Sherritt International Corp. has halted joint venture activities in Cuba after U.S. President Donald Trump expanded sanctions on the communist-run Caribbean nation. The Canadian mining company, one of the island's largest foreign investors, is taking steps to repatriate employees from Cuba and has requested its Cuban partners bring back their personnel from Canada, according to a statement issued Thursday. Sherritt said there is no immediate impact on its Canadian refinery operations in Fort Saskatchewan, Alberta.
Heavy Blow for Cuba
Losing Sherritt represents a significant setback for Cuba, which is experiencing its deepest economic crisis in decades as Trump intensifies efforts to topple the government. The executive order signed last week targets nearly any non-U.S. citizen or entity conducting business in the country, which has been under broad economic sanctions since the 1960s. The company, which is due to report earnings on May 12, said earlier this week it was consulting advisers and stakeholders on the order's impact.
Historical Context
Sherritt has been mining cobalt and nickel in eastern Cuba since the 1990s, processing the metals at its Alberta refinery. The miner gambled on entering Cuba 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 traded at 17.5 cents U.S. as of 9:47 a.m. in Toronto, giving it a market value of about US$123 million. That is down from a peak of about US$4.8 billion in 2008.
Impact of Sanctions
In February, after Trump imposed a de facto fuel blockade on the island, Sherritt announced a temporary halt to its Cuban operations. The Toronto-based company said it has not been formally designated under Trump's new measure, but noted that "the mere issuance of the executive order itself creates conditions that materially alter the corporation's ability to operate in the ordinary course." Three Sherritt directors — Brian Imrie, Richard Moat and Brett Richards — have resigned from the board, effective immediately.
Operations and Market Significance
Sherritt's Moa collaboration with Cuba's General Nickel Company SA mines, processes, and refines nickel and cobalt for sale worldwide. The venture includes an open pit mine and processing facility in Moa, Cuba, and refining facilities in Alberta. While halting operations is a blow to Sherritt's bottom line and Cuba's economy, it is minor for global metal markets. The venture's annual combined production capacity of 38,200 metric tonnes is a tiny fraction of the world's mined supply — in nickel's case, dominated by Indonesia. 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. The company also produces electricity, oil, and gas on the island. Sherritt did not immediately reply to a request for comment on the status of those operations.
