Cuba says nickel industry recovering from bad year

Cuba says nickel industry recovering from bad year
Mon Feb 7, 2011 1:59pm GMT

*Cubaniquel reports January production 4 percent above plan
*2010 output seen as lowest in a decade

HAVANA Feb 7 (Reuters) - Cuba's production of unrefined nickel plus
cobalt bounced back in January, official media reported Monday, after
perhaps the industry's worst performance in a decade last year when,
Reuters estimated, output fell to well below 70,000 tonnes.

Alberto Panton Graham, general director of state monopoly Cubaniquel,
was quoted by Eastern Holguin province's Communist party weekly as
telling visiting officials that output in January was 4 percent above plan.

The 2011 plan has not been announced by the industry or government,
which consider nickel a strategic sector and target of U.S. sanctions.

Economy Minister Marino Murillo said as 2010 drew to a close that the
nickel industry had failed to complete its production and export plan by
6,700 tonnes, costing the country $120 million, but provided no further
information.

The government's goal for the state-run industry in 2010 was never made
public after 2009 output weighed in at 70,100 tonnes. Cuba produced
70,400 tonnes of unrefined nickel and cobalt in 2008, after averaging
between 74,000 and 75,000 tonnes during much of the decade.

Cubaniquel operates three processing plants in Holguin. Two are wholly
owned by the company while the third is a joint venture with Canadian
mining company Sherritt International (S.TO: Quote).

Unrefined nickel plus cobalt is by far Cuba's leading export, almost all
production going to Canada and China.

The Caribbean island is one of the world's largest nickel producers and
supplies 10 percent of the world's cobalt, according to the Basic
Industry Ministry.

The Cuban nickel industry was the subject of a number of investigations
last year, resulting in the arrest of some plant managers and officials
at the ministry.

Minister Yadira Garca Vera was fired in October for failure to
adequately manage investments and resources.

A new minister has yet to be appointed as Communist authorities consider
dividing the ministry into separate energy and mining ministries,
according to ministry sources.

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.

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 accounted for more than 30 percent of the world's known nickel
reserves, with lesser reserves in other parts of the country. (Reporting
by Marc Frank; Editing by John Picinich)

http://af.reuters.com/article/commoditiesNews/idAFN078255420110207?sp=true