Cuba awakening: what the country has to offer mining investors

By Josie Shillito
Published: Thursday, 02 April 2015

Tentative olive branches between the US and Cuba could open its mineral resource up for international investments. Kaolin, lime, feldspar, bentonite, zeolite, and gypsum are all present in the geology of the country for those brave enough to take on the regime.

Cuba_flickr_ scaturchio 
Cuba is seeking $8bn in foreign investment for development projects, some of which are in the mining sector.
Source: Scaturchio

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 pre-1961.

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 competitive.

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 report.

"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 on.

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.

New approach

In November 2014, Cuba’s Ministry of Foreign Trade and Investment announced its plans to seek $8bn in foreign investment.

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 payments.

Foreign investment entities are allowed to partner with domestic business cooperatives, according to the USGS report.

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 companies.

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 Demajagua.
  • 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 area.

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.

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