“In 2024, United States imported US$384 million of Cobalt, being the 589th most imported product (out of 1,227) in United States. In 2024, the main origins of United States' Cobalt imports were: Norway (US$84.8 million), Canada (US$73.9 million), Japan (US$52.6 million), Madagascar (US$47.5 million), and United Kingdom (US$44.9 million). The fastest growing origins for Cobalt imports in United States between 2023 and 2024 were: Madagascar (US$14.9 million), France (US$4.65 million), and Indonesia (US$3.59 million).”
Bloomberg: For many years, the DLA was a seller rather than a buyer of cobalt, as budget cuts in the 1990s and 2000s led it to sell off what had once been a giant stockpile of the metal built up during the Cold War. For many years, the DLA was a seller rather than a buyer of cobalt, as budget cuts in the 1990s and 2000s led it to sell off what had once been a giant stockpile of the metal built up during the Cold War. In recent years, however, securing supply chains for metals like cobalt has become a political priority, as officials seek to reduce reliance on China. Beijing dominates processing of cobalt and other battery metals, and has built up a significant state stockpile of its own through the National Food and Strategic Reserves Administration, more commonly known as the State Reserve Bureau. In recent years, however, securing supply chains for metals like cobalt has become a political priority, as officials seek to reduce reliance on China. Beijing dominates processing of cobalt and other battery metals, and has built up a significant state stockpile of its own through the National Food and Strategic Reserves Administration, more commonly known as the State Reserve Bureau.”
Libertad Act
The Trump-Vance Administration (2017-2021) made operational Title III and further implemented Title IV of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”).
Title III authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset. Link To Title III Filed Lawsuit Statistics
Title IV restricts entry into the United States by individuals (and immediate family members) who have connectivity to unresolved certified claims or non-certified claims. One Canada-based company and one Spain-based company are currently known to be subject to this provision based upon a certified claim and non-certified claim.
Since 1996, some directors and officers of Sherritt International Corporation, and immediate family members, have been blocked from entering the United States do to company operations in the Republic of Cuba on property potentially subject to Title III of the Libertad Act.
Sherritt International Corporation “is a world leader in using hydrometallurgical processes to mine and refine nickel and cobalt – metals deemed critical for the energy transition. Sherritt’s Moa Joint Venture has an estimated mine life of approximately 25 years and is advancing an expansion program focused on increasing annual mixed sulphide precipitate production by approximately 20% of contained nickel and cobalt. The Corporation’s Power division, through its ownership in Energas S.A., is the largest independent energy producer in Cuba with installed electrical generating capacity of 506 MW, representing approximately 10% of the national electrical generating capacity in Cuba. The Energas facilities are comprised of two combined cycle plants that produce low-cost electricity from one of the lowest carbon emitting sources of power in Cuba. Sherritt’s common shares are listed on the Toronto Stock Exchange under the symbol “S”.”
“Sherritt manages its metals, power, and oil and gas operations through different legal structures including 100%-owned subsidiaries, joint arrangements and production-sharing contracts. With the exception of the Moa Joint Venture, which Sherritt operates jointly with its partner, Sherritt is the operator of these assets.”
“COBALT
In Q2 2025, Argus Chemical Grade cobalt price closed at US$17.50/lb, unchanged from Q1 2025. The average cobalt price increased to US$17.50/lb during the quarter from US$12.77/lb in Q1 2025. Refined cobalt prices have surged since February, driven by the Democratic Republic of the Congo (“DRC”)’s unexpected four-month export ban, which was extended in June by an additional three months to September 2025. The move reversed prior negative market sentiment, pushing prices up over 50%. A potential shift to a quota system is being considered as the DRC seeks to support prices by limiting exports and strengthening artisanal mining working conditions. While government officials have expressed a commitment to maintaining a balanced market, and any further measures such as additional controls or quotas would continue to offer price support, a sustained recovery is likely to be gradual amid intrinsic oversupply.
Despite global headwinds, battery adoption is expanding across consumer electronics, with rising capacities driven by AI-related power needs (2). China's EV market remains strong, supported by affordability, policy incentives, and resilient consumer demand, although lithium-ion-phosphate (“LFP”) batteries, which contain no nickel or cobalt, are a growing portion of this market. Europe is projected to see 15% EV growth in 2025, while the U.S. is expected to grow by 6%. However, tariffs, rising costs, and the phase-out of tax credits could weigh on overall EV demand and consequently cobalt demand. Similar “tariff regions” in supply chains could develop for cobalt following the G7 pronouncements in June on critical minerals supply.
Cash in Cuba is denominated in Cuban pesos (“CUP”) and not exchangeable into other currencies unless sufficient foreign currency reserves exist in Cuba and is primarily held by Energas for use locally by the joint operation. To facilitate the conversion of CUP to Canadian dollars, the Corporation has in place the Moa Swap, which facilitates the payment of the Canadian equivalent of approximately US$50.0 million annually from the Moa JV to Energas, which Energas uses to facilitate foreign currency payments in support of the business and to pay dividends to the Corporation in Canada. In addition, the Corporation has in place the Cobalt Swap under which the Corporation receives finished cobalt and cash in Canadian dollars from the Moa JV as repayment of the GNC receivable. Energas, in turn, pays an equivalent amount to GNC in CUP under the Energas payable. The Moa JV is not directly exposed to significant risk related to the CUP, as it receives major foreign currencies from the sale of nickel and cobalt to customers outside of Cuba.
RISKS RELATED TO SHERRITT’S OPERATIONS IN CUBA
The Corporation directly or indirectly holds significant interests in mining, metals processing and the generation of electricity in Cuba. The operations of the Cuban businesses and the ability of the Cuban Government to fulfil payment obligations to the Corporation, as well as the provision of goods and services to the Cuban businesses may be affected by economic and other pressures on Cuba. Additionally, the continued general economic decline in Cuba could have an impact on the Corporation and the Cuban businesses. Risks include, but are not limited to, fluctuations in official or convertible currency exchange rates, access to foreign currency, repatriation of foreign currency, and high rates of inflation. In addition, Cuba has experienced increased hardships as a result of the impact of COVID-19 and continued U.S. sanctions, impacting the country’s tourism and other industries, hampering the country’s foreign currency liquidity and resulting in prolonged border closures, fuel, food and medicine shortages, electricity outages, skilled worker retention and shortages, and sporadic civil demonstrations. The first President Trump administration increased its sanctions against Cuba and its trading partners and these measures had an adverse impact on Cuba and its economy, as well as its ability to conduct international trade. In addition, with resulting additional adverse impacts, on January 12, 2021, that administration designated Cuba as a State Sponsor of Terrorism. While the now former U.S. administration of President Biden announced on January 14, 2025 that it would remove Cuba from the State Sponsor of Terrorism list, this decision was revoked by President Trump a few days later, on January 20, 2025, the first day of his second administration. On June 30, 2025, the Trump administration released a National Security Presidential Memorandum (“NSPM”) reaffirming its hardline stance towards Cuba, outlining a strengthened sanctions framework aimed at curbing Cuba’s access to international financing and restricting entities engaging in trade or investment in Cuban state-run industries. These measures that require further implementation from the U.S. administration signal a continuation of the administration’s policy to isolate Cuba economically and politically and may escalate the risks related to Sherritt’s operations in Cuba. Changes in regulations and political attitudes are beyond the control of Sherritt and may adversely affect its business. Operations may be affected in varying degrees by such factors as Cuban Government regulations with respect to currency conversion, repatriation of foreign currency, production, project approval and execution, price controls, import and export controls, income taxes or reinvestment credits, expropriation of property, environmental legislation, land use, water use and mine and plant safety. Cuba may also be adversely impacted by risks associated with the imposition by other countries globally of additional economic restrictions or sanctions, or the indirect impact on Cuba of sanctions imposed on other countries (such as Russia and Belarus, for example) that could have a material adverse effect on Cuba or on Sherritt’s ability to operate in Cuba. Sherritt is entitled to the benefit of certain assurances received from the Government of Cuba and certain agencies of the Government of Cuba that protect it in many circumstances from adverse changes in law, although such changes remain beyond the control of the Corporation and the effect of any such changes cannot be accurately predicted. For further information on the risks related to Sherritt’s operations in Cuba, refer to the Corporation’s 2024 Annual Information Form.
