Cuba seeks to revive mining sector

Mining machinery work at an area being prepared to be used by the lead and zinc mine Castellanos in Minas de Matahambre, Cuba, July 20, 2017. (REUTERS)
Updated 22 July 2017

Cuba seeks to revive mining sector

MINAS DE MATAHAMBRE, Cuba: A new lead and zinc mine in northwestern Cuba is on track to start production in October as part of the Caribbean island’s attempt to breathe fresh life into its mining sector, the joint venture Emincar overseeing the project said this week.
While nickel exports are already one of Communist-run Cuba’s main foreign currency earners, the cash-strapped country has untapped potential in other mineral deposits, according to the US Geological Survey.
The $278 million Castellanos mine will produce annually 100,000 tons of zinc concentrate and 50,000 tons of lead concentrate, said executives at Emincar, the venture between Swiss-based commodities giant Trafigura and Cuban state firm Geominera.
“We are reviving the small and medium-size mining sector in Cuba from this investment,” said Justo Hernández Pérez, Emincar deputy general manager, during a visit by foreign journalists on Thursday to the mine in the province of Pinar del Rio.
“This is just the start.”
Many mines, including a gold mine at the site of the new Castellanos mine, were abandoned in the 1990s and 2000s in the wake of the fall of the Soviet Union, the collapse of the economy and low commodities prices.
“We are now exploiting the deposit below oxide cap,” said Emincar general manager Jose Vila, adding that it could prove profitable to once more mine for gold there.
The Castellanos mine holds reserves for 11 years of exploitation, while the nearby Santa Lucia deposit has enough for another 10 years, Vila said. Emincar will go on to exploit that deposit, tweaking its factory accordingly, once the Castellanos mine is exhausted.
In its annual investment portfolio released late last year, Cuba published dozens of opportunities for foreign investors to explore, exploit and commercialize precious metals, base metals and other minerals of interest.
Cuba hopes foreign investment will boost its economy, which managed to climb out of a recession in the first half of 2017. The island is under severe strain due to lower exports and a drop in cheap oil shipments from ally Venezuela.
The Castellanos mine will employ nearly 500 workers. The average monthly wage at around $50, plus $80 in pay for good performance, is well above the average state wage of $30.
“This is a village that didn’t have much work,” said Guillermo Fabelo, a mechanic at the new mine whose father was a miner. “And this a project that will get many people back on their feet.”


Barclays sees $2 per barrel impact to oil prices as coronavirus fears threaten demand

Updated 8 min 48 sec ago

Barclays sees $2 per barrel impact to oil prices as coronavirus fears threaten demand

  • More than 100 people have died and over 4,000 cases of the new virus have been confirmed in China
  • Barclays expects the OPEC and other allies to step in and take further measures to keep the markets tight

BENGALURU: Barclays said on Tuesday oil prices will be impacted by $2 per barrel on the potential economic fallout from the coronavirus outbreak in China.
More than 100 people have died and over 4,000 cases of the new virus have been confirmed in China, leading authorities to increase preventive measures, impose travel restrictions and also extend the Lunar New Year holidays to limit the spread of the virus.
The bank sees a $2 per barrel downside to their full-year Brent and WTI forecasts of $62 per barrel and $57 per barrel, respectively.
Compounding the effects of the spillover to economic growth from China and the region, Barclays expects transitory oil demand erosion of about 0.6-0.8 million barrels per day (mb/d) in the first quarter of this year, or 0.2 mb/d for the full year.
“If air passenger traffic in China declined by half in first quarter of 2020, it would likely lead to a 300,000 barrels per day year on year decline in jet-kerosene demand from China,” the bank said adding the fall in road transport would likely be less severe than in the past given reduced reliance on buses.
Barclays expects the Organization of the Petroleum Exporting Countries and other allies to step in and take further measures to keep the markets tight, in case the fall in demand is more acute.
Oil prices have been down for the last six sessions, but the bank said that the market reaction was likely overdone.
Barclays said the actual economic fallout from the coronavirus could be less severe than the 2003 SARS outbreak, given that the new virus seems less lethal than SARS so far and the measures taken by Chinese authorities.
The bank said the geopolitical risks to global supplies remain high as US-Iran tensions could continue to gradually escalate and oil production in Libya could fall further if the blockade of key infrastructure facilities continues.
Brent crude prices are currently trading around $59 per barrel and US WTI at around at $53 per barrel.