Cuban nickel industry still not at capacity

Cuban nickel industry still not at capacity
Published on Tuesday, September 30, 2008

HAVANA, Cuba (Reuters): The Cuban nickel industry is still operating at
below capacity more than three weeks after taking a direct hit from
Hurricane Ike, according to local media from the nickel region of
eastern Holguin province.

Luis Garcia, director of the Ernesto Che Guevara plant in Moa Holguin,
told the local Communist party newspaper Ahora that capacity was
gradually being restored since opening last week, but was yet to be
fully reached.

"We never thought an event of Ike's magnitude would strike. First we
were without water, then the winds took off the roof and rain fell on
the controls," this week's paper quoted him as saying.

Ahora reported the plant lost 12,000 square meters of roofing and walls.

The Caribbean island is one of the world's largest nickel producers, at
75,000 tonnes of unrefined nickel per year, and supplies 10 percent of
the world's cobalt, according to the Basic Industry Ministry.

Category Two Ike hit Cuba at Holguin's northern coast, where the nickel
industry's three processing plants are located, seriously damaging
housing and buildings and swamping the area with torrential rains and a
storm surge.

Alberto Panton, director of state-run Cubaniquel, told Ahora, "We
emphasized checking the automatic controls, the electrical systems, and
communications, because the worst damage was to the roofs of the plants
and workshops and that humidity got into the technology.

Last week, the government said all three plants were operating.

Cubaniquel owns the Che Guevara plant, with a capacity of 33,000 tonnes,
and the Rene Ramos Latourt plant at Nicaro Holguin, Cuba's oldest with
capacity of 10,000 to 15,000 tonnes.

The Pedro Sotto Alba plant, also in Moa Holguin, and a joint venture
between state-run Cubaniquel and Canadian Sherritt International (S.TO:
Quote, Profile, Research, Stock Buzz), resumed operations just under two
weeks ago.

The Pedro Sotto Alba plant is Cuba's most efficient, with a capacity of
33,000 tonnes of unrefined nickel plus cobalt per year.

The Che Guevara plant suffered the most damage from the storm and there
was no information on if the two other plants were at full capacity.

Nickel is essential in the production of stainless steel and other
corrosion-resistant alloys. Cobalt is critical in production of super
alloys used for such products as aircraft engines.

Nickel emerged as Cuba's biggest export earner in 2000. It garnered more
than $2 billion in 2007, with almost all output destined for Canada,
Europe and China.

Cuban nickel is considered to be Class II, with an average 90 percent
nickel content.

Cuba's National Minerals Resource Center reported that eastern Holguin
province counted 34 percent of the world's known reserves, or some 800
million tonnes of proven nickel plus cobalt reserves, and another 2.2
billion tonnes of probable reserves, with lesser reserves in other parts
of the country.

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