soon as possible, so we can continue contributing to the Ukrainian economy.
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