Canadian investor bullish on Raul Castro's Cuba
Published on Tuesday, June 12, 2007
By Anthony Boadle
HAVANA, Cuba (Reuters): Cuba's largest foreign investor, Sherritt
International Corp., sees business running smoothly under acting
President Raul Castro and will push ahead with a $1.2 billion expansion
in nickel mining, and oil and electricity production.
Cuban interim President Raul Castro (R) and Ian Delaney (C) president of
the Canadian Sherrit Internationl Corporation, listen to Cuban Basic
Industry minister Yadira Garcia. AFP PHOTO
Sherritt Executive Chairman Ian Delaney said there has been no adverse
impact on the business climate since Cuban leader Fidel Castro took ill
last year and handed over provisional power to his brother.
"Raul is a very good and crisp decision-maker, so there certainly has
been no adverse change," Delaney said on Monday in a telephone interview
"For us things have continued to be good. He is a very good
administrator," said Delaney, who met with the younger Castro last week
for the opening of a power plant run by gas from coastal oil fields
operated by Sherritt.
With soaring world nickel prices, the Canadian mining and energy company
expects to complete the first phase of expansion at its Moa mine by the
end of the year, raising output to 37,000 tonnes of nickel and cobalt in
2008. Another 9,000 tonnes is to be added by 2009, with further
expansion planned for 2012. Nickel is one of Cuba's main exports.
"The operating environment in Cuba is really good. Our business is being
run well," Delaney said.
Uncertainty over Cuba's political future without Fidel Castro at the
helm has not shortened Sherritt's sights in Cuba, which could aim even
higher if oil is discovered in deep-sea Cuban waters of the Gulf of Mexico.
Delaney said Sherritt was doing additional seismic studies and would
take a decision by the end of the year on whether to drill in the four
blocks it signed up for five years ago.
Sherritt last year exported some of the heavy crude it extracts from
coastal fields and is looking to market more by building a processing
facility to desalt the oil and lower its flash point, which is too high
for international shipping.
BARRED FROM U.S.
Sherritt has expanded business in Communist Cuba despite opposition from
the United States, which for decades has sought to undermine Castro with
trade and financial sanctions.
Delaney and his wife Catherine have been banned from entering the United
States for eleven years under tightened rules adopted by Washington in
1996 to dissuade foreign companies from investing in Cuba.
"I feel highly insulted, but otherwise there has been no effect," he said.
Castro came to power in a 1959 revolution. In 1962, the United States
imposed an embargo on business transactions with Cuba, although food
exports were allowed in 2000. The embargo is being scrutinized by the
U.S. Congress, where critics say it is a relic of the Cold War that has
not changed Cuba.
The embargo has not been factored into Sherritt's plans in Cuba. "We
made all of our investments on the basis of the current political
environment, and we are quite happy with it," Delaney said.
He called the embargo cruel and said it imposed great strain on Cuba's
economy and the Cuban people while "satisfying narrow political
interests in the United States."
A task force set up by the Bush administration to stop Cuban nickel
imports into the United States has had no effect on that business,
Prices for nickel, used to make steel harder and more durable, could
remain high for many years due to demand by its largest consumers, the
United States and China, which have no significant production of the metal.
Sherritt is the world's lowest-cost nickel producer and is having a
"terrific" time with prices now ten times higher than in 1999, Delaney said.
"It's too easy to say that business is good in this high commodity
environment," he said. "For us business was good when nickel was $2 (a
pound). Recently, it traded as high as $22."