Cuban nickel industry still not at capacity

HAVANA, Sept 29 (Reuters) - The Cuban nickel industry is still operating at below capacity more than three weeks after taking a direct hit from Hurricane Ike, according to local media from the nickel region of eastern Holguin province.

Luis Garcia, director of the Ernesto Che Guevara plant in Moa Holguin, told the local Communist party newspaper Ahora that capacity was gradually being restored since opening last week, but was yet to be fully reached.

"We never thought an event of Ike's magnitude would strike. First we were without water, then the winds took off the roof and rain fell on the controls," this week's paper quoted him as saying.

Ahora reported the plant lost 12,000 square meters of roofing and walls.

The Caribbean island is one of the world's largest nickel producers, at 75,000 tonnes of unrefined nickel per year, and supplies 10 percent of the world's cobalt, according to the Basic Industry Ministry.

Category Two Ike hit Cuba at Holguin's northern coast, where the nickel industry's three processing plants are located, seriously damaging housing and buildings and swamping the area with torrential rains and a storm surge.

Alberto Panton, director of state-run Cubaniquel, told Ahora, "We emphasized checking the automatic controls, the electrical systems, and communications, because the worst damage was to the roofs of the plants and workshops and that humidity got into the technology.

Last week, the government said all three plants were operating.

Cubaniquel owns the Che Guevara plant, with a capacity of 33,000 tonnes, and the Rene Ramos Latourt plant at Nicaro Holguin, Cuba's oldest with capacity of 10,000 to 15,000 tonnes.

The Pedro Sotto Alba plant, also in Moa Holguin, and a joint venture between state-run Cubaniquel and Canadian Sherritt International (S.TO), resumed operations just under two weeks ago.

The Pedro Sotto Alba plant is Cuba's most efficient, with a capacity of 33,000 tonnes of unrefined nickel plus cobalt per year.

The Che Guevara plant suffered the most damage from the storm and there was no information on if the two other plants were at full capacity.

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.

Nickel emerged as Cuba's biggest export earner in 2000. It garnered more than $2 billion in 2007, with almost all output destined for Canada, Europe and China.

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 counted 34 percent of the world's known reserves, or some 800 million tonnes of proven nickel plus cobalt reserves, and another 2.2 billion tonnes of probable reserves, with lesser reserves in other parts of the country. (Reporting by Marc Frank; Editing by John Picinich)