Cuba's 2006 nickel output may not meet forecast http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-11-01T183922Z_01_N01362358_RTRIDST_0_METALS-CUBA-NICKEL.XML
Wed Nov 1, 2006
By Marc Frank
HAVANA, Nov 1 (Reuters) - Cuban unrefined nickel production may fall short of the 76,700 planned for the year due to a 3,000-tonne shortfall at one of three plants reported by joint venture partner Sherritt International (S.TO: Quote, Profile, Research) this week.
Sherritt said the joint venture Pedro Sotto Alba plant operated with state-owned Cubaniquel would produce 30,000 tonnes this year compared with the 33,000 tonnes it usually ships to the venture's Canada refinery. "Taking into consideration process bottlenecks experienced in prior quarters, full-year nickel production is expected to be approximately 30,000 tonnes," Sherritt said of the joint venture in its third quarter report.
Sherritt also announced that plans to add 16,000 tonnes to the plant's capacity by 2008 had been postponed in favor of adding 4,000 tonnes by 2008, another 9,000 tonnes in 2009 and a final 3,000 tonnes in 2011. Sherritt said cobalt output would be unchanged from 2005.
Cubaniquel operates two older plants in eastern Holguin province where the joint venture is located, exporting the product mainly to Europe and China. The three plants have operated at capacity for a number of years.
Cuba's 2005 unrefined nickel plus cobalt production was similar to the 75,900 tonnes reported in 2004 with just a 1.1 percent increase forecast for 2006, senior officials said at the close of 2005.
Nickel emerged as Cuba's biggest export earner in 2000 and garnered around $1.5 billion in 2005.
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.
Nickel is essential in the production of stainless steel and other corrosion-resistant alloys. Cobalt is critical in production of super alloys used for such products as aircraft engines.
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.
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