[lbo-talk] Canada's Sherritt begins Cuba nickel expansion

uvj at vsnl.com uvj at vsnl.com
Tue Apr 25 08:22:16 PDT 2006


Reuters.com

Canada's Sherritt begins Cuba nickel expansion http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-04-19T135417Z_01_N19195033_RTRIDST_0_METALS-CUBA-NICKEL.XML

Wed Apr 19, 2006

HAVANA, April 19 (Reuters) - Canadian resource company Sherritt International Corp. (S.TO: Quote, Profile, Research) and Cuba have begun a 16,000 tonne expansion of their joint nickel and cobalt production facility, official Cuban media said on Wednesday.

The plant, in Moa, eastern Holguin province, is a joint venture with state-owned Cubaniquel and currently produces 33,000 tonnes per year. Plans call for increased output to come on line in 2008 without affecting current production, Sherritt recently reported.

Sherritt President Ian Delany and Cuban Basic Industry Minister Yadira Garcia were among company executives and Cuban officials in Holguin on Tuesday to inaugurate the project after a year of planning.

Delany and Garcia both emphasized the challenge posed by the 2008 termination date, but expressed confidence it would be met, the Cuban media said.

The $450 million expansion project includes retooling a joint venture refinery in Canada to handle the increased output and mining rights that would supply the Moa plant for 25 years.

Cubaniquel operates two of three processing facilities in Holguin province, 500 miles (800 km) east of Havana, and is a 50 percent partner in the third with Sherritt International.

The industry is operating at a current capacity of around 76,000 tonnes of unrefined nickel plus cobalt.

Nickel is essential in the production of stainless steel and other corrosion-resistant alloys. Cobalt is vital to produce super alloys used in aircraft jet engines, wireless phones and high technology batteries.

Nickel emerged as Cuba's biggest export earner in 2000 with most of its nickel plus cobalt sulfides and oxides going to Canada, Europe, and more recently China.

The Communist-run Caribbean island is one of the world's largest nickel producers and supplies 10 percent of the world's cobalt, according to the Basic Industry Ministry.

China's state-owned Minmetals Corp. agreed in 2004 to form a joint venture to produce ferro-nickel at a plant abandoned when the Soviet Union collapsed. The $500 million project would produce 68,000 tonnes of ferro-nickel annually (21,000 tonnes of nickel), but plans have reportedly been delayed.

Cuba has invested more than $500 million over the last decade in the industry.

Cuban nickel is considered to be Class II with an average 90 percent nickel content.

Cuba's National Minerals Resource Center reported that eastern Holguin province where the industry is based counted 34 percent of the world's known reserves, or some 800 million tonnes of proven nickel plus cobalt reserves, and another 2.2 billion tonnes of probable reserves, with lesser reserves in other parts of the country.

© Reuters 2006. All Rights Reserved.



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