logo
Miner Ferrexpo sees iron ore output plummet after Ukraine suspends VAT refunds

Miner Ferrexpo sees iron ore output plummet after Ukraine suspends VAT refunds

Daily Mail​3 hours ago
Ferrexpo has reported a massive slump in iron ore production following the Ukrainian Government's decision to suspend tax refunds for the firm.
The mining company delivered 1.3 million tonnes of iron ore during the quarter ending March, compared to 2.1 million in the previous quarter, which was the highest amount since Russia's full-scale invasion of Ukraine in February 2022.
Meanwhile, the Swiss-headquartered group's pellet output plunged by 39 per cent from more than 1.3 million tonnes to 821,882 tonnes.
Ferrexpo has been forced to downsize its operations to one pelletising line and to reduce the production of high-grade concentrate due to the halting of VAT refunds and their negative impact on liquidity levels.
The suspension follows sanctions imposed by President Volodomyr Zelensky on the oligarch Kostiantyn Zhevago, who controls a 49.5 per cent stake in Ferrexpo and was once dubbed 'Europe's youngest self-made billionaire'.
Zhevago has been accused of embezzling funds from Finance & Credit Bank, which collapsed in 2015. He has denied all allegations.
Ukraine's government attempted, but failed, to seize his stake in Ferrexpo's Poltava mine through the courts in 2023.
In March, the Daily Mail reported that Ferrexpo would initiate international arbitration proceedings if Ukraine part-nationalised the site, which is Ferrexpo's largest iron ore mine.
'All efforts and representations are underway with the respective authorities and government bodies in Ukraine and internationally to try to resolve the VAT refund suspension,' said Lucio Genovese, interim executive chair of Ferrexpo.
Ferrexpo noted on Monday that demand for its high-grade low-alumina concentrate from customers in China continued to be strong.
The group's annual production volumes remain far below pre-2022 volumes due to the conflict in Ukraine disrupting export operations and many employees serving in the country's armed forces.
Mark Crouch, market analyst for eToro, said: 'Ferrexpo has long been navigating treacherous terrain, but the war in Ukraine has brought unprecedented disruption.'
However, he added: 'It's worth remembering that Ferrexpo has weathered severe downturns before.
'The company's shares have traded at significantly lower levels during prior crises, such as the 2008 financial meltdown and the 2015 commodities rout.
'For long-term investors with a high-risk appetite, this may be seen not as a crisis, but as yet another turbulent chapter in Ferrexpo's volatile history.'
Ferrexpo shares were 0.7 per cent higher at 49.1p on late Monday afternoon, taking their losses to around 55 per cent since the year began.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Europe does not have to choose between guns and butter. There is another way
Europe does not have to choose between guns and butter. There is another way

The Guardian

timean hour ago

  • The Guardian

Europe does not have to choose between guns and butter. There is another way

European governments are once again haunted by a tough choice between financing the military or spending on social programmes. That, at any rate, is the narrative that has taken hold since Donald Trump's retreat from the postwar global security order and the urgent pressure to rearm Europe. But to frame the dilemma facing Europe in this way is a big mistake. History teaches us that the political choice has never been about guns or butter, but rather guns or taxes. The collapse of the Soviet Union in the early 1990s seemed to close almost a century of global ideological conflict, but it was also supposed to make us all richer. With the end of the cold war, Europeans would no longer need to uphold an expensive military apparatus for territorial defence. Governments ditched conscription and walked back defence outlays. Cashing in on that so-called 'peace dividend', governments could spend on the domestic priorities of their liking, boosting non-military investment. Last month's Nato summit in The Hague showed how this tide has been dramatically reversed. Russia's full-scale invasion of Ukraine and Trump's uncertain commitment to Nato means that European governments have no choice but to invest more in their own mutual defence. The peace dividend, as Kristalina Georgieva, the head of the IMF, stated, 'is gone'. Europe's Nato members pledged to increase spending on 'hard defence', such as tanks and military salaries, from 2% to 3.5% of GDP by 2035. The question now is how to finance it. For some experts, the only way to build a warfare state that can deter Russia is to slash social spending. After all, goes the misleading argument, governments in the 1990s splashed the savings from defence on expensive welfare promises. Even before the Nato agreement in The Hague, the public were being softened up for the new reality. In a TV address in March, the French president, Emmanuel Macron, warned citizens that in a 'more brutal' world, they would have to make budget sacrifices. Macron ruled out higher taxes. Denmark's prime minister, Mette Frederiksen, decided to scrap a public holiday to finance higher defence spending. The UK has cut savagely into its international development aid budget for the same reason. But Europe would be drawing the entirely wrong lessons from history if it weakened the welfare state to build up the military state. There is another way: instead of slashing social spending, Europe's governments should raise taxes on corporations and capital to finance deterrence. Let's look at what actually happened in the 1990s. While cutting defence spending after the collapse of the Soviet Union allowed governments to increase social spending, it mostly gave them room to cut taxes and budget deficits, which they did with great zeal, as the 1990s neoliberal consensus took hold and tax competition intensified. Yes, the 'peace dividend' helped to finance big increases in social spending, but with ageing societies it was mostly devoted to pensions, health and longterm care. Social protection for the working age population has fallen across Europe since the end of the cold war. But from the mid 1980s to 2023, corporate income tax rates fell by around half within the Organisation for Economic Co-operation and Development (OECD). Capital gains tax rates also dropped significantly: from up to 53% in the early 1990s to 26% today in Germany, or from up to 30% to up to 24% today in the UK for the same period. The 'peace dividend' was in fact a boon for the wealthiest in Europe. Savings in defence not only went to the private sector via tax cuts, but also via reduced fiscal deficits. Germany's adoption of its contentious constitutional 'debt brake' in 2009 helped it to achieve a balanced budget; something that would have been impossible without cutting defence spending to the bone. Sign up to This is Europe The most pressing stories and debates for Europeans – from identity to economics to the environment after newsletter promotion In the years ahead, Europe cannot afford politically to place the burden of the defence buildup on the most disadvantaged groups. More public debt, as Germany has now committed itself to, will be necessary. But debt is often a regressive tax, weighing more on the poorest, as the wealthy own a large share of the debt. Moreover, if EU members don't agree to common borrowing to finance the defence surge, as happened during the pandemic, financial markets may not let EU countries with a high debt load, such as Italy or France, increase deficit-spending on defence. The 'new normal' of higher defence spending should thus also be funded by increasing taxes, especially on corporate income, high wealth and capital gains. This won't be possible without limiting tax competition at a Europe-wide level. Indeed, the idea that some European tax havens continue to suck up corporate tax resources from others while they free-ride on their defence spending will become increasingly difficult to sustain. France and Germany have long pushed for the harmonisation of corporate taxes across the EU's 27 members. The EU must now rein in tax-dumping countries such as neutral Ireland. Europe cannot achieve better defence without better tax revenues. And only a defence buildup that is supported by the wider public across Europe can run beyond the short-term momentum and thus develop into a credible deterrence. The experience of 'military Keynesianism' globally, and across history, has never been about guns or butter, but guns and butter. In a war, you not only need weapons, but also a supportive population to operate them. Keeping the peace on the home front is just as important as holding the line in the trenches. Rather than slashing the welfare state to build up the military state, Europe's leaders should think about how to improve and modernise social spending. Only the prospect of a better and fairer world will keep our societies united and capable of fighting. Shahin Vallée is a senior research fellow at the German Council for Foreign Relations. Joseph de Weck is a fellow with the Foreign Policy Research Institute

