Bush plan targets Cuban nickel ALAN FREEMAN

Bush plan targets Cuban nickel ALAN FREEMAN

Toronto Globe and Mail

10th July 2006

WASHINGTON — The Bush administration vowed Monday to crack down on nickel exports from Cuba, at least half of which are accounted for by Canada's Sherritt International Corp., alleging that the money from the sales is being “diverted to maintain the regime's repressive security apparatus.”

But Sherritt's chairman, Ian Delaney, immediately labelled the proposed actions as “nothing new” and said that the continuing U.S. embargo on the Communist nation is simply “nonsense.”

With an eye on Florida's vote-rich Cuban-American community, President George W. Bush said Monday he would go ahead with recommendations of a special government-appointed group known as the Commission for Assistance for a Free Cuba. The commission called for a range of policies aimed at strangling the regime of President Fidel Castro, including the expenditure of $80-million (U.S.) to assist political opposition and make it more difficult to provide humanitarian aid and remittances to Cubans.

The report specifically calls for a crackdown on nickel exports, which it says now account for “nearly half of the regime's current foreign income.”

“The revenue from these sales does not go to benefit the Cuban people, but is diverted to maintain the regime's repressive security apparatus and fund Castro's interventionist and destabilizing policies in other countries in the hemisphere,” the report said.

Nickel prices are near all-time highs on world commodity markets, making them an increasingly valuable export.

The commission went on to recommend establishment of “an inter-agency Cuban Nickel Targeting Task Force” whose job it will be to reinvigorate the existing nickel import certification and control regime.

State Department officials did not respond to requests for additional information on the task force's role.

Sherritt operates a joint venture with the Cuban government that last year produced 34,000 tonnes of nickel. An expansion of the facility at Moa Bay is under way, which is expected to increase output by about 50 per cent. Sherritt also produces cobalt at the same facility and is involved in oil and gas and soybean operations on Cuba as well.

The nickel is produced as a concentrate in Cuba, shipped by sea to Halifax and by rail to Sherritt's refinery in Fort Saskatchewan, Alta., where it is refined into metal and then sold internationally, primarily in Europe. It is illegal to sell it to the United States, either in pure form or included in end products.

Mr. Delaney, Sherritt's chairman, said the proposed crackdown was the “same nonsense that's been touted for years.

“There's always been more heat than light in this discussion,” Mr. Delaney continued, arguing that the idea that Cubans are hiding assets abroad is a “ludicrous joke.”

“We're dealing with a country that really has the moral high ground,” he continued.

Officers and directors of Sherritt, including Mr. Delaney, have been banned from entry into the United States under the 1996 Helms-Burton Act.

David Davidson, a mining analyst at Paradigm Capital in Toronto, said he does not believe the new measures promised by the White House will hurt Sherritt, noting that they seem to be merely a restatement of the measures included in the Helms-Burton Act.

“Sherritt has been under this cloud since 1995 when they first started delivery of the concentrate,” Mr. Davidson said.

He said that tracing Cuban-produced nickel is virtually impossible. He gave as an example Cuban nickel that is turned into stainless steel in Germany and then becomes part of a jet engine made by Rolls Royce or another major manufacturer. “How do you track that? It's impossible.”

Phillip Peters, who studies Cuba at the Lexington Institute, a Virginia-based think tank, said that what the Bush administration is attempting to do with its tougher actions against Cuba is “choosing to appeal to the most hard-line segment of the Cuban American community.”

He said he expects stopping the flow of nickel from Cuba will be extremely difficult.

At the Cuban Liberty Council, a Miami-based group that lobbies for the end of the Castro regime, Ninoska Perez decried Sherritt as a company that is using assets confiscated by the Cuban government from their original owners and is aiding a dictatorial regime.

“Obviously, they have no concern about the abuses of human rights in Cuba,” she said in an interview. “They're just out to make a buck.”

She also said she cannot understand why the Canadian government continues to encourage companies like Sherritt to invest in Cuba.