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Sherritt, Cuba to Spend
$450 Mln to Boost Mine Output
March 4 (Bloomberg)
-- Sherritt International Corp., which produces
nickel and cobalt, and Cuba plan to spend
as much as $450 million to boost production
by almost half at a mining joint venture
in the country.
Combined annual output of nickel and cobalt
will rise by 16,000 tons to 49,000 tons
when expansion is completed in 2007, Toronto-based
Sherritt said today in a statement.
The Cuban government and Sherritt will
share the cost equally. Previously, the
company provided all the initial funding
for joint projects with Cuba, Jowdat Waheed,
Sherritt's chief executive, said on a conference
call with investors. Nickel prices have
surged 24 percent in the past year.
``The sea change is that the government
decided on the strength of the economics
to fund their share,'' Waheed said on the
call. The expansion ``offers the best economics
of any nickel project that has been announced,''
he said.
Cuba also agreed to grant concessions for
ore reserves for 25 years at the expanded
rate of production, the company said in
the statement. Sherritt and Cuba will also
assess expanding output by an additional
32,000 tons, Sherritt said.
The Mao operation, jointly owned Sherritt
and state-owned Cubaniquel, is 500 kilometers
(300 miles) east of Havana, Reuters reported
earlier. Cuba last year produced 76,000
tons of nickel, used to make stainless steel,
the news agency said.
Sherritt said net income in 2004 almost
doubled to a record C$160 million ($123
million) from C$83.2 million in 2003 because
of higher metal and coal prices. Sales increased
20 percent to C$1.09 billion.
Shares in Sherritt rose 1
cent to C$10.66 on the Toronto Stock Exchange.
They have risen 42 percent in the past year,
giving Sherritt a market value of C$1.39
billion.
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