He said he met Diaz-Canel once at a dinner in Cuba when Prime Minister Justin Trudeau visited, but it was several years ago. By all accounts, Raul Castro hand-picked Diaz-Canel as his successor, and is expected to continue the economic reforms that are slowly opening his country\u2019s small private sector.<\/p>\n
Pathe has told investors to expect the status quo, and waited until the end of his earnings call with investors last week to even mention the change. The company stock rose 5.7 per cent on the Toronto Stock Exchange on Monday, but is down 5.4 since the new president took over.<\/p>\n
Much of Pathe’s attention has been focused on Sherritt\u2019s reduction of nearly $2 billion in debt during the past four years, and how the expansion of electric vehicle fleets is creating optimistic outlooks for nickel and cobalt \u2014 which respectively accounted for 52 and 36 per cent of its revenues in the first quarter of 2018.<\/p>\n
About Diaz-Canel, he said, \u201cThis is an orderly transition that we\u2019ve been expecting to see there for some time.\u201d<\/p>\n
Still, there are changes afoot: On Monday, Toronto-based Millbrook Minerals Inc. announced an agreement to explore for gold, silver and other metals in Cuba with a state-owned mining company. It called it \u201cthe first such agreement of its kind,\u201d because it is unrelated to nickel.<\/p>\n
To understand how Sherritt came to operate in Cuba 25 years ago is to revisit a bit of cold war history: In the 1990s, the fall of the Soviet Union, a major trading partner, wreaked havoc on Cuba\u2019s economy.<\/p>\n
In 1994, sensing opportunity, Sherritt\u2019s former chief executive Ian Delanney cut a deal with former President Fidel Castro to form a 50-50 joint venture, in which nickel and cobalt mined in eastern Cuba was sent to Sherritt\u2019s refinery in Canada.<\/p>\n
Although Pathe said the company can’t sell products to the U.S., and he can’t travel there because of his role at the company, the U.S. embargo has had little effect on its business.<\/p>\n
Sherritt also provides power for Cuba, and two parties remain on good terms. Cuba doesn\u2019t always pay Sherritt on time for its energy usage, but Sherritt tells investors it always pays: It currently owes $126 million in overdue receivables, down from $132 million in December.<\/p>\n
\u201cThey\u2019ve got a good reputation in Cuba,\u201d said Jim Lennon, a nickel analyst at Red Door Research, about Sherritt. \u201cThey provide employment, and they pay their taxes.\u201d<\/p>\n
Still, he said huge changes lie ahead for the nickel market: Currently, about three per cent of the nickel goes to electric vehicle batteries but that number could grow by five to ten times during the next decade.<\/p>\n
That may also create new dynamics between nickel producers and nickel refineries and smelters.<\/p>\n
![\"\"](\"http:\/\/wpmedia.business.financialpost.com\/2018\/04\/sherritt.jpg?w=640&h=480\")
<\/p>\nSherritt’s mining and processing facility in Moa, Cuba.<\/p>\n<\/div>\n
In March, at the Prospectors and Developers Association of Canada conference in downtown Toronto, Mark Selby, chief executive of Royal Nickel Corporation, predicted that for a complex set of reasons, including advances in how nickel can be converted into a form suitable for batteries, nickel producers will have leverage to exact better financial terms from smelters and refineries.<\/p>\n
Lennon said there are still many questions about where the nickel for batteries, and for use in stainless steel will come from and how it will be processed. But he agreed there is potential for a shift in leverage toward producers over the businesses that process nickel.<\/p>\n
Pathe said he wasn\u2019t familiar with Selby\u2019s discussion, and that he was quite comfortable with Sherritt\u2019s position in Cuba. Through its joint venture with a state-owned company, both sides own 50 per cent of the mines and refinery used to process nickel, he said.<\/p>\n
\u201cThere\u2019s still lots of ore in Cuba,\u201d said Pathe. \u201cWe fully expect to be in the nickel business in Cuba for many years to come.\u201d<\/p>\n
\u2022 Email: gfriedman@nationalpost.com<\/a> | Twitter: GabeFriedz<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":" ‘There’s still lots of ore in Cuba. We fully expect to be in the nickel business in Cuba for many years to come’<\/p>\n","protected":false},"author":578,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/7919"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/578"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=7919"}],"version-history":[{"count":1,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/7919\/revisions"}],"predecessor-version":[{"id":7921,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/7919\/revisions\/7921"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=7919"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=7919"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=7919"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}