Cuba convicts 12 of corruption in nickel industry

Published by MAC on 2012-08-28
Source: Reuters, Associated Press

Cuba convicts 12 of corruption in nickel industry

Peter Orsi

Associated Press

21 August 2012

HAVANA - A Cuban court has convicted a dozen people of corruption, including high-ranking government officials, an executive at a state-run nickel company and workers from a project operating under a Cuban-Canadian joint concern, official media announced Tuesday.

In a case involving a contract for the expansion of the Pedro Soto Alba nickel and cobalt processing plant at the Moa mine, the sentences range from four to 12 years, the Communist Party newspaper Granma reported.

The court in the eastern province of Holguin took into account "the gravity of these acts and their harmful consequences in one of the strategic activities for the nation's economy, and the conduct of the accused, characterized by the loss of ethical values and deception," the bulletin read.

The announcement was the first official confirmation of a probe that since last year has been the source of rumor and private discussion by diplomats on the island, part of a wider crackdown on graft that has caught up several foreigners and sent a chill through the small foreign business community.

The stiffest prison terms were handed down to Alfredo Rafael Zayas Lopez (12 years), Ricardo Gonzalez Sanchez (10 years) and Antonio Orizon de los Reyes Bermudez (eight years), all former vice ministers at the Ministry of Basic Industry, which oversees nickel production.

Cristobal de la Caridad Saavedra Montero, business director of state-run Cubaniquel, was given six years.

Accounting executive Alfredo Barallobre Rodriguez and deputy production director Orlando Carmenaty Olmo of Empresa Moa Nickel SA., were sentenced to six and five years, respectively.

The Moa Joint Venture that controls the mining operation is operated in tandem by Cuba and Toronto-based mining company Sherritt International Corp.

Sherritt representatives did not immediately reply to phone and email messages seeking comment.

Moa currently produces 37,000 tons of nickel and cobalt per year, according to Sherritt's website.

Six other people also were sentenced. All can appeal.

Two foreign business executives told The Associated Press in November that the same probe had led to the shuttering of Canadian companies Tri-Star Caribbean and Tokmakjian Group as well as the investment firm Coral Capital Group, headed up a Briton.

Two Canadians and a Czech who were reportedly detained in the case were not listed Tuesday among those convicted.

Nickel production is one of Cuba's main sources of foreign income, along with tourism. In April a senior government official said the mineral accounted for 30 percent of exports in 2011, which would put nickel revenues at $1.8 billion for the year based on recently released overall export figures.

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Former Cuban officials get prison terms for corruption

Marc Frank

Reuters

August 21 2012

HAVANA - Three former vice ministers in Cuba's Basic Industry Ministry and nine nickel industry executives have been sentenced to long prison terms for corruption, Cuban state media said on Tuesday.

The officials and a former head of negotiations for Cubaniquel, the state-run nickel company, received sentences ranging from six to 12 years for "crimes associated with corruption during the negotiation, contracting and execution of the expansion of the Pedro Soto Alba (nickel) plant," in eastern Cuba, according to the Communist Party newspaper Granma.

The plant, the largest of three nickel processing plants in Holguin province, is a joint venture between the government and Canadian mining company Sherritt International Corp.

There was no mention of Sherritt in the report and company officials were not immediately available for comment.

Cubaniquel and Sherritt also are partners in a Canadian refinery in Fort Saskatchewan, Alberta, where output from the Pedro Soto Alba plant is shipped for processing, then marketed by another joint venture between them.

The nickel plant in Cuba underwent a major expansion during the last decade to boost output from 32,000 tonnes per year to an expected 38,000 tonnes in 2012.

The case is one of a number of high level corruption probes, covering just about every sector of the Cuban economy, undertaken by President Raul Castro since he took over for his ailing brother Fidel in 2008.

Several foreign companies doing business in Cuba have been shut down and their top executives detained or jailed in the campaign against corruption, which is so extensive on the island that Castro has termed it a threat to the socialist system.

Top Export Industry

The Cuban nickel industry has been the subject of a number of investigations over the last few years as output declined.

Two years ago police dragged several officials involved in the scandal away in handcuffs from their offices in Havana, causing consternation among employees.

Soon afterwards, police began arresting nickel executives in Moa, Holguin, heart of the nickel industry.

The three vice ministers included Alfredo Rafael Zayas Lopez, who served in that capacity from 2004 to 2007, Ricardo Gonzalez Sanchez (2001-2004) and Antonio Orizon de Los Reyes Bermudez (1980-1999). Respectively, they received sentences of 12 years, 10 years and eight years.

The Cubaniquel executive, Cristobal Saavedra Montero, was sentenced to six years in prison. The eight other executives received sentences of up to eight years, Granma said.

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

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.

Nickel is Cuba's leading export product and its third largest hard currency earner after the export of medical services and tourism. The government has not reported annual production of unrefined nickel plus cobalt since output dipped well below 70,000 tonnes in 2010.

Cuba produced 70,100 tonnes in 2009 and 70,400 tonnes in 2008, after averaging between 74,000 and 75,000 tonnes during much of the decade.

Nickel is essential for producing stainless steel and other corrosion-resistant alloys. Cobalt is critical in the 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.