December 28, 2012 / 3:20 PM / in 6 years

Cuba closes oldest nickel processing plant

* Nicaro-based processor oldest of three in operation

* Little impact seen on overall Cuban output

* New plant to take workers

By Marc Frank

HAVANA, Dec 28 (Reuters) - Cuba has closed the oldest of three nickel plants in the country, a local Communist Party leader said, a looming event that had become the talk of the mountain town of Nicaro, in eastern Holguin, where it is located.

Nickel is Cuba’s most important export and one of its top foreign exchange earners after technical services and tourism.

“This plant’s productive role is completed and now it will dedicate its efforts to services,” Jorge Cuevas Ramos, First Secretary of the Holguin Communist Party, said in an interview with the provincial television station on Thursday evening.

A local radio report earlier in the week had also indicated the plant was closed.

“After the closing of the René Ramos Latourt plant, its director said only the mineral transportation system would be maintained so it is ready to be transferred to Moa or for a foreign company that might be interested in investing in the area,” the report said.

The Cuban nickel industry is cloaked in secrecy. National media and officials have yet to mention the plant’s closure after operating for around 70 years.

Cuba produced 69,700 tonnes of unrefined nickel plus cobalt in 2010, the last official figures available.

“This is something that has been on people’s minds for a while, because the plant has very old technology and very low efficiency,” said an office worker at the plant, who asked to remain anonymous.

“We didn’t know exactly when it would close, but eventually it would have to because it is not economically sustainable,” she said.

The Ramos Latour plant had been producing only a few thousand tonnes of unrefined nickel plus cobalt in recent years as the government struggled to keep it open and figure out what to do with Nicaro’s 15,000 residents.

Cuba will now have two nickel processing plants operating in Holguin, one a joint venture with Canadian resource company Sherritt International and another owned by state-run Cubaniquel, both located in Moa, Holguin.

Cuevas, during the interview, said Cuba’s Ernesto Che Guevara plant did not meet its 2012 plan, while the Pedro Sotto Alba plant with Sherritt had, without providing further details.

Reuters estimates this year’s output at around 65,000 tonnes of unrefined nickel plus cobalt.

A joint venture ferronickel plant under construction in Moa with Venezuela is scheduled to open in 2013, and according to local Communist Party sources will absorb some of the Ramos Latourt plant’s employees.

A commission is studying what to do with the old plant and an adjoining port, they said.

Cuba has valued the ferronickel project at $700 million and said annual processing would amount to 68,000 tonnes of ferronickel (21,000 tonnes nickel).

The Caribbean island is one of the world’s largest nickel producers and supplies 10 percent of the world’s cobalt, according to the Basic Industry Ministry.

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.

Ferronickel is an iron-nickel combination mostly used in steel making.

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 had around a third of the world’s known reserves.

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