In the first half of 2025, Ukrainian producers of iron ore fell out of the country’s top three exporters. Export volumes declined by 11.9% compared to the same period last year, reaching 16.14 million tonnes, reports Baltimore Chronicle with reference to Liga.Net.
One of the primary reasons for the downturn is the global economic slowdown, as well as domestic tariffs imposed by Ukrainian state monopolies. Due to high rates charged by Ukrzaliznytsia, Ukrenergo, and the Gas Transmission System Operator, Ukrainian mining and processing plants are losing competitiveness on the global market.
Just six months ago, following the reopening of navigation in Ukrainian ports, iron ore surged to a leading position in export volumes — 33.6 million tonnes, an increase of 89%. In 2024, the sector ranked third in export revenue, behind corn and wheat. However, in January–June 2025, iron ore no longer made it into the top three most exported commodities.
Despite the decline, mining companies continue to play a significant role in the country’s trade balance. Iron ore still accounts for 6.35% of Ukraine’s total goods exports.
Analysts note that aside from external economic challenges, high operational costs are the main internal factor holding the industry back. These include wartime expenditures, the need for imported energy during outages, labor shortages, restricted operations, and direct damage from shelling.
Government fiscal policies have further strained the sector. According to Lucio Genovese, acting Chairman of the Board at Ferrexpo, delayed VAT refunds from the state forced the company to scale back production. As a result, over a third of employees were shifted to part-time or put on leave, procurement of goods and services was reduced, and all non-essential capital expenditures, CSR initiatives, and humanitarian support were suspended.
Adding further pressure was a recent decision by the Verkhovna Rada to increase land tax for mining enterprises by 2.6 times. According to Liga.Net, this will raise fixed costs across the mining and metals sector and further weaken its fragile financial position.
As a result, producers facing rising costs will become even less competitive in export markets, potentially leading to deeper production cuts and lower government and local tax revenues.
Earlier we wrote that USDA cuts Ukraine’s wheat forecast, raises soybean outlook.
