Poltava Mining and Processing Plant to Suspend Operations: Management Cites the Reason
29 July 16:49
A liquidity shortage and the suspension of operations at ports and along the maritime route have forced the decision to suspend operations at the Poltava Mining and Processing Plant (PGZK, Horishni Plavni, Poltava Oblast)—the main asset of the mining company Ferrexpo—starting Monday, August 3, according to PGZK Board Chairman Viktor Lotous, as reported by "Komersant Ukrainian".
“The issue is currently under consideration—it’s practically a done deal—that we will suspend operations starting Monday because we need to wait for the working capital received from product sales—that is, perhaps 10 days, or perhaps 20 days—the enterprise will be shut down,” he said at a meeting of the parliamentary Temporary Investigative Commission (TIC) in Horishni Plavni on Wednesday.
As TSC Chairman Oleksiy Goncharenko noted at the start of the discussion, the situation at the Poltava Mining and Processing Plant has significantly worsened since February: during the winter, it was idle for 67 days, and now three of the four scheduled ships are blocked in ports.
Lotus added that one of the ships, carrying $5–6 million worth of cargo, was struck by a drone; one crew member was killed; the ship’s fate is unknown; and there is a risk that it is drifting toward Crimea.
“There is no communication. As of yesterday or the day before, the ship’s owner could not provide any information on what will happen next… It’s like a ghost in the Black Sea,” he noted.
The chairman of the board clarified that due to the blocking of value-added tax (VAT) refunds as a result of sanctions against Ferrexpo shareholder Konstantin Zhevago, approximately 200 million hryvnia is tied up each month.
Lotus added that under these conditions, salary levels at the company are 10–40% lower than those of competitors in Kryvyi Rih, so people are quitting and leaving the company.
“In the first half of the year, more than 600 people resigned from our enterprises—the Poltava and Yeristovo Mining and Processing Plants. As of January 1, there were 5,000 employees plus a few more at the Belanovsky Mining and Processing Plant, and now there are 4,400,” said the chairman of the board of the Poltava Mining and Processing Plant.
Serhiy Bavalin, CFO of PGZK, added that the company’s debt to suppliers and contractors currently stands at approximately 200 million hryvnias.
According to Lotous, Ferrexpo’s shareholders are currently seeking opportunities to raise funds from investors who believe the company will continue to operate.
He also noted that in the current situation, even if the liquidity issue is resolved, the company will not be able to reach a production level of 1 million metric tons, because, due to logistical challenges and high insurance and freight costs, it cannot “reach” the Chinese market, which accounted for 50–60% of its output before the war.
“According to my estimates, if, say, the war were to end tomorrow, it would take us at least five years to return to pre-war capacity—provided we don’t let this gap widen further,” Lotus said.
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Russian attacks are increasingly affecting Ukrainian businesses
The problems at the Poltava Mining and Processing Plant are yet another example of how Russian attacks on port infrastructure are affecting the Ukrainian economy and exports.
In recent days, Russian troops have been regularly attacking ports in the Greater Odesa area and civilian vessels in the Black Sea.
Earlier, the Ukrainian Sea Ports Authority reported that since the start of the full-scale invasion, Russia has:
- attacked more than 200 civilian vessels;
- damaged or destroyed more than 960 port infrastructure facilities;
- caused the deaths and injuries of hundreds of civilians.
What is known about Ferrexpo
Ferrexpo is an international mining company with its main production assets in Ukraine. The company specializes in the production of high-quality iron ore pellets, a significant portion of which is exported to European countries and other regions of the world.
The seaports of Greater Odesa remain one of the key routes for exporting the company’s products, so suspending operations on this route could significantly impact its production and financial performance.
In January–June of this year, Ferrexpo produced 1,385,100 metric tons of pellets, which is 36% lower than in January–June of last year, but in the second quarter, it increased production of this product by 64% compared to the first quarter—to 860,213 thousand metric tons. In 2025, the company reduced pellet production by 47%—to 3,221,500 metric tons.
As of June 30, 2026, the group’s net cash position (excluding lease obligations) stood at approximately $21 million, compared to $25 million as of March 31, 2026, and $47 million as of December 31, 2025.
FerrExpo owns a 100% stake in Yeristivsky GOK LLC, a 99.9% stake in Bilanivsky GOK LLC, and 100% of the shares in Poltava GOK PJSC.
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