Sherritt International's Cuban nickel and cobalt operations are entering uncharted territory. Venezuela has stopped sending oil. The lights keep going out. And the Moa joint venture, which accounts for the bulk of Sherritt's production, is running on fumes.
The Canadian miner disclosed in recent regulatory filings that it faces "significant operational challenges" stemming from Cuba's cascading economic crisis. The immediate trigger: Venezuela's cessation of oil exports to Cuba in early 2026, a development that directly threatens operations dependent on consistent fuel supply. Without Venezuelan crude, Cuba's energy grid: already fragile: has deteriorated further, leaving industrial operations like Moa scrambling for alternatives that don't exist at scale.
This isn't a temporary blip. It's a structural crisis with geopolitical roots.
Venezuela Cuts the Lifeline
For years, Venezuela supplied Cuba with subsidized oil under political agreements dating back to the Hugo Chávez era. That arrangement unraveled as Venezuela's own oil sector collapsed under economic mismanagement, sanctions pressure, and infrastructure decay. By early 2026, the flow stopped entirely.
The timing is brutal. Cuba's economy was already reeling from foreign currency shortages, chronic power outages, and Hurricane Melissa damage in October 2025. The loss of Venezuelan oil didn't just worsen an existing problem: it eliminated Cuba's primary backup option for fuel imports. Sherritt stated plainly in disclosures that the termination of Venezuelan supplies "could directly affect its operations in Moa," which rely on fuel for mining operations, transportation infrastructure, and state-provided energy services.
On January 29, 2026, the U.S. government escalated pressure by issuing an Executive Order declaring a national emergency regarding Cuba and authorizing tariffs on any country supplying oil to the island. That order effectively cordoned off Cuba from global oil markets, leaving the country with few options beyond Russian or Iranian crude: neither of which can replace Venezuelan volumes quickly or reliably.
The strategic calculus is stark: Cuba needs fuel to keep Moa running. Moa needs fuel to produce nickel and cobalt. And nickel and cobalt production is one of Cuba's few remaining sources of hard currency, alongside tourism and remittances. There's no slack in this system.
Production Numbers Tell the Story
Sherritt's second-quarter 2025 results showed the strain. Combined nickel and cobalt production at the Moa joint venture fell to just 3,431 tonnes, with Sherritt's attributable share sitting at only 389 tonnes. That's a 50-50 joint venture with the Cuban government, so Sherritt takes half of whatever Moa produces. But when Moa can't produce at capacity, both partners absorb the hit.
The facility wasn't designed to operate in this environment. Moa relies on continuous power from Cuba's national grid and supplemental generation from Sherritt's Energas joint venture, which operates a gas-fired power plant. When the grid fails: and it fails often: Energas is supposed to pick up the slack. But Energas itself depends on gas wells, infrastructure, and maintenance schedules that have all been disrupted by the broader economic crisis.
Sherritt has acknowledged delays in acquiring spare parts, prolonged power outages affecting operations, and damage from Hurricane Melissa that's still being repaired months later. These aren't isolated issues. They compound. When spare parts shipments stall due to foreign currency shortages, equipment breaks down. When equipment breaks down during a power outage, recovery takes longer. When fuel supplies are uncertain, planning becomes impossible.
The company has committed to deploying additional expatriate personnel to Moa and implementing recovery plans in coordination with Cuban state partners. It's also working on infrastructure improvements, including drilling a replacement gas well at Energas to maintain power production. But Sherritt itself noted that resolving these challenges "may take additional time." That's corporate speak for: we don't know when this stabilizes.
Geopolitical Risk Isn't Priced In
Sherritt's entire business model hinges on stable operations in Cuba. The company has no diversification buffer. If Moa falters, Sherritt falters. And Moa is now operating in an environment where fuel supply, power availability, and government support are all question marks.
The geopolitical risk is layered. U.S. sanctions remain in place, making it difficult for Sherritt to access American capital markets or partner with U.S.-based firms. Canadian investors have historically tolerated this arrangement because Sherritt offered exposure to nickel and cobalt at a discount to market valuations, partly due to Cuba risk. But that discount exists for a reason: and 2026 is demonstrating why.
Cuba's economy is in a death spiral. Foreign reserves are depleted. The peso is collapsing. Inflation is rampant. And the government has few levers left to pull. Nickel and cobalt exports are supposed to be part of the solution, but production disruptions at Moa undercut that strategy. If Sherritt can't produce, Cuba can't export. If Cuba can't export, it can't earn foreign currency to buy fuel. And if it can't buy fuel, Sherritt can't produce.
The feedback loop is vicious.
What Happens When the Fuel Runs Out
Nickel and cobalt aren't luxury commodities. They're critical inputs for stainless steel, batteries, and electric vehicle production. Global demand for both metals remains strong, particularly as EV supply chains ramp up. But supply disruptions carry consequences, especially when a facility like Moa: which historically contributed meaningful volumes to global nickel markets: goes offline or underperforms.
Sherritt's challenges aren't unique to Cuba. Nickel miners globally face cost pressures, permitting delays, and infrastructure constraints. But most of them aren't also contending with a fuel crisis, a grid that can't stay on, and a government that's out of hard currency. Those factors compound the operational challenges in ways that aren't easily resolved through capital expenditure or management shuffles.
The company's response: more expatriate personnel, recovery plans, infrastructure work: suggests it's committed to salvaging the situation. But commitment doesn't guarantee success. If Cuba can't secure reliable fuel supplies, Moa's production will remain constrained regardless of how many engineers Sherritt deploys.
Broader Implications for Resource Nationalism
Sherritt's situation is a case study in what happens when resource nationalism meets economic collapse. Cuba's government retains majority control over natural resources, including nickel and cobalt deposits. Foreign mining companies like Sherritt operate under joint venture structures that give the state significant influence over operations, revenue sharing, and strategic decisions.
That arrangement works when both parties benefit from stable production and reliable revenue streams. It breaks down when the host government can't provide basic infrastructure: power, fuel, transportation: that mining operations require. And it becomes untenable when geopolitical isolation limits the government's ability to import critical inputs or access global markets.
Other mining companies watching Sherritt's struggles will draw conclusions about operating in politically risky jurisdictions. The calculus isn't just about ore grades or capital costs. It's about whether the host country can sustain the industrial infrastructure necessary to keep mines running. Cuba increasingly can't.
The Path Forward Is Narrow
Sherritt has limited options. It can't relocate its operations. It can't easily sell its stake in Moa given the geopolitical constraints and current market conditions. It can't force Cuba's government to solve its fuel crisis or repair its power grid. What it can do is try to insulate Moa from the worst of Cuba's dysfunction through operational improvements, better logistics planning, and infrastructure investments like the Energas gas well replacement.
None of those measures address the root problem: Cuba doesn't have enough fuel to power its economy, and that shortage is now throttling one of its most strategically important industries. Sherritt is absorbing the costs of that failure in real time.
For investors, the situation is a reminder that mining isn't just about geology and commodity prices. It's about political stability, infrastructure reliability, and access to critical inputs like energy and transportation. When any of those variables breaks down, production suffers. When all of them break down simultaneously: as they're doing in Cuba: the result is operational paralysis.
Sherritt acknowledged as much in its disclosures. The company is doing what it can. But "what it can do" may not be enough if Cuba's fuel crisis deepens or if geopolitical isolation continues to limit the country's access to global energy markets.
The clock is ticking. And the fuel gauge is close to empty.
Source: Skillings Mining Review (Data as of February 16, 2026)
