Cuba to cut nickel plant output for major overhaul

Cuba to cut nickel plant output for major overhaul

Mon Feb 3, 2014 2:22pm EST



Feb 3 (Reuters) - Cuba will reduce production at one of its two nickel

plants this year so it can carry out maintenance and capital

improvements to make the plant competitive at low international prices.



A report on the evening government newscast on Sunday said the Ernesto

Che Guevara processing facility in eastern Holguin province would be

given a major overhaul.



The state-owned plant, built with Soviet technology and opened in 1986,

has a capacity of about 30,000 tonnes of unrefined nickel plus cobalt a

year at a cost of more than $12,000 a tonne.



Spot nickel prices on the London Metals Exchange opened at $13,695 a

tonne on Monday.



The broadcast quoted the plant's head of maintenance as saying it would

be the biggest overhaul in the plant's 28-year history and that workers

face the challenge of producing 14,700 tonnes of unrefined nickel plus

cobalt while it is taking place.



"2014 is a very complicated year for the Cuban economy ... and the world

economy and the cost of production has to be reduced," the maintenance

manager was quoted as saying.



Cuba's most important plant, the Pedro Soto Alba, also in Holguin,

remains open. The facility is a joint venture of Canadian mining company

Sherritt International and state monopoly Cubaniquel.



Output at the Soto Alba plant averages around 38,000 tonnes a year at a

cost of $5,000 to $7,000 a tonne.



Cubaniquel and Sherritt are also partners in a Canadian refinery to

which output from the Pedro Soto Alba plant is shipped. After refining,

the product is marketed by yet another joint venture.



China and Europe also purchase Cuban nickel products, which are the

country's most important export and one of its top foreign exchange

earners after technical services and tourism.



Cuban unrefined nickel plus cobalt production fell short of its

62,000-tonne target last year, the government said, without providing

details.



The Caribbean island is one of the world's largest nickel producers and

supplies 10 percent of the world's cobalt, according to the government.



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 says Holguin province accounts

for more than 30 percent of the world's known nickel reserves, with

lesser reserves in other parts of the country.



Source: Cuba to cut nickel plant output for major overhaul | Reuters -

http://www.reuters.com/article/2014/02/03/metals-cuba-nickel-idUSL2N0L812L20140203