Sherritt International Corp., a Canadian mining company and one of Cuba's largest foreign investors, is consulting with advisers and stakeholders after United States President Donald Trump expanded U.S. sanctions against the struggling Caribbean nation. The Toronto-based company issued a statement Monday after markets closed, saying it is assessing the implications of Trump's latest measures.
New sanctions target foreign businesses
The executive order, signed on Friday, targets almost any non-U.S. citizen or entity that conducts business on the communist-run island, which has been subject to broad economic sanctions since the 1960s. The new measures focus on key sectors including defence, mining, finance and security. Sherritt mines cobalt and nickel in eastern Cuba, processing the metal at its refinery in Alberta. In February, after Trump imposed a de facto fuel blockade on the island, the company announced a temporary halt to its Cuban operations.
Economic pressure intensifies
Trump seized the leader of Venezuela, Cuba's main ally, in early January and then blocked all but one Russian tanker from delivering oil to the island. This exacerbated chronic power outages and led to a dearth of gasoline, diesel and jet fuel. The U.S. president is hoping intense economic pressure will topple Cuba's government after 67 years of one-party rule.
Sherritt gambled on entering Cuba in the 1990s, when Fidel Castro tentatively opened the island's economy to foreign investment after the fall of the Soviet Union. Once seen as a barometer for the country's economic prospects, Sherritt's stock is trading at around 27 Canadian cents, giving it a market value of $186 million. That is down from a peak of $4.8 billion in 2008.
Property dispute legacy
A claim against Sherritt's mine in eastern Cuba is among thousands of outstanding property disputes certified by the U.S. government, with the asset valued at more than US$88 million before interest. The facility was owned by a subsidiary of what is now Freeport-McMoRan Inc. before it was nationalized after the 1959 revolution that brought Castro to power. Sherritt is due to report earnings next week, and the company's assessment of the sanctions will be closely watched by investors.
