Cuban nickel output seen lowest in a decade

Cuban nickel output seen lowest in a decade
Wed Dec 30, 2009 11:25am EST

* National output seen between 60,000 and 65,000 tonnes
* Sherritt International venture operating at capacity
* Industry still struggling to overcome hurricane damage

By Marc Frank

HAVANA, Dec 30 (Reuters) - Cuba's unrefined nickel plus cobalt
production appears to have been between 60,000 and 65,000 tonnes this
year, the lowest in a decade, according to scattered radio reports this
week.

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

While production at Canadian mining company Sherritt International's
(S.TO) nickel venture in Cuba topped 37,000 tonnes, output at two plants
owned by state-run Cubaniquel was well below capacity.

Cuba has not announced this year's nickel output, with officials simply
stating it was less than the 70,000 tonnes planned.

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

"The Pedro Soto Alba plant met this year's plan, producing more than
37,000 tonnes of nickel, and remains open," Jorge Cuevas Ramos, the
first secretary of the Communist Party in Holguin, was quoted by
national state-run Radio Rebelde on Wednesday as stating.

Radio stations based in Holguin, where the three plants are located,
reported this week that production at the Cuba-owned Ernesto Che Guevara
plant, with a capacity of 32,000 tonnes, did not meet it's 26,000-tonne
plan.

There was no mention of output at the country's third and oldest plant,
the Rene Ramos Latourt at Nicaro Holguin, which has a capacity of 10,000
to 15,000 tonnes and is also operated by Cubaniquel.

Scattered reports this year indicated Rene Ramos Latourt and the feed
process to the plant were operating below capacity at various times, so
there were most likely production problems there as well.

Hurricane Ike, a Category 3 storm, hit Cuba in September 2008 at
Holguin's northern coast, where the nickel industry's three processing
plants are located, damaging the two Cubaniquel plants, infrastructure,
housing and buildings and swamping the area with torrential rains and a
storm surge.

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 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.
(Additional reporting by Nelson Acosta; Editing by Walter Bagley)

Cuban nickel output seen lowest in a decade | Reuters (30 December 2009)
http://www.reuters.com/article/idUSN3021507420091230?type=marketsNews