Bush plan targets Cuban nickel

Bush plan targets Cuban nickel

ALAN FREEMAN

00:00 EDT Tuesday, July 11, 2006

WASHINGTON -- The Bush administration vowed yesterday to crack down on
nickel exports from Cuba, at least half of which are accounted for by
Canada's Sherritt International Corp., alleging that the money from the
sales is being "diverted to maintain the regime's repressive security
apparatus."

But Sherritt's chairman, Ian Delaney, immediately labelled the proposed
actions as "nothing new" and said that the continuing U.S. embargo on
the Communist nation is simply "nonsense."

With an eye on Florida's vote-rich Cuban-American community, President
George W. Bush said yesterday he would go ahead with recommendations of
a special government-appointed group known as the Commission for
Assistance for a Free Cuba. The commission called for a range of
policies aimed at strangling the regime of President Fidel Castro,
including the expenditure of $80-million (U.S.) to assist political
opposition and make it more difficult to provide humanitarian aid and
remittances to Cubans.

The report specifically calls for a crackdown on nickel exports, which
it says now account for "nearly half of the regime's current foreign
income."

"The revenue from these sales does not go to benefit the Cuban people,
but is diverted to maintain the regime's repressive security apparatus
and fund Castro's interventionist and destabilizing policies in other
countries in the hemisphere," the report said.

Nickel prices are near all-time highs on world commodity markets, making
them an increasingly valuable export.

The commission went on to recommend establishment of "an inter-agency
Cuban Nickel Targeting Task Force" whose job it will be to reinvigorate
the existing nickel import certification and control regime.

State Department officials did not respond to requests for additional
information on the task force's role.

Sherritt operates a joint venture with the Cuban government that last
year produced 34,000 tonnes of nickel. An expansion of the facility at
Moa Bay is under way, which is expected to increase output by about 50
per cent. Sherritt also produces cobalt at the same facility and is
involved in oil and gas and soybean operations on Cuba as well.

The nickel is produced as a concentrate in Cuba, shipped by sea to
Halifax and by rail to Sherritt's refinery in Fort Saskatchewan, Alta.,
where it is refined into metal and then sold internationally, primarily
in Europe. It is illegal to sell it to the United States, either in pure
form or included in end products.

Mr. Delaney, Sherritt's chairman, said the proposed crackdown was the
"same nonsense that's been touted for years."

"There's always been more heat than light in this discussion," Mr.
Delaney continued, arguing that the idea that Cubans are hiding assets
abroad is a "ludicrous joke."

"We're dealing with a country that really has the moral high ground," he
continued.

Officers and directors of Sherritt, including Mr. Delaney, have been
banned from entry into the United States under the 1996 Helms-Burton Act.

David Davidson, a mining analyst at Paradigm Capital in Toronto, said he
does not believe the new measures promised by the White House will hurt
Sherritt, noting that they seem to be merely a restatement of the
measures included in the Helms-Burton Act.

"Sherritt has been under this cloud since 1995 when they first started
delivery of the concentrate," Mr. Davidson said.

He said that tracing Cuban-produced nickel is virtually impossible. He
gave as an example Cuban nickel that is turned into stainless steel in
Germany and then becomes part of a jet engine made by Rolls Royce or
another major manufacturer. "How do you track that? It's impossible."

Phillip Peters, who studies Cuba at the Lexington Institute, a
Virginia-based think tank, said that what the Bush administration is
attempting to do with its tougher actions against Cuba is "choosing to
appeal to the most hard-line segment of the Cuban American community."

He said he expects stopping the flow of nickel from Cuba will be
extremely difficult.

At the Cuban Liberty Council, a Miami-based group that lobbies for the
end of the Castro regime, Ninoska Perez decried Sherritt as a company
that is using assets confiscated by the Cuban government from their
original owners and is aiding a dictatorial regime.

"Obviously, they have no concern about the abuses of human rights in
Cuba," she said in an interview. "They're just out to make a buck."

She also said she cannot understand why the Canadian government
continues to encourage companies like Sherritt to invest in Cuba.

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