Fuel shortages have frozen a TSX-listed Canadian miner with US$344 million owed by Cuba
Cuba’s fuel crisis has frozen major Canadian assets, pushed payment risk higher and turned a long-standing sanctions workaround into a potential liability.
According to CBC News, the Moa nickel and cobalt joint venture between Toronto-based Sherritt International and the Cuban state — one of the largest open-pit mines in the world with refining in Fort Saskatchewan, Alberta — is now idle due to a lack of fuel.
Sherritt negotiated a repayment plan after Cuba fell behind on obligations, but the outstanding debt still reached US$344m by the second quarter of last year.
In its own filings cited by CBC News, Sherritt warned that “any operational improvement is conditioned on the stability of the country’s economic conditions” and on its Cuban partner’s ability to meet financing and foreign currency commitments.
Tourism, the other big Canadian exposure, is also under pressure.
Many Canadian firms saw lucrative opportunities over the past 15 years, with Sunwing expanding from fewer than 400 hotel rooms on the island in 2010 to nearly 9,000 by the time of the pandemic through its Blue Diamond Resorts unit, now Royalton.
The company opened properties including the Mystique Casa Perla in Varadero and partnered heavily with the Gaviota chain, part of GAESA, the Cuban military’s holding company that increasingly dominates the economy.
GAESA planned 103,000 hotel rooms by 2030, and Sunwing kept investing after the pandemic, opening two more hotels last year.
But the tourists have not returned as expected.
Cuban American researcher and human rights activist Maria Werlau told CBC News the “operating environment is near collapse,” with hotel food shortages, no electricity or water, poor maintenance and “empty” properties.
CBC News reported that airlines have recently cancelled flights over fuel concerns.
Sunwing, Royalton and the Cuba Tourist Board did not respond to CBC News requests for comment.
The macro backdrop has shifted from cyclical weakness to structural stress.
As per CTV News, fuel shortages have driven widespread blackouts that disrupt hospitals, universities, transportation and basic logistics.
Dalhousie University professor John Kirk told CTV News that “the situation in Cuba is desperate,” describing a “humanitarian crisis” and asserting there has been “no fuel in Cuba since the very first week of January.”
He cited problems with water pumping, no fuel for hospital generators and 32,000 pregnant women waiting for ultrasounds they cannot get.
On the ground, power has become so scarce that residents talk about “lights-on” rather than blackouts.
CTV News reported that two Canadians on a humanitarian mission described Cubans rushing to cook, charge phones and store water in the one- or two-hour windows when electricity returns.
One of them said, “People say, ‘I may not get power again for three days so I’m going to do everything that I need to do in this one or two-hour time-frame.’”
Canadian-backed aid efforts are also running into cost and logistics constraints.
The director of Together for Cuba said her group has “bags full of cataract surgery supplies,” orthopaedic materials and sutures ready, but gas at about $8 per litre and the fuel shortage itself raise questions about how long they can sustain deliveries of food and medical supplies.
Institutional Canada is already pulling back.
CBC News reported that the Canadian Commercial Corporation (CCC), a Crown corporation that helped Canadian businesses enter Cuba, ended its Cuba program as of January 1.
Spokesperson Liane Cerminara said CCC’s Cuba program, delivered with Export Development Canada, “concluded due to a convergence of rising financial risk and deteriorating economic conditions.”
Over its life, CCC facilitated $1.8bn in Cuban sales of goods and services from Canadian suppliers in agriculture and tourism.
Ottawa has also issued new advice warning of “payment risks” tied to an “ongoing liquidity crisis.”
At the same time, political and legal risk has escalated.
CBC News reported that for decades Canadian governments took pride in ignoring US sanctions on Cuba, including the 1996 Helms-Burton Act, and that since 1992 Canada has enforced the Foreign Extraterritorial Measures (United States) Order, which bans compliance with the US embargo.
In 2017, Honda Canada Finance, Inc. faced US Office of Foreign Assets Control scrutiny for leasing cars to the Cuban Embassy in Ottawa; its US parent paid an US$87,255 fine.
The Trump administration then activated Title III and Title IV of Helms-Burton after two decades in abeyance, increasing litigation risk for foreign firms operating on expropriated property.
Werlau told CBC News that Communist authorities expropriated the Moa mine from Freeport Sulphur Company of New York in 1960 and that its successor filed a US$166m claim plus interest in 1971.
She said many hotels sit on confiscated land and warned that Canadian companies could face legal claims for labour exploitation and environmental damage.
She cited Cuban government data that describe Moa’s furnaces as emitting “toxic amounts” of pollutants under an environmental exemption.
Even as these risks build, Havana wants new capital.
As per Al Jazeera, Deputy Prime Minister Oscar Perez-Oliva Fraga said Cuba has opened the “doors” to investment from Cuban Americans and other exiles and removed impediments to US and other foreign investors, while acknowledging that US law still blocks most engagement under the embargo.
He told state television there are “no limitations” on investment from Cubans abroad and highlighted agriculture as a priority sector.
Economist Paolo Spadoni described this shift as “pragmatic” in comments to Al Jazeera and said it “could be a catalyst for deeper US-Cuba economic ties,” even though “major obstacles remain.”
Meanwhile, CTV News reported that US President Donald Trump has demanded that Cuban President Miguel Díaz-Canel step down, release political prisoners and move toward political and economic liberalization in exchange for lifting sanctions, and has said he expects to have the “honour” of “taking Cuba in some form.”