RISKS RELATED TO U.S. GOVERNMENT POLICY TOWARDS CUBA
The United States has maintained a comprehensive embargo against Cuba since the early 1960s, and the enactment in 1996 of the Cuban Liberty and Democratic Solidarity (Libertad) Act (commonly known as the “Helms-Burton Act”) extended the reach of the U.S. embargo. The U.S. Embargo In its current form, apart from the Helms-Burton Act, the embargo applies to most transactions or dealings directly or indirectly involving Cuba, its government, Cuban entities, goods derived from Cuban-origin, and Cuban nationals, and it bars all persons subject to the jurisdiction of the United States from participating or facilitating in such transactions or dealings unless authorized under general or specific licenses issued by the U.S. Department of the Treasury (“U.S. Treasury”). Persons “subject to the jurisdiction of the United States” include U.S. citizens and U.S. lawful permanent residents, regardless of where they reside or by whom they are employed; legal entities organized under U.S. laws; and entities wherever located that are owned or controlled by any of the foregoing; as well as individuals and entities located in the United States. The embargo also targets transactions or dealings directly or indirectly involving entities deemed to be owned or controlled by Cuba, including entities owned or controlled by the Cuban government, by entities organized under the laws of Cuba, or by Cuban nationals. Additionally, the embargo applies to persons and entities designated by the U.S. Treasury as specially designated nationals (“SDNs”) pursuant to the U.S. embargo against Cuba. The three entities constituting the Moa Joint Venture in which Sherritt holds an indirect 50% interest have been designated as SDNs by the U.S. Treasury. Sherritt, however, is not an SDN. The U.S. embargo generally prohibits persons subject to the jurisdiction of the United States from engaging in transactions or dealings involving the Cuban-related businesses of the Corporation and may in certain circumstances restrict the ability of persons subject to the jurisdiction of the U.S. from engaging in transactions with Sherritt more generally. Furthermore, goods, technology and software (“items”) that are subject to U.S. jurisdictions, including U.S.-origin items, non-U.S. items that include more than 10% U.S.-origin content by value, and certain non-U.S. direct products of specified U.S. technology or software, cannot under U.S. law be exported, re-exported, or otherwise supplied to Cuba or used in the Corporation’s operations in Cuba. Additionally, the U.S. embargo generally prohibits imports into the United States of Cuban-origin goods, goods located in or transported from or through Cuba, or foreign goods made or derived, in whole or in part, from goods derived from Cuban-origin, including Cuban nickel and cobalt. In 1992, Canada issued an order pursuant to the Foreign Extraterritorial Measures Act (Canada) to block the application of the U.S. embargo under Canadian law to Canadian subsidiaries of U.S. entities. However, the U.S. embargo limits Sherritt’s access to U.S. capital, financing sources, customers, and suppliers. Persons subject to the jurisdiction of the United States are advised to consult their independent advisors before acquiring common shares of Sherritt.”
Links To Related Analyses
Will Cuba See Another Mineral Export Become Less Valuable As Battery Technology Develops? While Diaz-Canel Administration Continues To Strangle Re-Emerging Private Sector. November 07, 2024
Hesitant To Engage With Cuba? Read Second Paragraph Of Forward-Looking Statements In Sherritt International Corporation's Cuba Impact Statement. Cringeworthy For Legal Counsel October 29, 2024
Government Of Cuba Revenues, Shareholders In Canada's Sherritt International Corporation Will Suffer From Low Nickel, Cobalt, Lithium Prices Expected In 2024. Cuba Consistently Owes Sherritt Money. December 29, 2023
Cuba Has Nickel And Cobalt. Vehicle Electric Batteries Use Nickel And Cobalt. Cuba Should Benefit. September 25, 2021
Cuba Owes Partner Canada's Sherritt International Corporation Tens Of Millions Of US Dollars. But, Both Cuba & Patient Company (And Shareholders) Anticipate Profitable Role With Electric Vehicles. July 03, 2021
Media References
Bloomberg (7 November 2024): The world’s No. 1 cobalt miner is sounding the alarm over the rapidly shrinking role of the metal in the energy transition. The reason is the adoption of cobalt-free lithium iron phosphate, or LFP, batteries gaining momentum in recent years because they are cheaper to manufacture. Chinese company CMOC’s bearish view of the market comes amid a glut of the metal that’s been largely created by its expansion of two huge copper-cobalt mines in the Democratic Republic of Congo.
