By Jaime Llinares Taboada

Ferrexpo PLC said Monday that it will have to reduce production due to infrastructure damage caused by a Russian missile strike. Here’s what the Ukraine-focused iron-ore pellets company had to say:
On logistics:

“As previously announced, Ukraine’s Black Sea Ports remain closed and the Group has had to divert all of its iron ore pellet sales to European markets via Ukraine’s diverse railway network, as well as via the Group’s barging operations. Russia’s invasion of Ukraine in 2022 has resulted in periodic disruption to the railway network across the country, with the national rail operator having to consistently repair and re-open damaged sections of the railway network following Russian air strikes.”
“The Group has recently been notified of further infrastructure damage as a result of a Russian missile strike in southwest Ukraine, which has reduced the Group’s ability to use its barging operations that serve European customers. The Group’s barging operations accounted for 0.8 million tons of iron ore deliveries in 2021.”
“Separately, the Group is in advanced discussions with additional port operators in central Europe for seaborne exports, whilst Ukraine’s Black Sea ports remain closed.”
On operations:
“As of the end of May 2022, the Group had produced 4.4 million tons of iron ore pellets, representing a level 8% below the same point in 2021. The Group has realized a combined 0.4 million ton increase in iron ore inventories in the months of March, April and May 2022, which the Group will look to reduce as logistics constraints ease over time.”
“The Group continues to operate its assets in accordance with the volume of sales that are accessible given the ongoing conflict in Ukraine, and has recently operated in line with the historic level of sales to European markets, in addition to serving excess demand derived from reduced deliveries of Russian iron ore into Europe. The Group continues to receive deliveries of key consumables sufficient for the planned level of pellet output.”
“However, as a result of the damage to infrastructure and increase in inventories of iron ore pellets referenced above, the Group will lower production for a period of time, until an alternative logistics route is agreed, damaged infrastructure is reopened and/or Ukraine’s Black Sea ports resume activities.”
“The Group will continue to operate between one and three of its four pelletiser lines for pellet production, meeting accessible demand in European and seaborne markets.”
Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT