Sherritt Nickel Production Falls as Moa Mine Halt Disrupts Canadian Refining

Sherritt Nickel

Sherritt nickel production fell sharply in the first quarter after fuel shortages in Cuba halted mining operations at the Moa joint venture. Finished nickel output dropped by 36% year on year to 1,885t, while finished cobalt production declined by 34% to 213t.

Sherritt nickel production weakness reflects disruption at the upstream end of the company’s integrated Cuba-Canada supply chain. Mixed sulfide precipitate output at Moa fell by 43% to 1,811t, reducing feed available for the Fort Saskatchewan refinery in Alberta.

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

The company has now depleted feed inventories at Fort Saskatchewan and is moving the refinery into a shutdown state, with no timeline given for a restart.

Moa Feed Shortage Forces Canadian Refinery Shutdown

The Moa operation is a 50:50 joint venture between Sherritt and Cuba’s General Nickel Company.

Ore is mined and processed into mixed sulfide precipitate in Cuba before being shipped to Fort Saskatchewan for refining into finished nickel and cobalt.

That structure makes the Canadian refinery highly dependent on uninterrupted Cuban feed supply.

Fuel constraints halted Moa mining operations in February, sharply reducing MSP production. Sherritt chose not to buy additional third-party feed, leaving the refinery dependent on existing inventory.

Those stocks were exhausted on 22 June.

The shutdown will give Sherritt time to complete maintenance, but the larger issue is the absence of a clear timeline for restoring Moa production.

Until mining and processing resume in Cuba, Fort Saskatchewan lacks the feedstock needed to return to normal nickel and cobalt output.

Sanctions Add Strategic Risk to Integrated Nickel Supply

Operational disruption has been compounded by geopolitical risk.

Sherritt suspended its direct participation in the Moa joint venture in May after the US expanded sanctions on Cuba. The company initially considered fully dissolving the partnership before reversing that plan following discussions with advisers and government stakeholders.

This creates uncertainty beyond the immediate fuel shortage.

Even if Moa mining resumes, sanctions-related restrictions could continue to complicate ownership, logistics, financing and commercial arrangements.

Sherritt’s integrated production model therefore faces both physical and political supply risk.

The company reported a first-quarter loss of C$9.2mn, improving from a C$40.6mn loss a year earlier, while revenue fell by 11% to C$34mn.

Sherritt also plans to sell 55% of its shares to Gillon Capital, adding another potential change to the company’s ownership and strategic direction.

The Metalnomist Commentary

Sherritt’s problem is no longer simply lower mine output. The Moa-Fort Saskatchewan chain shows how upstream fuel shortages and geopolitical restrictions can simultaneously disable an otherwise established nickel and cobalt processing system.