|Cuba is seeking $8bn in foreign investment
for development projects, some of which are in the mining
Whatever you may say about the industrial minerals sector,
there is certainly no shortage of unstable regimes and hostile
territories to invest in. Cuba may soon be joining this list of
challenging countries as US President Barack Obama begins
discussions to normalise the relationship with its wayward
neighbour and restore the diplomatic relations enjoyed
Others are following suit. UK Trade & Investment (UKTI)
is organising the first British Trade and Investment Mission to
Cuba in ten years at the end of April 2015, in cooperation with
the UK Foreign & Commonwealth Office.
Meanwhile Cuba’s Ministry of Foreign Trade and
Investment in November 2014 announced 246 development projects
for which it was seeking $8bn in foreign investment. Out of
these projects, at least ten are in the mining sector,
according to the US Geological Survey’s (USGS)
report, Recent Trends in Cuba’s Mining and
Petroleum Industries, published on 31 March.
Cuba is also investing around $900m in a new port,
transhipment and logistics centre over 400km2 at
Mariel, just outside Havana, to support this investment. Given
a sea change in Cuban attitude, is it a territory worth
exploring for the industrial mineral investor?
Sitting off the coast of Mexico, straddling the Atlantic,
Caribbean and Gulf of Mexico waters, Cuba presents no end of
complication for the investor. Not least because its north
western maritime boundary with the US and Mexico where offshore
drilling could take place is yet to be delimited.
Throw into the mix a government that imposes labour and
pricing controls, a state-driven economy and a resource
nationalism policy of 51% ownership in joint ventures, and you
might wonder if the companies venturing in are foolhardy or
masochistic – or both.
So what does Cuba have to recommend it? The country is home
to volcanically derived bentonite, feldspar, and high-purity
zeolite minerals, as well as gypsum, kaolin, lime, high-grade
limestone, marble, and sand from carbonate terranes, according
to the USGS report.
On top of industrial minerals reserves, there are plenty of
crude oil and natural gas resources to attract in the energy
giants and maintain pressure on the regime to be
Cuba currently exports ammonia, nitrogenous fertiliser, and
zeolites to Europe and to other Latin America and Caribbean
nations, according to the USGS.
However, production at most mineral processing facilities is
significantly below those facilities’ design
capacities, and the quantity of output is not currently
sufficient to support an export market, the survey said.
To understand why this is, you need to look to the
country’s history. Prior to the Cuban revolution
in 1953-1959, the US operated several refineries in Cuba, and
between 1916 and 1940 imported more than 720,000 tonnes
chromite ore from the country.
After the revolution and the US embargo, Cuba instead formed
a series of trade agreements with the Union of Soviet Socialist
Republics (USSR). When the USSR was dissolved in 1991,
Cuba’s economic growth plummeted and the mining
industry suffered from a lack of investment.
"The Revolución de Octobre plant in Nuevitas reported
production of 65,000 tonnes nitrogenous fertiliser and ammonium
nitrate production at year end 2014, with the majority of the
ammonium nitrate intended for export," said the USGS
"Cuba has imported an average of 8,000 tpa ammonia and
phosphatic fertilisers from countries in North Africa,
including Egypt, Libya, and Morocco, from 2010 through 2013.
Lime was produced at seven small commercial plants throughout
the country using outdated technology and very limited
automation of production processes," it continued.
"Exports of zeolites have been reported since at least 2006;
in 2013, an estimated 4,500 tonnes zeolite were exported to
Europe and Latin American countries," the USGS report went
In 1995 Cuba passed the Foreign Investment Act, which allows
for foreign direct investment in the country. Economic growth
recovered as a result of this and Cuba’s real GDP
in 2013 was $70bn, putting it on a par with Bolivia, the
Dominican Republic, and Guatemala.
In November 2014, Cuba’s Ministry of Foreign
Trade and Investment announced its plans to seek $8bn in
As a condition to this, the government of Cuba stipulated
that foreign ventures must retain a majority Cuban ownership,
with the output to be sold at predetermined prices to state
distribution systems. Joint venture firms will also be required
to provide business plans that make projections on how they
might affect the country’s balance of
Foreign investment entities are allowed to partner with
domestic business cooperatives, according to the USGS
To date, US companies have been unable to engage in business
ventures in Cuba, but interest in the country’s
minerals has stemmed from some Canadian-registered
These include Quebec’s Robex Resources, which
acquired a 50% interest in Coco Peredo, a 76,000 tpa calcium
carbonate operation run by state-owned Cimtech. In 1996,
Geominera was seeking partners to develop a 4.7m tonne reserve
wollastonite deposit at Cienfuegos. This project did not get
off the ground.
Cuba does have the potential to follow a Chinese-like
economic reform path, by retaining communist control but
allowing the gradual development of market reform. According to
the World Bank, Cuba's GDP of $70bn is expected to have a
growth rate of 4% in 2015.
With sources of calcium carbonate, and perhaps other
industrial minerals, it may still attract the attention of
international investors looking for new sources of raw
materials. In addition, most of Cuba's mineral resources lie
close to the surface and can be exploited in open pit mines for
relatively little cost.
Cuba’s industrial minerals mining projects
according to The Portfolio of Opportunities for Foreign
Investment on the Cuban government website are:
Isle of Youth. The Isle of Youth contains
dozens of deposits and manifestations of kaolin. A geological
investigation under an International Economic Association
Contract (AEI) is necessary, followed by a joint enterprise.
The total investment is estimated at around $5.3m. The
prospects of interest include:
- Mica prospects, "El Aleman", (0.46km2 ) at
some 10km south west of the city of Nueva Gerona.
- Mica prospects, "Ciro Redondo", (2.25km2 ) at
some 15km west of the city of Nueva Gerona.
- Mica prospect,"El Bobo", (5.25km2 ) at some
10km west of the city of Nueva Gerona.
- Kaolin prospect, "Rio del Callejon", (1.8km2 )
at some 18km to the south west of the city of Nueva Gerona
and 2km north east of the town of La Demajagua.
- Kaolin prospect, "Km 13" (0.23km2 ) at 13km
south of the city of Nueva Gerona and 2km north of the town
of Santa Fe
- Kaolin prospect, "Santa Barbara-Buena Vista"
(10.12km2 ) at some 25km to the south east of the
city of Nueva Gerona and 3 to 4km NE of the town of La
- Kaolin prospect, "La jungla" (1.14 km2 ) at
some 30km south of the city of Nueva Gerona and 10km west of
the town of Santa Fe.
Jaguey – La Catuca, in the
Clego-Camaguey-Tunas region, which include rare earths
deposits. The site needs additional works to definitively
establish prospects, and recognisance work in the rest of the
Holguin Oeste. The Holguin site rests in
the North American continental border. The resources possibly
include titanium as well as gold, silver and copper. The site
has carried out recognisance in two prospects, the Monte Rojo
prospect and the Las Cuevas prospects. Surveys have also been
carried out in the rest of the area. Prospecting has still to
be carried out in the rest of the area.