Focused on high grade iron ore

Over recent years the Group has invested heavily in developing its high-grade iron ore production, achieving an increase in both the volume and quality of the Group's pellet production.

The Group primarily produces iron ore pellets, which are a premium product used by the global steel industry to produce premium forms of steel. To read more about the benefits of being an iron ore pellet producer, please click here. 

Strong track record of production

Ferrexpo has been consistently producing high grade iron ore since listing in 2007, with the Group currently undertaking a growth programme to increase production volumes and product quality, as well as introducing new iron ore products to the Group's marketing offering.

Chart: Production 2019-2022

100% high grade production

Ferrexpo's production of high-grade iron ore pellets today, which are pellets grading either 65% Fe or above, represents the culmination of a multi-year investment programme to develop a higher quality suite of products to offer to premium steelmakers around the world, to future-proof the Ferrexpo business. This investment journey towards high-grade production can be seen in the chart below, with 99% of the Group's production in 2020 comprising of high grade (65% Fe or above) iron ore products (2019: 96%). Testament to the delivery of this strategy, the Group was able to maintain consistent strong financial performance throughout the global COVID-19 pandemic in 2020 and 2021, which represents the culmination of several years of developing high-quality iron ore products for the Group's crisis-resistant customer base. For a case study on this journey of navigating sales during the COVID-19 pandemic, please click here.

Chart: High grade rising to 100% of total pellet production in 2021

Future growth: Wave 1 investment programme

The Group has long discussed its strategic ambition to double production through significant investment in its assets. In August 2021, the Group unveiled preliminary details of the first stage of this project, delivering the first module of growth to add 3 million tonnes of additional pellet production. Representing a 25% increase in existing pellet capacity, the Wave 1 project will enable the Group to begin to expand its global footprint significantly and target new growth markets for its latest product offering - Direct Reduction ("DR") pellets, whilst continuing to serve the Group's existing customer portfolio. For more information on the markets that Ferrexpo currently serves, along with future opportunities for key growth markets, please click here.

Case Study: DR pellets - a higher grade, lower carbon product

As part of the Group's ongoing journey to increase its product quality, having upgraded production to be largely grading 65% Fe, the next logical step was for the Group to begin producing even higher-grade, 67% Fe iron ore pellets, known as Direct Reduction ("DR") pellets.

DR pellets are a different type of pellet, used by a different type of steelmaker. The DR pellet is a type of iron ore used in steelmaking whereby either natural gas, electricity or even hydrogen is used as the means of converting iron ore to steel, rather than coal, which is used by blast furnace operators. In terms of iron ore pellets, around one third of global pellet exports in 2020 were DR pellets and the remaining two thirds were blast furnace pellets, and therefore DR pellets represent a significant new opportunity for Ferrexpo to invest in developing new customer relationships in new markets. To read about Ferrexpo's existing customer base and future markets, please click here.

Not only do DR pellets represent a significant marketing opportunity, they also offer a significant opportunity to reduce the Group's carbon footprint. Through steelmakers not using coal to convert DR pellets to steel, this pellet type has an inherently lower carbon footprint attached to it. DR pellets therefore offer Ferrexpo the opportunity to lower its own Scope 3 emissions through producing a greater proportion of this particular product, which is not a characteristic commonly seen in the mining industry. To read more about the Group's emissions (Scope 1, 2 and 3), in addition to the Group's carbon reduction targets, please click the following link.