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UPDATE 1-Miner Sherritt says U.S. exports possible if Cuba embargo lifts
December 17, 2014 / 8:42 PM / in 3 years

UPDATE 1-Miner Sherritt says U.S. exports possible if Cuba embargo lifts

(Adds CEO comments, background)

By Narottam Medhora

Dec 17 (Reuters) - The United States move to normalize relations with Cuba could pave the way for Sherritt International Corp to export nickel and cobalt to one of the biggest markets in the world, the miner’s Chief Executive David Pathe told Reuters.

Sherritt shares jumped as much as 36 percent on Wednesday after President Barack Obama moved to thaw a five-decade freeze in relations between the two countries and said he would speak to the U.S. Congress about lifting the U.S. embargo on Cuba.

Toronto-based Sherritt is the largest independent natural resources company in Cuba and operates the Moa nickel mine in the eastern part of the Caribbean island state.

Due to the Cuban origin of its nickel and cobalt, the company is currently unable export to the United States, even though the metals are refined in western Canada.

“If the embargo were to be lifted, we could export some of that nickel and cobalt into the U.S. market, which is obviously one of the biggest markets in the world,” CEO Pathe said in an interview.

“It would also give us access to U.S. suppliers for mining equipment and supplies and services for our oil and gas industries.”

The company derives nearly three-quarters of its revenue from operations in Cuba and about 95 percent of its revenue from its metals business.

“Opening banking and diplomatic relations between Cuba and the U.S. could lift a layer of uncertainty off Sherritt’s operations in that country,” TD Securities analyst Greg Barnes said in a note to clients.

Barnes estimates that Sherritt’s Cuban operations represented about 60 percent of the company’s net asset value.

Some of Sherritt’s officers and directors have been barred from the United States because of the Helms-Burton Act, which sanctions companies that trade with Cuba.

Sherritt’s shares were up nearly 26 percent at C$2.85 on the Toronto Stock Exchange in late afternoon trading. They touched a high of C$3.09 earlier in the session. (Reporting by Ashutosh Pandey and Narottam Medhora in Bengaluru; Editing by Joyjeet Das and Savio D‘Souza)

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