The Fall in the Price of Nickel Contradicts the Optimism of the Cuban Government

Expert William Pitt, owner of confiscated mines on the Island, points out that companies are reducing their investments

The Commander Ernesto (Che) Guevara Nickel and Cobalt Production Company in Moa, Holguín / ACN

14ymedio bigger14ymedio, Havana, 12 April 2024 —  In a video showing a fleet of trucks, backhoes and machinery, the director of Mining in Cuba, Joaquín Ruiz Quintana, said on Wednesday that Cuba plans to export 50,000 tons of nickel this year. The amount, the manager announced without disguising his enthusiasm, will reach 100,000 tons by 2030, if business with the Canadian mining company Sherritt continues to boom.

And everything seems to indicate that it will, says Telesur, which sent a reporter to verify the results of Sherritt’s “million-dollar investments” in three mining enclaves of the Island: Moa, in Holguín; San Felipe, in Camagüey; and the Sierra de Cajálbana, in Pinar del Río. “Unfortunately, mining must be done in a sustainable way,” said Ruiz Quintana, who suggested that “care for the environment” – and, of course, the “financial persecution” of the United States – are the only limititations on mining in Cuba.

Businessman William Pitt, who has often denounced in this newspaper the Cuban government’s plunder of the Pitt-Wasmer family’s mines – several of them in Moa – is not so convinced of Ruiz Quintana’s forecasts. Pitt, who considers the data offered by the manager a mirage, is blunt: neither Sherritt nor other mining companies, such as the Australian Antilles Gold, “are going to take the chestnuts out of the fire for the Ministry of Energy and Mines.”

A metric ton of nickel is quoted at $17,439, much less than the $23,894 of a year ago for the same amount  

According to Pitt – who not only knows the mines that Fidel Castro confiscated from his family in 1960 but also has taken legal measures against Sherritt – the “growing” investments that the regime attributes to the foreign mining companies operating on the Island are plummeting. The explanation is in the world market, “where the prices of the minerals that Cuba produces have plummeted.”

The case of nickel and cobalt illustrates the situation. A metric ton of nickel is quoted at $17,439, much less than the $23,894 of a year ago for that amount. “At the current price it would be necessary to increase nickel production by 36% to achieve the same monetary income as a year ago,” Pitt explains to 14ymedio. The need to sell more at a lower price perhaps explains Cuba’s urgency to double, by 2030, the amount of nickel it plans to export this year.

In 2023, the country exported 40,000 tons, so the expected increase for 2024 is only 25%, “clearly below the level required to achieve a global production that represents a monetary increase to the country.”

Another issue – ignored by Ruiz Quintana in his interview with Telesur – is the million-dollar debt that Cuba has with Sherritt, a company whose current financial situation is not flattering either and which cannot afford to admit the Island’s delays. “These are difficult times for the company,” analyzes Pitt, who emphasizes – citing Sherritt’s most recent balance sheet – the accumulation of $173,701,615 in debts that mature in less than a year, plus $338,681,810 in debts that it will have to pay later.

To pay the debts, Sherritt has in its accounts about $87,214,200, plus the debts that it must collect from countries like Cuba, which totals $95,923,740. It is not a “healthy” situation, concludes the businessman, and analysts have already calculated that Sherritt’s growth rate will fall by 3.3%. The forecast has frightened investors.

“Nickel and cobalt have lost much of the euphoria caused by their use in electric vehicle batteries   

“Nickel and cobalt have lost much of the euphoria caused by their use in electric vehicle batteries. These batteries now use other minerals,” Pitt explains. Both metals are now used more in the manufacture of stainless steel – their classic application – or in devices and machinery.

The second point of tension between Sherritt and Cuba is energy. The company supplies three important Cuban power plants: Varadero (Matanzas), Boca de Jaruco and Puerto Escondido (Mayabeque). Havana’s non-payments to Sherritt for its management in these facilities were the reason why Cuba had to accept the so-called “exchange of cobalt”: the overexploitation of the mineral in exchange for the more than the $263 million that the regime owed.

It hasn’t been sufficient. Now Sherritt has its sights set on the deposits of Yagrumaje, Camarioca and the Delta, in Punta Gorda (Holguín), which “the Government of Cuba has granted it illegally,” warns Pitt, since they belong to the Pitt-Wasmer family, and Sherritt knows it full well.

Cuba also has problems with the mining of gold, copper and silver, of which it delivered important deposits to the Australian Antilles Gold company. These are the mines of La Demajagua, in Isla de la Juventud; Nueva Sabana and El Pilar, in Camagüey; and La Cristina and Buey Cabón, in the eastern area. The business has been fading, says Pitt, due to the “economic abandonment.”

Despite announcing with fanfare that it had closed the deal with Havana, Antilles did not even manage to raise a million dollars for the study of the Cuban deposits. Like Sherritt, the Australian company also needs money that its creditors have not paid: Dominican Republic, for example, owes them $45 million, but before disbursement they will have to wait for the result of a long judicial process against Santo Domingo, also for non-payments.

The most serious thing about the management of international mining companies in Cuba is the lack of transparency with which not only the Government but also the companies themselves conduct their businesses. For the overexploitation of Cuban deposits, a price is paid that can be expressed in dollars, but none of the parties pronounces on the environmental consequences. The damage does not cause Ruiz Quintana or the Cuban Government to lose sleep. According to Telesur, they have made the verb “overfulfill” a motto.

Translated by Regina Anavy


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