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Cuba poised for new mining investments with growing demand for electric cars

In the midst of a slumped tourism industry largely due to the COVID-19 pandemic, the Spanish-Caribbean island of Cuba which ranks fifth on the list of the world’s top cobalt producing countries is attracting foreign investment in the mining industry.

Today, the metal is considered one of the world’s essential elements as the demand for rechargeable batteries has risen sharply.


The West Indian nation, which has a corporate tax rate of just 15 per cent, accounts for 2.5 per cent of the global share with production of 3,500 tonnes in 2019. The metal is growing in significance as efforts accelerate to cut carbon emissions through deep electrification in countries around the world. With the excitement of electric cars, significant interest in the battery metal has peaked.

According to Bernstein analyst Mark Newman, “production of electric vehicles is estimated to climb to at least 1.3 million and could reach 1.5 million depending on market conditions this year.”

The lithium-ion battery that power electrical cars require lithium, graphite, and cobalt, among other raw materials.

Demand is expected to keep rising as the shift toward electric cars continues.

“In the mid-1990s, only 1 percent of cobalt was used in electronics, but now “around 10 percent of global cobalt production goes into smartphones,” according to Marc Grynberg, CEO of electric car battery maker Umicore.

Bulldozer used in mining work.

Analysts expect this number to continue to rise due to increased demand for electric cars, smartphones and other electronics that require rechargeable batteries.

Given those factors, foreign investment in Cuba’s mining industry could be in line for further expansion following recent partnership deals.

It’s particularly interesting to see how much the Cuban Government will prioritize foreign investment in mining production to diversify the economy amidst the COVID-19 pandemic and the fallout of the tourism sector. The country has signed at least two partnership or joint venture (JV) agreements with overseas companies in the past six months.

While mining remains a state-controlled activity in Cuba, foreign companies have been active in the sector through JVs for decades.

The Moa Region to the east of Cuba is home to a joint venture between Canadian miner Sherritt International (50%) and Cuba’s state-run General Nickel Company (50%) which produces the metal via open pit mining system to mine lateritic ore, which is processed into mixed sulfides containing nickel and cobalt using high-pressure acid leaching.

Moa Joint Venture

The partnership produced 31,506t nickel and 3,370t cobalt last year with deposits transported to Canada to be refined at a facility in Fort Saskatchewan, Alberta.

New Joint Venture

Two JV deals have been sealed in the country by Australian mining companies in recent months. In September, Caribe Metals Corporation and Cuban state-run miner Geominera formed the Minera del Sur JV, focused on tailings at historical copper mine El Cobre.

In December, Caribe signed an agreement with Commercial Caribbean Nickel, a Cuban trading company, to study the feasibility of the Cajálbana nickel-cobalt project in Pinar del Río province.

Australian firm Antilles Gold is also planning to advance the La Demajagua open pit gold-silver project in Cuba.

“The Caribe deals could result in combined investments of around Aus$650m (US$502m),” stated Remo Moretta, Australia’s ambassador to Cuba, at a webinar hosted by the Australia-Latin America Business Council in February.

Office of Cubaniquel, a Cuban state-owned company responsible for mining cobalt and nickel of which Cuba is one of the world’s leading producers

Cuba has the third-largest known reserves of the metal, measured at 500,000 tonnes, the majority of which are located in the Moa region and are extracted alongside nickel mining operations.

The country’s state-owned nickel miner, Cubaniquel, is the sole operator of the massive Che Guevara processing plant at Moa.

Despite the demand for the base metal for electric cars, the slowing of economies around the world could short circuit production and demand.

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