Overview
Sherritt International Corp. said Friday it will pursue the dissolution of its Cuban nickel mining joint venture following the imposition of U.S. sanctions on entities doing business in Cuba. The move targets the 50% partnership with Cuba's General Nickel Company SA that operates the Moa nickel mine and an associated Canadian metals refinery.
Planned terms and legal route
The Toronto-based metals producer indicated it plans to force the breakup of the joint venture and has proposed relinquishing its half share in the Cuban mine in return for full ownership of the Fort Saskatchewan refinery in Alberta. In addition, Sherritt is seeking an equalization payment of C$277 million from its Cuban partner, saying the mining assets carry higher value. The company also intends to give up its interest in Energas, an energy business in Cuba.
Sherritt warned that, under the existing joint-venture agreements, the formal dissolution could take months or even years to complete. Because of that potential delay, the company stated it will pursue a court order to hasten the separation.
Market and corporate fallout
Shares of the company were higher intraday, rising 4.6% to 11.5 Canadian cents as of 1:36 p.m. in Toronto. The current actions follow an executive order signed earlier this month by U.S. President Donald Trump that targets non-U.S. individuals and entities conducting business in Cuba.
Sherritt said the sanctions have created considerable disruption at the company, prompting the departure of three board members and the company’s chief financial officer. The stock has suffered sharply, with the share price falling by more than 50% amid the turmoil.
Operational update
Sherritt, which has been mining cobalt and nickel in Cuba since the 1990s, also disclosed this week that it would be unable to publish its first-quarter financial results as scheduled on Friday.
Contextual notes
The company framed the proposed asset swap and equalization payment as part of an effort to disentangle its Canadian and Cuban operations in response to the sanctions. The legal effort to accelerate the breakup reflects the company’s assessment that the timeframes built into the joint-venture agreements are likely too protracted given the near-term regulatory and market pressures.
This article reports the company's announced actions and the market response, reflecting statements and figures released by Sherritt.