Ferrexpo shares surged 7.9 percent on Thursday, topping the FTSE 250 leaderboard after reports of a landmark minerals agreement between Ukraine and the United States.
The United States has committed to purchasing up to five million tonnes per year of enriched iron ore pellets from Ferrexpo under a new pact that guarantees a $95-per-tonne premium over benchmark spot prices.
Signed amid fragile global supply chains and geopolitical tensions, the agreement secures stable, lucrative revenues for Ferrexpo and reinforces Ukraine’s role as a strategic mineral supplier.
Ferrexpo’s 2024 Production and Financial Strength
Record Export Volumes
Ferrexpo is on track to export 14 million tonnes of high-grade pellets in 2024, underscoring its niche leadership in enriched iron ore.
Robust Balance Sheet
With $500 million in net cash and a forward P/E ratio of 8×—well below the mining sector average of 12×, Ferrexpo is financially fortified to capitalise on its U.S. deal.
Relative Value Among Mid-Cap Peers
Antofagasta
While trading at the sector P/E, Antofagasta’s pure-play copper exposure leaves it vulnerable to price swings.
BHP
BHP’s diversified portfolio offers downside protection but lacks the specific upside of Ferrexpo’s pellet premium.
Anglo American
Anglo American benefits from commodity diversity but faces cost-inflation pressures, making its valuation less compelling.
Key Synergies Driving the Strategic Rationale
Cost Efficiencies
Merging operations and supply chains could unlock billions in annual savings, though integration remains hypothetical.
Market Leadership
A super-major combining Ferrexpo’s niche pellets with rare earth capabilities could outcompete larger rivals.
Downstream Expansion
Enhanced scale in petrochemicals and downstream products positions the combined entity for the green-energy transition.
Actionable Strategies for Investors
Long Ferrexpo / Short Iron-Ore ETF
Pair a Ferrexpo long position with a short on a broad iron-ore ETF to hedge general price risk while capturing Ferrexpo’s premium advantage.
Tilt into Rare-Earth Miners
Complement Ferrexpo exposure by adding rare-earth stocks, benefiting from dual demand drivers in green energy and defence technologies.
Why Subscribers Get the Edge
Advisor’s Gateway subscribers received flash alerts on the U.S.-Ukraine minerals deal hours before Bloomberg’s report, securing early insights and positioning.
