The only way to preserve its capacity to do business
After more than three decades, the quiet arithmetic of unpaid debts, broken barter agreements, and tightening American sanctions finally closed the ledger on one of Cuba's most significant foreign partnerships. In May 2026, Canadian mining company Sherritt International announced its full withdrawal from the island, citing $277 million in accumulated obligations Cuba could not meet and new U.S. sanctions that made continued operations a threat to Sherritt's very existence in global markets. The departure is not merely a corporate exit but a signal of how deeply structural the Cuban economic crisis has become — a moment when a nation loses not just an investor, but electricity, cobalt production, and the credibility that attracts future partners.
- Cuba's inability to deliver even a quarter of the cobalt promised under a 2022 barter agreement exposed not a temporary shortfall but a systemic incapacity to honor its own negotiated lifelines.
- Trump's May 2026 executive order and the subsequent designation of GAESA — Cuba's military-run economic conglomerate — under secondary sanctions made it financially suicidal for any foreign firm to remain on the island.
- Sherritt's dissolution triggers a cruel paradox: Cuba must now pay additional compensation to Sherritt on top of the $277 million already owed, even as it absorbs the loss of the very operations that might have generated that revenue.
- The exit strips Cuba of 10 to 15 percent of its independent electricity generation at the worst possible moment, deepening an energy crisis already forcing nationwide rationing.
- What began as a partnership built on nickel and cobalt ends as a cautionary ledger — each unpaid invoice a brick removed from a foundation that can no longer hold the weight placed upon it.
After more than thirty years as Cuba's largest foreign mining partner, Sherritt International announced in May 2026 that it was leaving the island for good. The decision was not made lightly — it was made inevitable. Cuba owed the Canadian company $277 million, accumulated through years of deferred payments across its nickel and cobalt joint venture in Moa, its power generation partnership through Energas, and oil agreements with state company CUPET.
In 2022, both sides had attempted a creative workaround: rather than hard currency, Cuba would deliver refined cobalt to Sherritt over five years to settle roughly $362 million in debt. By late 2024, Cuba had managed only about a quarter of those deliveries. The country could not produce enough cobalt to meet even that reduced bar. Then, in early 2026, Cuban authorities informed Sherritt they lacked the fuel to keep the Moa mine running at all. Production halted entirely.
The final blow came from Washington. On May 1, 2026, President Trump signed an executive order dramatically expanding Cuba sanctions and introducing secondary penalties against foreign entities doing business with designated Cuban partners. A week later, the State Department designated GAESA — the military conglomerate controlling much of Cuba's economy — under that authority. For Sherritt, continued operations now risked exclusion from the international financial system. The company invoked its dissolution clause.
Under the settlement mechanics, Sherritt retains its Saskatchewan refinery while Cuba's General Nickel Company absorbs the Moa mining operations — but because the Cuban assets are worth more, GNC owes Sherritt additional compensation beyond the $277 million already unpaid. How a depleted Cuban treasury meets that obligation remains unanswered.
The human toll is immediate. Energas had been supplying between 10 and 15 percent of Cuba's independent electricity capacity — 506 megawatts now gone without compensation to Sherritt. The island loses not just a business partner but a meaningful share of its power grid at a moment when energy is already being rationed. Sherritt's own statement was stark: invoking dissolution was the only way to preserve its ability to do business anywhere. For Cuba, the exit marks another visible fracture in an economy that is rapidly running out of room to maneuver.
After more than thirty years as Cuba's largest foreign mining partner, Sherritt International announced in May 2026 that it was walking away from the island entirely. The Canadian company had no choice. Cuba owed it $277 million—money that had accumulated through years of missed payments, a failed barter scheme, and finally, the weight of new American sanctions that made any continued business relationship impossible.
The debt itself tells a story of structural collapse. The bulk of it—$277 million—came from the joint nickel and cobalt operation in Moa, Holguín, run through Cuba's state-owned General Nickel Company. Additional sums were owed through Energas, the power generation joint venture, and CUPET, the state oil company. These weren't sudden obligations. They had accumulated quietly over years as the Cuban government deferred payments it couldn't make.
