Sherritt to End Operations at Cuban Mining Joint Venture Due to US Sanctions

Sherritt International Corp. Seeks to Dissolve Nickel Mining Joint Venture in Cuba

Canadian metals producer Sherritt International Corp. has announced plans to dissolve its nickel mining joint venture with Cuba's General Nickel Company SA, citing US sanctions as the reason. The company's decision comes after US President Donald Trump signed an executive order earlier this month targeting non-US individuals and entities doing business in Cuba.

The joint venture, which operates the Moa nickel mine and a Canadian metals refinery, has been a significant investment for Sherritt, which has been mining cobalt and nickel in Cuba since the 1990s. However, the company is now seeking to break up the partnership and gain full ownership of the refinery in Fort Saskatchewan, Alberta. As part of the deal, Sherritt is offering to relinquish its 50% stake in the Cuba mine in exchange for the refinery.

In addition to the refinery, Sherritt is also seeking a C$277 million equalization payment from its Cuban partner due to the difference in value between the mining assets and the refinery. The company will also surrender its interest in Energas, an energy business in Cuba. The process of dissolving the joint venture is expected to take months or even years, and Sherritt is seeking a court order to accelerate the breakup.

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The company's shares rose 4.6% to 11.5 Canadian cents as of 1:36 p.m. in Toronto. Sherritt has been in turmoil since the US sanctions were imposed, with a wave of departures including three board members, the chief financial officer, and a more than 50% drop in its share price. The company had also announced earlier this week that it would be unable to release its first-quarter results as scheduled on May 15.

Note: The table above compares the share price drop and number of board members departed by Sherritt International Corp. due to the US sanctions.