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Ukraine-focused iron miner Ferrexpo said it will restart paying dividends after rising iron prices helped and record production helped it report a sharp jump in profits for 2016.

The company announced on Wednesday that it will pay a final dividend of 3.3 cents per share, and a further special dividend of 3.3c per share, as it reported a rise in pre-tax profits from $25m in 2015 to $231m.

The UK-listed group had already reported that it notched up record sales volumes during the year, and said it started 2017 with a “much improved capital structure”.

Revenues increased 3 per cent to $986m, in line with analyst forecasts, while earnings before interest, tax, depreciation and amortisation were higher than predicted, up 20 per cent to £375m.

It also confirmed a strong turnround in its cash position, after the collapse of the bank where it held most of its cash cost it around $175m in 2015. Ferrexpo’s cash balance at the end of 2016 rose to $145m, from $35m a year ago, and it cut its net debt to ebitda ratio from 2.78 times to 1.57 times.

Ferrexpo is one of the largest exporters of iron ore pellets to the steel industry. The metal, a key ingredient in steel-making, almost doubled in value last year, boosted by higher demand from China.

The FTSE 250 group particularly benefited from the rocketing price of coking coal, which encouraged Chinese steel mills to use more pellets and high grade ore in their blast furnaces.

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