2016 Full Year Results


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Who we are

Ferrexpo is a Swiss headquartered iron ore company with assets in Ukraine. It is the 6th largest seaborne pellet producer and has been mining, processing and selling high quality iron ore pellets to the global steel industry for over 35 years. Ferrexpo’s resource base is one of the largest iron ore deposits in the world.

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Stakeholder Engagement

Stakeholders are those groups or individuals who are affected by Ferrexpo’s activities or those whose actions may affect the ability of the Group to achieve its objectives.

The stakeholder groups that Ferrexpo engages with are described below.

Directors and senior executives have frequent discussions with institutional investors and major shareholders on a range of issues including company performance, strategy and governance. The Head of Investor Relations manages the Group’s communication programmes, particularly at the time of the full and half-year results announcements when presentations are given to analysts, brokers and major shareholders. The Annual General Meeting is an important event in the calendar, giving all shareholders the opportunity to engage directly with Directors and senior management.

Ferrexpo has maintained successful business relationships with many of its customers for over 20 years. Marketing plays an important role in developing new relationships in order to diversify the customer base in anticipation of the planned increase in production or changing market expectations.

A reputation for integrity and responsible behaviour underpins Ferrexpo’s commercial performance and is gained by motivating employees, building trust and developing goodwill.

Employee engagement starts at a personal level when employees begin their employment through an induction programme, and continues throughout their period of employment with the Company.

Ongoing employee engagement in carried out in a number of ways

  • face-to-face discussions between employees and their supervisors
  • Group training programmes,
  • job-specific skills training
  • specialised training to meet  compliance, legal or regulatory requirements (such as that undertaken in 2011 and in 2013 and 2014 during implementation of anti-bribery procedures across the Group).

In addition, all employees are communicated to through the Ferrexpo’s formal internal communication system.

This system includes use of:

  • bulletin boards
  • monthly publications
  • ‘tool-box’ talks at the start of each shift.

Important information is also communicated through Ferrexpo memoranda. In general, either an operations Director or senior manager is responsible for issuing these formal communiqués to the relevant employees.

Two-way communication is also encouraged, with employees providing feedback through their line managers or through occasional employee surveys.

At FPM approximately 95% of the workforce is represented by a single labour union while at FYM and FBM employees are represented by an employee representative forum consisting of both management-nominated and employee-elected representatives.

Positive engagement with employees and the labour union is maintained through established forums and communication structures. In 2015, the Company continued to enjoy positive labour stability without any interruption to production.

On various matters of mutual interest to Ferrexpo and its employees, management regularly consults and communicates with employees belonging to the labour union or represented by the employee representative forum through transparent partnership and communication structures.

Minutes from formal meetings are published to ensure that all the relevant employees of the applicable business operation are kept clearly and meaningfully informed on issues currently under discussion.

The labour union and employee representative forum consult directly and provide feedback to their members at membership meetings.

The Company provides the necessary resources for these meetings to enable these employee representative organisations to brief their members on important employee and Group matters.

Ferrexpo is committed to the adoption of fair labour practices at its workplaces: the Group’s conditions of service comply with applicable laws and industry standards.

Ferrexpo promotes workplace equality and seeks to eliminate all forms of discrimination.

The Group does not tolerate inhumane treatment of employees, including any form of forced labour, physical punishment, or other abuse.

Ferrexpo prohibits the use of child labour.

The Group recognises the right of its employees to freedom of association.

Ferrexpo operates fair and appropriate means for the determination of terms of conditions of employment.

The Group provides appropriate procedures for the protection of workplace rights and its employees’ interests.

Ferrexpo provides employees with opportunities of enhancing their skills and capabilities, enabling them to develop their careers and to maximise their contribution to the business.

Ferrexpo respects human dignity and the rights of individuals and of the communities associated with its operations.

The Group seeks to make contributions to the economic, social, and educational wellbeing of these communities by means that include sponsoring local community events and providing opportunities for employment to workers from the communities surrounding the Group’s operations.

