CubaNews / February 2003
By Larry Luxner
Cuba aims to produce 78,000 metric tons of unrefined nickel plus cobalt this year, up from 75,200 tons in 2002 and 76,500 tons the year before.
That’s the word from Angel Roberto Hernández, director of state nickel monopoly Cubaniquel, in a Jan. 27 interview with the official business weekly Opciones.
“We are not only going to modernize the industry to significantly reduce costs, but also expand production,” said Hernández, whose entity operates two of three processing plants in Holguín province, 800 kms east of Havana.
The two, both in Moa, are Pedro Soto Alba (formerly Moa Nickel Co.), which began production in 1960, and Che Guevara, finished in 1986 with Soviet technology. Cubaniquel also owns 50%, along with Toronto-based Sherritt International Corp., of the René Ramos Latour plant, which began production in 1943 and was formerly known as Nicaro Nickel Co.
Cuba is currently the world’s fourth-largest producer of nickel, which is essential in the production of stainless steel and other corrosion-resistant alloys. Holguín province alone has 800 million tons of proven nickel plus cobalt reserves, and another 2.2 billion tons of probable reserves, according to the country's National Minerals Resource Center.
Between 1996 and 2001, nickel and cobalt concentrates accounted for 39.5% of all Cuban exports by value. In 2001, those exports generated around $561.7 million in foreign exchange, with Canada and Western Europe among the island’s leading customers.
Yet in the past, poor efficiency has hindered the nickel industry — mainly at Che Guevara — where over 30 metric tons of oil was used to produce one ton of nickel concentrate. Heavy investments in recent years have cut the fuel expenditure at this plant by half, to the point where it consumes an average 19 tons of fuel oil per ton of nickel output.
The Pedro Soto plant, which uses an acid-leaching technology, reportedly expends $1 to produce one pound of nickel, an excellent performance by any standard.
Both facilities are being adapted to burn domestically produced crude oil instead of imported fuel, since 55% of the plants’ costs are energy-related, and burning Cuban crude saves 40% on fuel costs.
Hernández said Cubaniquel’s short-term goal is to expand both state-owned facilities so that each would soon be producing 50,000 tons of nickel plus cobalt per year.
At the Sherritt-run plant — which is undergoing a major refurbishment to replace its aging and environmentally unsafe technology — only five tons of fuel are expended to produce one ton of nickel output.
Hernández told Opciones that an 11-km-long, German-built conveyor system will soon move ore from an open-case mine higher in Holguín’s mountains to the nearly depleted Ramous Latour plant, pushing up annual output there from the current 12,000 tons to 17,000 tons by 2005.
However, all that requires major financing.
Reuters, quoting Western diplomats, says Cuba has been working for over two years to put together financing and suppliers for its nickel development plans, mainly with Great Britain, Germany and Brazil.
But no major deals have been signed due to Cuba’s notoriously poor credit history, among other factors.
Local analysts told Reuters that Cuba may now be looking to China. In early January, Miao Gengshu, the president of government-run China Minmetals Group, visited Havana in order to sign a supply deal with Cubaniquel, though no specific details were released.
According to Opciones, Cubaniquel also hopes to finish a refinery at Las Camariocas, near Moa, which was halted in 1991 after it was 85% complete. Hernández said the plant might be used to process reserves of chrome into ferronickel. Cuban nickel is considered to be Class II, with an average 90% nickel content.