Ferrexpo PLC has provided an update on the investigation by Ukrainian authorities into the use of waste products from its Ferrexpo Poltava Mining (FPM) operation. The company states that the minerals in question are waste products left over from the crushing of iron ore during the production process. The sales of the rubble were subject to inspections by the State Service for Geology and Subsoil of Ukraine for many years, and the company has not conducted any sales of the rubble since September 2021. The FPM employees who were detained by the State Bureau of Investigations (SBI) have been released after paying bails totaling UAH122 million (US$3.4 million) in aggregate. The company believes that the claims regarding the sale of waste products by FPM are without merit.

In a further development, the Chair of the FPM Management Board has been detained with bail set at UAH999 million (approximately US$27 million). The bail was later reduced to UAH400 million (approximately US$11 million) after an appeal. The company has elected to pay the reduced bail so that the Chair of the FPM Management Board can be released. The payment of the bail amount is considered a smaller related party transaction, and the company has obtained written confirmation from an FCA-approved sponsor firm that the terms of the transaction are fair and reasonable for the shareholders.

The company notes that there is a risk that the courts in Ukraine may seek to impose further bail payments in connection with the waste products investigation or other legal challenges against the company or its senior management personnel. The company will assess any further bail payments at the time, considering the circumstances of the case and the financial position of the group. The operations of Ferrexpo are unaffected, and further updates will be provided as appropriate.