Ferrexpo believes that it has the right and the responsibility to make its positions known to governments on any matters that affect its employees, shareholders, customers, or the communities associated with its operations.

While the primary responsibility for the protection of human rights lies with governments and international organisations, where it is within the Group’s power to do so Ferrexpo seeks to promote the observance of human rights in the countries in which it operates.

The Group supports the principles set out in the Universal Declaration of Human Rights.

Ferrexpo respects the personal participation of its employees in the democratic political process and their right to absolute privacy with regard to personal political activity. The Company will not attempt to influence any such activity, provided there is no disruption to workplace activities and that it does not contribute to industrial unrest.

The recent civil unrest experienced in the eastern parts of Ukraine, have not, to date, impacted Ferrexpo’s operations or the areas surrounding the operations.

Protection services are supplied to the Group through an external contract security company. The protection services supplier ensures that its personnel take cognisance of Ferrexpo’s stance on human rights, especially in relation to procedures of search, arrest and detention.

Ferrexpo recognises that a regular dialogue with the communities affected by its operations, in which many employees also live, is an important element in ensuring effective community relations and therefore a supportive environment for Ferrexpo’s activities.

As a mining company, Ferrexpo recognises the sensitivities that surround the displacement of small communities by its operations, and the impact that the operations have on the physical landscape. It maintains dialogue with local communities and has a dedicated department through which communications are channelled to ensure that concerns are heard and managed appropriately.

Support for local projects and community events is a further element of community engagement. The structure and objectives of community engagement are defined for all operations, where relevant, and clear management accountability and success criteria have been identified.

Engagement with local and national government is open and productive. Communication often focuses on project implementation and land acquisition, routine submission of information as required by the authorities; as well as opportunities to further enhance economic development in the regions Ferrexpo operates.

Ferrexpo believes that by building an inclusive culture it benefits from the many advantages of a richly diverse workforce. Being able to draw on diverse experiences, perspectives and approaches encourages innovation and is a source of competitive differentiation.

The Group’s efforts in this area therefore endeavour to create a culture where all employees feel appreciated for their initiative and the contribution they make to the Company.

The need to increase the participation of women in the workforce remains a key challenge and an important area of focus for the company. Mining as a career remains the choice of few women in Ukraine as a consequence of historical and cultural factors, such as the need to work shifts, and legislated restrictions in Ukraine that prevent women from working in potentially hazardous areas. The Group acknowledges that it has an important task ahead in finding effective ways to attract more women into careers in mining.

Notwithstanding, Ferrexpo recognises that it has a duty of care to provide a safe system of work for all its employees and specifically women of reproductive age, their unborn children, and all working mothers who are breastfeeding. At the same time, the right to equal opportunities and fairness is recognised. Approximately, 27% of the Group’s total workforce is composed of women.

Human resource development is a core component of Ferrexpo’s business strategies.

Investment in skills training to ensure that the Company is resourced with people with appropriate skills to contribute to the company’s operations and deliver excellent business outcomes is a key priority.

Human resource development primarily takes place through the Training and Development Centre in Horishni Plavni, which delivers core technical, mining, information technology, and labour safety training to both employees and contractors.

Training in theory is confirmed through practical application and formal assessment in the workplace.

Comprehensive, quality healthcare is available to all Ferrexpo employees and their dependents through a fully equipped Company funded hospital at FPM.

In addition, the Group has a well-developed system of occupational healthcare services, including annual health screening for all employees working in hazardous areas and an annual assessment of these hazardous areas.

Contractor staff working on Ferrexpo’s sites are subject to minimum performance requirements agreed between their employers and Ferrexpo that cover, inter alia, compliance with labour legislation, labour safety and environmental protection.

For example, all contractor staff are required to undergo appropriate safety induction programmes before being allowed to work on the site. Ferrexpo requires adherence to these principles by its business partners and their willingness to accept these principles is an important factor in the Company’s selection process and decisions to enter into, and remain in, such relationships.