Alfa Invests $15M in Cuban Nickel

Alfa Invests $15M in Cuban Nickel
26 September 2010
By Olga Razumovskaya

Alfa Group's A1 unit will invest $15 million in a 49 percent stake in
its venture with Cuba's Commercial Caribbean Nickel, the unit's managing
director told The Moscow Times.

On Friday, A1 said in a statement that it had created a joint venture
with the Cuban state-run company to develop Cuba's Nicaro mines,
extracting nickel and possibly other metals.

The project is one of just a handful of Cuban-Russian industrial
projects since the early 1990s, A1 said. Russian investment in the
communist island nation decreased after the collapse of the Soviet Union.

"The Nicaro project is promising. There are approximately 100 million
tons of flotation tailings in this region, and forecasts show that these
tailings have a large content of not only nickel, but also cobalt, iron
and chrome," Alexei Mikhailovsky, the A1 managing director, said in the
statement.

Commercial Caribbean Nickel has promised to provide licenses and permits
and to assist A1 with building a work force and finding local expertise.

Russians will be involved in "technological operations," including a
pilot construction project that will help extract nickel from the
flotation tailings, which are industrial waste left over from earlier
mining.

The company will begin its pilot in the second half of 2011,
Mikhailovsky said.

"The concentration of extracted nickel is lower than it used to be a few
years ago. Extraction technology has improved, making projects like this
one attractive," said Nikolai Sosnovsky, a metals analyst at Uralsib
Capital.

Norilsk Nickel, the world's biggest producer of nickel, also has
expressed interest in the Nicaro mines. In November 2008, it signed a
memorandum of understanding with Cubaniquel to exchange specialists and
expertise in mining and selling nickel products.

"A1 has a competitive advantage over Norilsk Nickel in Cuba because we
have done business there before," Mikhailovsky said. He said the
company, formerly named Alfa Eco, took part in an oil-for-sugar program
in the 1990s and delivered 1.5 million tons of oil to Cuba in exchange
for 500,000 tons of raw sugar.

http://www.themoscowtimes.com/business/article/alfa-invests-15m-in-cuban-nickel/417032.html