Cuba faces ‘devastating’ ripple effects from US hit to mining

Canadian miner Sherritt International Corp.’s decision to shut down its nickel operations in Cuba under US duress will weigh heavily on an economy that’s already starved for hard currency and fuel. 

In addition to halting production of the battery metal, it means Cuba loses revenue from its share of refining operations in Alberta and a metals-commercialization operation that it ran in partnership with Sherritt out of the Bahamas, according to Omar Everleny Perez, the former director of the Center for Cuban Economic Studies at the University of Havana.

Sherritt also produces electricity, oil and gas on the island through a one-third stake in Energas SA, another joint venture with Cuba’s state electric and petroleum companies. Energas, which accounts for about 10% of national capacity, is crucial because it produces the reserve energy needed to power up the country’s aging thermoelectric plants after chronic blackouts, Everleny said.

“The biggest problems are going to show up in electricity production,” he said by phone from the Cuban capital. “This is a devastating blow to our economy.” 

Sherritt didn’t respond to requests for comment on the status of those operations. Its shares were down as much as 10% on Friday in Toronto after dropping 42% a day earlier on the Cuba pullout news.

Cuba has been suffering days-long blackouts that have only gotten worse since the US imposed a near-total energy blockade on the island in January. Since taking office for a second time in 2024, President Donald Trump’s administration has been strangling the island’s economy as it tries to end 67 years of one-party rule in the Caribbean nation. 

Washington has hit Cuba’s remittances, tourism and its international medical brigades — some of Havana’s top sources of foreign income, said Paolo Spadoni, a professor at Augusta University in Georgia who studies the island’s economy. 

The US “has done an incredibly good job of going after their sources of revenue,” he said. “Now they’ve hit nickel exports; there’s very little left to go after.”

As late as 2021, nickel matte — a less refined nickel mixture — was Cuba’s top export, at $788 million, beating out tobacco, and raw sugar, according to data compiled by the Observatory of Economic Complexity. In 2024, the last data available, nickel had slipped to third spot at $88.6 million. 

Sherritt has been running mining operations in Cuba since the 1990s and had defied the US embargo for years. That the company is finally pulling out now “is a significant concession to the strength of these sanctions,” Spadoni said.

(By Jim Wyss)