Sherritt Nickel Production Slumps as Moa Shutdown Starves Canadian Refinery

Sherritt International

Sherritt nickel production fell sharply in the first quarter after fuel shortages halted mining at the company’s Moa joint venture in Cuba. Finished nickel output dropped by 36% to 1,885t from 2,947t a year earlier.

Sherritt nickel production was hit by the collapse in mixed sulfide precipitate output at Moa, which supplies the company’s Fort Saskatchewan refinery in Canada. Finished cobalt production also fell by 34% to 213t.

Sherritt nickel production problems have now moved beyond quarterly underperformance. Feed inventories at Fort Saskatchewan were depleted on 22 June, forcing the refinery into a shutdown state with no restart date disclosed.

The disruption highlights a structural weakness in Sherritt’s supply chain. Canadian refining capacity depends on a single Cuban feed source that is exposed to fuel shortages, sanctions and political risk.

Moa Feed Collapse Cuts Nickel and Cobalt Output

Mixed sulfide precipitate production at Moa fell by 43% year on year to 1,811t in the first quarter after mining operations were suspended in February.

Moa operates as a 50:50 joint venture between Sherritt and Cuba’s General Nickel Company. Ore is mined and processed into MSP in Cuba before being shipped to Alberta for refining into finished nickel and cobalt.

Lower MSP availability forced Sherritt to reduce refinery utilisation during the quarter. The company did not secure replacement feedstock from alternative suppliers.

Finished nickel sales fell by 35% to 2,244t, while cobalt sales dropped to 203t from 456t a year earlier.

The declining volumes show how quickly an upstream interruption can affect downstream refining. Without sufficient MSP inventory, Fort Saskatchewan cannot maintain normal output regardless of its installed refining capacity.

The company exhausted its remaining feedstock on 22 June and is moving the refinery into shutdown. Maintenance will be carried out during the idle period, but Sherritt has not indicated when Moa can resume production.

Sanctions Add Strategic Risk to Sherritt’s Supply Chain

The operating disruption has been compounded by sanctions uncertainty. Sherritt suspended direct participation in the Moa joint venture on 7 May after the US expanded sanctions on Cuba.

The company initially considered fully dissolving the joint venture but later reversed that decision after consulting advisers, stakeholders and government authorities.

This leaves Sherritt in a difficult position. Its key refining asset remains operationally dependent on Moa, while its ability to participate directly in the Cuban operation is constrained.

Financial performance reflects the disruption. Sherritt reported a C$9.2mn loss in the first quarter on revenue of C$34mn, down 11% from a year earlier.

The company has also announced plans for US investment firm Gillon Capital to acquire 55% of its shares, adding a corporate restructuring element to the supply disruption.

For nickel and cobalt markets, the immediate tonnage loss is modest relative to global supply. But the case is strategically important because it shows that processing assets in Canada can still be vulnerable when their feedstock remains tied to a politically exposed jurisdiction.

The Metalnomist Commentary

Sherritt’s problem is no longer simply lower Moa production; it is a broken mine-to-refinery chain. Fort Saskatchewan shows why western refining capacity needs diversified and politically secure feedstock, not just domestic processing assets.