On Monday, Canadian firm Sherritt International Corporation (TSX: S) announced its intention to continue its operations in Cuba following a massive blackout that began on October 18, 2024, which continues to disrupt several economic sectors. Despite the challenges posed by the power outage and adverse weather conditions from Hurricane Oscar in the eastern part of the island, the company confirmed in a statement that it is sticking to its 2024 projections for Cuba. The nation has been repaying a $260 million USD debt to Sherritt with cobalt since 2023.
The Moa nickel mine and all Energas S.A. facilities returned to full operational capacity on October 27, the statement revealed. After the blackout, the Moa mine initially ran at 50% to 60% capacity, using on-site generated power. The production of mixed sulfides was not significantly impacted, the company detailed.
Proactive Measures and Strategic Planning
Sherritt's refinery in Alberta had strategically stockpiled feed inventory earlier in the year, ensuring a reliable supply for finished nickel production. Meanwhile, Energas resumed partial operations on October 19, although some temporary disruptions persisted due to the complexity of the electrical grid.
Energas and Its Role in Restoring Power
Energas played a vital role in restoring power to the Cuban national grid, operating combined cycle plants that generate low-cost electricity from domestic natural gas. During the nationwide blackout, all environmental protection and safety activities at Cuban sites continued uninterrupted, with no reported environmental incidents or injuries among personnel. Sherritt is a global leader in hydrometallurgical processes for mining and refining nickel and cobalt, metals deemed crucial for the energy transition.
The company has a projected 25-year lifespan for its Moa Joint Venture and has launched an expansion program aimed at increasing mixed sulfide production by approximately 20%. Through its stake in Energas S.A., Sherritt is the largest independent power producer in Cuba, with an installed electrical generation capacity of 506 MW, accounting for around 10% of the national electricity capacity.
Cuba's Energy Crisis: An Unsettling Reality
Despite these developments, the reality remains that the national electro-energy system (SEN) is precarious, amid total and partial collapses that complicate recovery efforts in eastern Cuba. Millions of Cubans have been enduring power outages lasting more than 12 hours daily for months.
Since January 1, 2023, Cuba has been paying its $260 million USD debt to the Canadian mining company with cobalt through "cobalt swap" agreements, which are set to continue for five years.