The mining of iron ore has not been an easy business line so far in 2016, but Ukrainian miner Ferrexpo (FXPO) has put in a solid performance in the six months to June, thanks to a record sales volumes and an exceptionally low cost profile. In fact, local currency devaluation, lower oil prices and operational efficiencies brought reported cash costs down by 23 per cent to $25.7 (£19.3) per tonne, putting Ferrexpo among the most competitive producers of iron ore pellets in the world.
Record first-half sales also helped, with operating cash flows of $142m already 11 per cent up on the whole of 2015. Nonetheless, this improvement in operational fortunes has not been sufficient to remove a key obstacle: the company's ability to pay the $159m of debt that matures this financial year. Given operating profit before adjustments in the year to June was a mere $133m, and with the cash position hamstrung by the collapse of the company's transactional bank last year, management will be relying on a further uptick in prices and volumes.