By October 2022, the situation had become dire enough that both parties agreed to an alternative: instead of paying in hard currency, Cuba would deliver refined cobalt to Sherritt over five years, from 2023 through 2027, to settle roughly $362 million in Canadian dollars of accumulated debt. It was a creative solution born of desperation. It also failed. By late 2024, Cuba had managed to deliver only about a quarter of what it had promised. The country simply could not produce enough cobalt to meet even that reduced obligation.
Then came the energy crisis. In February 2026, Cuban authorities told Sherritt they lacked the fuel to keep the Moa operation running. Production stopped. The island was rationing electricity across the board, and the mining partnership became a casualty of that larger collapse. But the real blow came from Washington. On May 1, 2026, President Donald Trump signed Executive Order 14404, which dramatically expanded sanctions against Cuba and introduced secondary sanctions—penalties against foreign banks and companies that did business with designated Cuban entities. A week later, on May 7, the State Department designated GAESA, the military-run business conglomerate that controls much of Cuba's economy, under this new authority.
For Sherritt, the designation of GAESA made the position untenable. Any foreign company with operations in Cuba now risked losing access to the international financial system. Sherritt announced it was dissolving all Cuban operations and invoking its dissolution clause with General Nickel Company. The mechanics were straightforward on paper: Sherritt would retain sole ownership of its Saskatchewan refinery in Canada, while GNC would take control of the Cuban mining operations. But the Cuban mine is worth more than the Canadian refinery. That meant GNC would owe Sherritt additional compensation beyond the $277 million already unpaid—a settlement obligation that Cuba's depleted state treasury would somehow have to meet.
The human cost was immediate and tangible. Energas, the power joint venture, had been supplying between 10 and 15 percent of Cuba's independent electricity generation capacity—506 megawatts that kept lights on in homes and hospitals across the island. Sherritt walked away from that stake without compensation. The same happened with its oil production-sharing contracts and drilling services agreements. Cuba lost not just a business partner but a significant source of electrical power at a moment when the island was already rationing energy.
What remained was a question with no easy answer: How would Cuba's state companies pay the additional settlement owed to Sherritt while simultaneously absorbing the loss of foreign investment, electrical capacity, and the mining operations themselves? The company's own statement was blunt: invoking dissolution rights was "the only way to preserve its capacity to do business." For Cuba, the exit of Sherritt marked not just the end of a three-decade partnership, but another visible crack in the foundation of an economy running out of options.
Citas Notables
The only way to preserve its capacity to do business is to invoke its rights of dissolution without delay— Sherritt International, in official statement announcing exit
La Conversación del Hearth Otra perspectiva de la historia
Why did Sherritt stay as long as it did, given that Cuba was clearly unable to pay?
Because for thirty years, the partnership worked—or worked well enough. Nickel and cobalt mining in Moa was profitable. The joint ventures generated revenue. You don't walk away from that lightly, even when payments start to slip.
But $277 million is not a small slip. How does a debt get that large?
Slowly, and then all at once. Cuba deferred payments year after year. Sherritt kept operating, kept hoping the situation would stabilize. Then in 2022 they tried the cobalt swap—a gamble that Cuba could at least deliver the physical product if it couldn't pay in dollars. It was a lifeline, really.
And Cuba couldn't even manage that?
No. They delivered about 25 percent of what they promised. That tells you everything about the state of the economy. They couldn't produce enough cobalt to service the debt, even in kind.
So what changed in May 2026?
The American sanctions. Trump's executive order and the designation of GAESA made it financially suicidal for any foreign company to stay. Sherritt couldn't access international banking. The risk wasn't just losing money—it was losing the ability to do business anywhere.
Did Sherritt have leverage to demand better terms?
Not really. Cuba was already in crisis. The company had to choose between staying and losing everything, or leaving and at least preserving its other operations. They chose to leave.
What happens to the Cuban workers?
They lose their jobs. And Cuba loses 10 to 15 percent of its independent power generation. In an energy crisis, that's devastating. Sherritt didn't just pull out of mining—it pulled out of electricity generation too.