A double blow for Ferrexpo: a lawsuit for UAH 157 billion and a drop in shares
5 February 09:42
Ferrexpo, a mining company listed on the London Stock Exchange, has announced that its Ukrainian subsidiary, Ferrexpo Poltava Mining (FPM), has been the subject of a civil lawsuit worth UAH 157 billion ($3.77 billion) in connection with the alleged illegal extraction and sale of waste. This was reported by Reuters, according to Komersant ukrainskyi.
It also reported that after this news, the company’s shares fell by almost 21% to a two-month low of 81.9 pence.
What Ferrexpo says
The Ukrainian division of Ferrexpo Poltava Mining considers the accusations and claims to be “groundless” and intends to “vigorously defend” its position in the courts. This was reported by Ferrexpo, which also outlined its vision of what is happening with the lawsuits against its subsidiary Ferrexpo Poltava Mining in Ukraine.
They stated that on January 16, 2025, the National Police completed a pre-trial investigation into the sale of iron ore pellets and sent the case to the court of first instance. But now, after receiving information about the filing of a civil lawsuit, it can be stated that “the initial allegations of illegal sale of waste have been transformed into allegations that FPM illegally extracts and sells subsoil (minerals other than iron ore), which is alleged to have caused environmental damage.”
“Ferrexpo emphasizes that FPM completely rejects these allegations on the grounds that there has been no illegal mining. FPM extracts iron ore in accordance with its mining license. The iron ore is then processed to produce iron ore pellets. As a result of these processes, any remaining waste is managed in accordance with best mining practices and environmental standards.

What the Ukrainian Prosecutor’s Office says
On January 15, the Prosecutor General’s Office announced that prosecutors from the Specialized Environmental Prosecutor’s Office had sent an indictment to court against four officials of a mining and processing plant in Poltava region.
The chairman of the board of the plant is charged with illegal mining, abuse of power and legalization of property on a particularly large scale obtained by criminal means, his deputy and two department heads with legalization of property on a particularly large scale obtained by criminal means.
The investigation established that the chairman of the board, having entered into a criminal conspiracy with other unidentified officials of the mining and processing plant, set up a scheme for illegal mining for the purpose of enrichment.
The company, which was licensed to extract only iron ore, illegally processed and sold other minerals obtained during the production process. These rocks were supposed to be stored in specially designated storage facilities, and their processing required a special permit.
Between 2015 and 2021, more than 20 million cubic meters of minerals were extracted, which is equal to about 164 thousand railcars. The amount of environmental damage caused is over UAH 157 billion.

At the same time, the plant’s CEO, together with his deputy and two department heads, organized the legalization of illegally extracted minerals. The officials used the company’s facilities to process the extracted rocks into crushed stone products of three different fractions and sell them. To make their actions look legitimate, they entered false information about the results of mineral processing into the reporting documentation. In this way, they legalized more than 885 thousand tons of crushed stone products and waste rock illegally mined for a total of UAH 33.5 million.
What we know about Ferrexpo’s business and shareholders
Ferrexpo Group, according to LIGA.net, owns Poltava and Yeristovo mining and processing plants in Ukraine, which extract iron ore and process it into iron ore pellets. This raw material is used to make steel using coke-free technology, which has a lower environmental impact. As a result, there is a consistently high demand for pellets.
The company’s shares have been listed on the London Stock Exchange since 2007. Ferrexpo’s largest shareholder is Konstantin Zhevago. In 2023, Zhevago’s stake in Ferrexpo decreased from 50.3% to 49.5%.
In June 2023, the Security Service of Ukraine and the State Bureau of Investigation reported that the top management of the Poltava Mining and Processing Plant, the main business asset of Konstantin Zhevago, was suspected. According to the SBU, the company’s officials created an organized criminal group and set up a scheme to misappropriate budget funds during the extraction and sale of minerals worth almost UAH 400 million.
According to LIGA.net, Kostiantyn Zhevago himself was notified of suspicion in 2019, accused of possible involvement in the embezzlement of UAH 2.5 billion from the Finance and Credit bank and put on the international wanted list. At the end of December 2022, Zhevago was detained in France, but Ukraine failed to extradite him.