London, United Kingdom-based NS Energy: Cuba- 500,000 tonnes: Around 7% of the world’s cobalt reserves are based in Cuba, estimated by the United States Geological Survey (USGS) at 500,000 tonnes. The country ranks fifth among the world’s largest cobalt-producing countries, with national output in 2020 of around 3,600 tonnes. Most of Cuba’s cobalt reserves are based in the east of the island in the Moa region, and are primarily extracted alongside nickel, which is a major mining business in Cuba. A joint venture between Canadian miner Sherritt International and General Nickel Company of Cuba produces the metal via open pit mining at deposits in Moa.
Financial Times
London, United Kingdom
20 July 2018
Panasonic cuts ties with supplier over Cuban cobalt fears
Japanese group concerned materials in its batteries for Tesla could fall foul of US sanctions
Panasonic has suspended ties with a Canadian supplier amid concerns that Cuban cobalt, a target of US sanctions, was used in batteries it supplied for Tesla’s electric vehicles.
The Japanese battery supplier said on Friday it did not know how much Cuban cobalt was ultimately used in the lithium ion batteries it supplied to the US market for Tesla “due to commingling of sources by its suppliers in several phases of manufacturing processes”.
The company declined to identify its Canadian supplier but a person with knowledge of Panasonic’s supply chain identified the company as Sherritt International. The Canadian company produces cobalt at the Moa mine in Cuba through a joint venture with the Cuban state-owned General Nickel Company. Sherritt declined to comment.
Panasonic said the suspension of ties was a precautionary measure following guidance from the US Treasury’s Office of Foreign Assets Control over the scope of the US ban on Cuban-origin imports, which dates back to 1960. Tesla said it had been informed by Panasonic that a small portion of Model S and Model X batteries may contain trace amounts of cobalt from Sherritt. Only some vehicles produced after February 2018 are affected, and there is no impact on battery cells produced at its gigafactory in Nevada, including for its mass-market Model 3 cars. Panasonic’s move, which was first reported by Reuters, comes as Tesla and other carmakers scramble to secure supplies for an ambitious rollout of electric cars.
The price of cobalt, more than half of which comes from the Democratic Republic of Congo, has more than doubled over the past year. It will be increasingly difficult for carmakers to meet their targets without using more cobalt from the DRC, according to Gavin Montgomery, an analyst at consultancy Wood Mackenzie in London. “To reach these kinds of aspirations in terms of gigafactory volumes [of Tesla batteries], it’s going to be a struggle using existing mines or feedstocks,” Mr Montgomery said. “Everyone is going to have to rely on the DRC for cobalt one way or the other.” One consultant who works closely with big companies throughout the electric vehicle supply chain said that it was “surprising” that Panasonic had only now realised that its batteries may contain Cuban cobalt, but added that Sherritt was not a major supplier to the company.
About 4 per cent of global cobalt mined production came from Cuba last year, according to Darton Commodities. Another Tokyo-based expert in the EV supply chain, who is a specialist in cobalt, said that while Japanese companies did not normally use Cuban cobalt — and it was in any case a small component of the Japanese EV supply chain — some certainly did so. Caspar Rawles, a London-based analyst at Benchmark Mineral Intelligence, said Panasonic would probably be able to tap into its wide range of suppliers and internal stocks to plug the gap from the suspended Sherritt supply.
“Negotiation season for long-term raw material supply contracts is just around the corner and Panasonic can replace inventory in this period to meet the needs of their Tesla obligations, so it is less likely that they will need to source additional material from the spot market,” Mr Rawles said. The supply issue came to light as both Tesla and Panasonic, its exclusive battery supplier, are working to develop cobalt-free batteries to cut their reliance on the metal.
Yoshio Ito, the head of Panasonic’s automotive business, recently said it would aim to halve the use of cobalt for the type of automotive batteries used for Tesla’s EVs in two to three years. “We have already achieved this at the research and development level,” Mr Ito told reporters in Tokyo. He declined to provide a timeline for the mass production of such batteries, saying safety and quality assurances would take time. In a statement on Friday, Tesla reiterated that the company was “aiming to achieve close to zero usage of cobalt in the near future”.
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