Sherritt's business in Cuba [Update]

Cuba Standard

polioro.com

CUBA STANDARD — Amid stagnation caused by low nickel prices, Sherritt International Co. and Cuban state company Cubaníquel agreed to build a third acid treatment plant at the Moa nickel mining and processing joint venture.

As the Moa facility is barely breaking even this year, the $65 million 2,000-ton/day acid plant will eliminate the need to buy sulphuric acid, reducing nickel production cost by 20 percent, the Toronto-based company predicted in its third-quarter report.

Sherritt said the Moa joint venture had obtained project financing of $65 million from a “Cuban financial institution.” Construction is to begin in the second quarter of 2014, with operations expected to start in third-quarter 2015.

Sherritt, Cuba’s largest private investor, rebounded from a $22.6 million (Canadian dollars) third-quarter loss in 2012 to a narrow profit of $1.1 million in the third quarter this year.

The higher earnings were due mainly to changes involving a nickel mining venture in Madagascar, but also to higher finished nickel sales.

Finished-nickel sales in the third quarter was 10.1 million pounds, up from 8.6 million pounds last year, finished-cobalt sales was 1 million pounds, up from 0.95 million pounds last year. The average realized price per pound of nickel was CDN$642, down from CDN$7.20 last year.

Nickel production at Moa rose 564 tons from third quarter last year to 4,573 tons this year. Cobalt production rose 10 tons to 446 tons.

Sherritt sold 1 million barrels of oil (most of it produced in Cuba), level with last year.

The company sold 130 GWh of electricity in Cuba during the third quarter, down from 154 GWh. Similar to nickel operations, Sherritt’s Energas S.A. joint operating agreement registered a small operating profit of CDN$800,000 through Sept. 30 this year.

Third-quarter revenues from operations in Cuba were CDN$85.5 million, down from CDN$88.6 million in 2012. Nine-month revenues from Cuban operations though Sept. 30 were CDN$248 million, down from CDN$270.7 million.