Low prices take toll on Cuban nickel revenues – by Marc Frank (Reuters U.S. – September 10, 2013)


HAVANA, Sept 10 (Reuters) – Cuban nickel industry revenues were well below expectations in the first six months of the year, mainly because of low international prices, official radio reported this week.

The provincial radio station of Eastern Holguin province, Radio Angulo, reporting on a visit to Moa municipality by provincial Communist Party leader Luis Torres Iribar, said the municipality’s exports were short 26 percent, or $90 million, for the period.

Cuba’s only two nickel plants, the Cubaniquel-owned Ernesto Che Guevara plant and the Pedro Soto Alba, a joint venture between Canadian mining company Sherritt International and Cubaniquel, are both located in Moa.

The report said that the Ernesto Che Guevara plant’s earnings were 15 percent below expectations, and the Pedro Soto Alba plant was down 25 percent, “mainly due to the low price of the mineral on the world market.” Cuba plans to produce around 62,000 tonnes of unrefined nickel plus cobalt in 2013, according to local and foreign company reports.

Sherritt International has said it expects the Pedro Soto Alba plant to produce 38,000 tonnes, similar to 2012. An Ernesto Che Guevara manager said earlier this year the plant would produce 23,700 tonnes.

State monopoly Cubaniquel and Sherritt are also partners in a Canadian refinery where output from the Pedro Soto Alba plant is shipped, and after refining the product is marketed by yet another venture between them.

China and Europe also purchase Cuban nickel products, the country’s most important exports and one of its top foreign exchange earners after technical services and tourism.

A joint venture ferronickel plant under construction in Moa with Venezuela was scheduled to open by 2014, but construction has now been put on hold.

The 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.

Ferronickel is an iron-nickel combination mostly used in steel making.

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 had around one-third of the world’s known reserves.

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