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Iron Ore Producer Ferrexpo Plunges 51% After $3.8 Billion Ukrainian Civil Claim

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(Bloomberg) -- Shares in London-listed miner Ferrexpo PLC sank as much as 51% after the company said a civil claim worth 157 billion Ukrainian hryvnias ($3.8 billion) had been filed against its subsidiary in the Eastern European country.

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The Swiss-headquartered iron ore producer saw its biggest intraday drop on record, before paring losses to 23%. Earlier Tuesday the company issued a statement informing investors that its Ukrainian subsidiary Ferrexpo Poltava Mining was facing a claim for allegedly illegally mining and selling subsoil, which is said to have caused damage to the environment.

Ferrexpo rejected the allegations, and said the accusations it faced had “transformed” from earlier ones accusing the company of alleged illegal sale of waste products. The subsidiary intends to defend its position in the Ukrainian courts, according to a market update released by the company.

In mid-January, Ferrexpo issued a statement in response to reports in Ukrainian media concerning accusations made by the Prosecutor General’s Office of Ukraine against four senior managers of its subsidiary, concerning the alleged illegal mining and sale of waste products.

The company said the minerals in question were not a separate mineral resource, and that it had been selling waste products for many years until September 2021, which had been subject to state inspections.

Ferrexpo’s Poltava operation, located in central Ukraine, is the group’s largest mine. Before Russia’s invasion of Ukraine in 2022, Ferrexpo PLC was the world’s third-largest exporter of iron ore pellets.

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