Sherritt International will temporarily lay off about 280 employees, 47% of its Canadian workforce, for about three months. Its Fort Saskatchewan nickel and cobalt refinery in Alberta has been idle since June, when feed from its Cuban joint venture ran out.
At a glance
- US sanctions on business in Cuba forced Sherritt to suspend direct participation in its Cuban joint venture in May.
- In October it received the first of several US emergency licences needed to restart operations in Cuba and Canada.
- Ammonia fertiliser and sulphuric acid production will continue during the layoffs.
Background
Sherritt International mines nickel and cobalt in Cuba through the Moa joint venture and refines the material at Fort Saskatchewan, Alberta. Cuba has faced fuel shortages since the US cut off its access to Venezuelan oil in January. The US Treasury's Office of Foreign Assets Control (OFAC) issues licences that allow dealings otherwise barred by US sanctions.
What happened
Sherritt International will temporarily lay off about 280 employees, or 47% of its Canadian workforce, the company said. The layoffs are expected to last about three months, Mining Weekly and The Canadian Press reported.
Production and sales of ammonia fertiliser and sulphuric acid will continue, along with necessary maintenance and environmental and safety work. Interim chief executive Peter Hancock said workers may be recalled sooner if refining can restart earlier.
Why the refinery is idle
The Fort Saskatchewan refinery stopped in June after it ran out of feed from the Moa joint venture in Cuba. Moa's operations were paused as Cuba faced fuel shortages after the US cut off its access to Venezuelan oil in January, The Canadian Press reported.
In May, US sanctions on people doing business in Cuba forced Sherritt to suspend its direct participation in the joint venture. It has operated with constrained liquidity since then, and the layoffs are meant to preserve cash.
What comes next
In October, Sherritt received the first of a series of emergency licences from the US Treasury's Office of Foreign Assets Control. These are needed to restart mining and processing in Cuba and refining in Canada.
Hancock said the company aims to return Sherritt to its position as an important producer of nickel and cobalt for North America's critical minerals supply chain.
Our read
Outlook: neutral. Sherritt's refinery has been idle since June, so the layoffs do not change current nickel supply.
What to watch
- Further US emergency licences needed to restart operations.
- Fuel deliveries to the Moa operations in Cuba.
- Whether Sherritt recalls workers before the three months end.
For information only, not investment advice.
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Detailed analysis
Government Policies
US sanctions on Cuba forced Sherritt to suspend its direct role in the Moa joint venture.
Geopolitical Risks
Fuel shortages in Cuba, after the US cut off Venezuelan oil, halted Moa's operations.
Refinery Output
Sherritt's Fort Saskatchewan refinery has produced no nickel or cobalt since June.
What could lift prices
- Sherritt's refinery stays shut until Cuban feed can resume.
- A restart needs several more US emergency licences.
What could weigh on prices
- Sherritt has received its first US emergency licence toward a restart.
- A restart would bring Sherritt's nickel and cobalt back to the market.
Country impact
| Country | Impact | Reason |
|---|---|---|
| Canada | High | About 280 workers in Canada face temporary layoffs. |
| Cuba | High | Feed from the Moa joint venture stopped amid fuel shortages and sanctions. |
| United States | Medium | US sanctions and licences decide when Sherritt can restart. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Metals Processing | Negative | The Fort Saskatchewan refinery has been idle since June. |
Who gains, who loses
- Competing nickel refiners: Sherritt's refined nickel stays off the market while its refinery is idle.
- Sherritt's Canadian employees: About 280 workers face a layoff of around three months.
Other ways this could play out
- If more licences arrive quickly, Sherritt could recall workers early and restart refining.
- If licences or fuel supplies are delayed, the layoffs could last longer than three months.
Price risks
- A Sherritt restart would add refined nickel and cobalt supply.
- Changes in US policy toward Cuba could alter the restart timeline.
Technical view
Price is mixed relative to its 20-period and 50-period moving averages, showing no clear trend alignment.
Computed from metalscost.com's own stored price history.
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