By Kyle Castellanos
In line with Donald Trump’s hawkish stance against the regime in Venezuela, the United States has placed more stringent sanctions on Cuba in response to their continued relations with Venezuela. Trump’s travel ban on Cuba, specifically the restrictions on cruise line transport to the island, has significantly impacted the tourism industry’s revenue. Without American tourism, the Cuban economy has taken a hit, with repercussions for firms operating in the country.
Cuba has been mining in Moa, a municipality in the Holguín province, in a joint venture with Sherritt International, a Canadian company. Together, the two have been working on refining nickel through open-pit mining. In addition to cooperation in the mining venture, Sherritt provides electricity and fossil fuels for the island.
Diminished tourism revenue, paired with heavy oil sanctions from the United States, has put Cuban collaborations with Sherritt at a standstill. As a result of the fuel shortage, Cuba has resorted to sending fewer mining trucks to the Moa mining operation, slowing down production in the process. Additionally, the inability to repay loans has placed leadership at Sherritt International, Cuba’s largest private foreign investor, on alert. Last week David Pathe, Sherritt’s chief executive, said, “There is potential for further sanction increases in the months ahead and that does put further difficulty on our ability to forecast the timing of Cuban receivables, receipt of cash on Cuban receivables from our Cuban partners in the oil and power business.”
After only just recently reporting that the country did not obtain enough oil for normal operations last month, Cuba stands to lose another large energy contributor if they do not figure out a way to successfully pay off the debt to Sherritt International. It is unclear whether the current U.S. sanctions on Cuba will ultimately lead to the fall of the Communist regime, but they have clear fiscal ramifications. Only one thing is certain: failing to balance its accounts with Sherritt International will spell further economic hardships for an already-shaken Cuba.