Cuba fuel squeeze to halt Sherritt’s nickel-cobalt operations

Sherritt International Corp. plans to suspend nickel and cobalt production in Cuba as fuel supply constraints affect the struggling communist-run island. The company’s shares plunged.

The Toronto-based firm has reduced operations at its Moa joint venture and expects to pause mining and processing within the next week, Sherritt said in a statement Tuesday. Planned maintenance activities will be performed during the downtime.

The nickel and cobalt complex becomes the latest victim of a long-running economic crisis in Cuba that has become a near-existential struggle since the US captured Venezuela’s Nicolás Maduro, an ally who provided a lifeline through oil shipments. US President Donald Trump, who vehemently opposes the island’s regime, later warned “Cuba will be failing pretty soon.”

To be sure, while halting operations at Moa is a blow for the company’s bottom line and the island nation’s economy, it’s a very minor event for global metal markets. The JV with Cuba’s General Nickel Company SA sends semi-processed material to a refinery in Alberta, which has a combined capacity of 38,200 tons. That’s a tiny fraction of the world’s mined supply, which in the case of nickel is dominated by Indonesian operations.

Sherritt received notification that planned fuel deliveries for Moa wouldn’t be fulfilled and is “actively engaging with relevant counterparts and evaluating all options for sourcing input commodities.” Sherritt said its refinery in Fort Saskatchewan, Alberta, has enough inventory to operate until about mid-April.

Operations at the Energas SA energy venture in Cuba, in which Sherritt has a one-third stake, are continuing as planned without any impact, the company said. Energas generates electricity from natural gas for the Cuban grid, from which Moa gets its power.

The company’s shares were down 17% at 1:08 p.m. in Toronto, heading for the steepest decline in almost seven years.

(By James Attwood)