The Ukrainian division of Ferrexpo has been accused of illegal mining, but the company strongly denies the allegations, according to Reuters.

The mining company Ferrexpo announced that a civil lawsuit has been filed against its Ukrainian subsidiary Ferrexpo Poltava Mining (FPM) for 157 billion UAH (over $3.78 billion).

Reuters writes about this.

It is reported that the lawsuit was filed due to alleged illegal extraction of minerals and sale of production waste. 

“The initial accusations of illegal waste sales have transformed into allegations that FPM is engaged in illegal extraction and sale of resources, which is claimed to have caused environmental harm,” commented Ferrexpo.  FPM denies the accusations based on the assertion that “there has been no illegal resource extraction.” The subsidiary intends to “vigorously defend” its position in court, the company added.

Ferrexpo stated that the lawsuit has not affected its operations. However, the company’s shares fell nearly 21% to more than a two-month low of 81.9 pence following the news of the lawsuit.

Ferrexpo owns the Poltava and Yeristivskyi mining and processing plants in Ukraine, which extract and process iron ore. Their products are used for steel production, which has a lower environmental impact. As a result, there is a high demand for it.

Since 2007, the company’s shares have been listed on the London Stock Exchange. Previously, the largest shareholder of Ferrexpo was businessman Konstantin Zhevago. In 2023, his stake decreased from 50.3% to 49.5%.

In August 2024, the Ministry of Justice seized 49.3% of shares of the Poltava GZK due to Zhevago's debts to the National Bank, and Ferrexpo filed an appeal. In November, the Northern Appeal Economic Court upheld the decision to seize the businessman’s assets.