Russian minister sacked by Putin found dead
Russian minister sacked by Putin found dead

BBC News

time2 hours ago

  • BBC News

Russian minister sacked by Putin found dead

Russia's Investigative Committee says former Russian transport minister Roman Starovoit has been found dead, apparently with a self-inflicted gunshot was dismissed earlier on Monday by President Vladimir reason for Starovoit's dismissal was given and deputy transport minister Andrei Nikitin was announced as his replacement shortly Investigative Committee said it was working to establish the circumstances of the incident. Starovoit was appointed minister of transport in May 2024. Before becoming transport minister Starovoit had served as governor of the Kursk region for almost nine years, until May 2024. The region was partly seized by Ukrainian troops in August 2024 in a surprise offensive. Moscow only managed to drive out the Ukrainian forces, although in late June Kyiv said it was still holding a small area of territory inside successor, Aleksey Smirnov, was only in post for a short while. He was arrested in April and was later accused of embezzling funds that had been allocated for the building of fortifications on the border with Ukraine. According to Russian outlet Kommersant, Starovoit was about to be brought in as a defendant in the same case. It is unclear when, exactly, Starovoit died. The head of the State Duma Defense Committee, Andrei Kartapolov, told Russian outlet RTVI that his death occurred "quite a while ago".Earlier on Monday, before Starovoit's death was announced, Kremlin spokesman Dmitry Peskov was pressed by reporters on whether the dismissal meant Putin had lost trust in Starovoit over the events in Kursk."A loss of trust is mentioned if there is a loss of trust. Such wording was not used [in the Kremlin decree]," Peskov replied.

One killed, dozens wounded in Russian strikes on Kharkiv in Ukraine
One killed, dozens wounded in Russian strikes on Kharkiv in Ukraine

Reuters

time2 hours ago

  • Reuters

One killed, dozens wounded in Russian strikes on Kharkiv in Ukraine

KHARKIV, Ukraine, July 7 (Reuters) - At least one person was killed and 71 wounded in Russian drone attacks on the northeast Ukrainian city of Kharkiv, officials said on Monday, and President Volodymyr Zelenskiy called for more support from Kyiv's allies. One person was also killed in a drone attack on the southern city of Odesa and at least 20 were wounded in a morning drone strike on Zaporizhzia in the southeast, regional officials said. In Kharkiv, apartment buildings, a kindergarten and the regional draft office were damaged in two waves of strikes, local officials and the military said. During the second wave, Mayor Ihor Terekhov said six Shahed attack drones had struck Ukraine's second biggest city within 10 minutes, aimed "at residential streets, at cars, at people". He said the 71 people wounded in the two attacks included seven children. Andriy Prenko, 61, said he was having breakfast in his kitchen when he heard a drone approach. "I woke my wife and goddaughter up and took them to the bathroom. I stood behind the partition wall and then there was an explosion," he told Reuters in his damaged apartment. "Glass shattered and the windows were blown off. Then there was another one (attack)." Kharkiv has frequently been targeted since Russia's full-scale invasion in February 2022. Russia has increased the intensity of aerial attacks in recent weeks, and carried out more missile and drone strikes across Ukraine overnight. Russian airstrikes have killed thousands of civilians during the war. Moscow says it does not target civilians directly although it does target infrastructure that it says supports Ukraine's war effort. Ukraine has killed a smaller number of civilians in attacks on Russian territory and Russian-held parts of Ukraine. Zelenskiy urged Kyiv's Western partners to deliver on pledges to boost Ukrainian defences. "We are strongly counting on our partners to fully deliver on what we have agreed," Zelenskiy wrote on X. "Air defense remains the top priority for protecting lives."

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store