Cuba is a Caribbean island located between the North Atlantic Ocean and the Caribbean Sea. Cuba’s total area in land mass is 110,860 km2, whereas its total population is 11.48 million as of July 2017. The country’s climate is mostly tropical.
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|The national flag of Cuba.
Image Credits: CIA Factbook
The Treaty of Paris established Cuba as an independent nation in 1902. Since then, the country has had numerous ruling governments, each of which were backed by the military. In March 2019, the Cuban government approved its first constitutional reform since 1976 that included almost 80 new laws aimed to improve the country’s political system. Although the Communist Party remains the only political group permitted in Cuba, this new constitution could potentially allow voters to have an opinion on which candidates can run. As of June 2019, the GDP of Cuba was estimated to be worth approximately $92 billion USD.
The natural resources of Cuba include nickel, iron ore, cobalt, chromium, silica, copper, salt, timber and petroleum. Cuba has been importing 100,000 bbl/d of oil from Venezuela on a conditional basis in which part of the payment is through services from Cuban personnel in Venezuela. The Ministerio de la Industria Básica is the government agency in Cuba that is primarily responsible for maintaining the country’s mineral and petroleum sectors.
Overview of Resources
The chief mineral resources produced in Cuba, which aided its economy in 2010, were nickel and cobalt. The mining sector also produces other minerals including cement, feldspar, gypsum, iron ore, lime, limestone, asphalt, bentonite, chromite, zeolite, marble, steel, and sulfuric acid.
The national map of Cuba. Image Credits: CIA Factbook
Gold, copper and zinc deposits had been found in the central province of Villa Clara in the 1900s. Reports state that the Delita concession on the Isla de la Juventud has around 1.5 million ounces of gold and that the government is planning to construct an open pit mine.
A joint venture was formed between the government of Cuba holding 51% interest and the government of Venezuela holding 49% interest to renovate the 68,000 Mt/yr-Las Camariocas ferronickel plant by spending $700 million.
Cobalt is one of Cuba’s most important exports. Although the price of cobalt is expected to increase, Cuba predicts that both their nickel and cobalt sulfide production will exceed 50,000 tons in the coming year.
About 33% of Cuba’s domestic petroleum demand is met by near-offshore and onshore production of extra heavy crude oil. The remaining oil demands for this nation is met through imports from Venezuela. A majority of Cuba’s petroleum production is conducted east of Havana and along the northern coastlines of the Matanzas and Mayabeque provinces. Sherritt International Corporation, which has acquired 40% to 100% of indirect interest in many of Cuba’s petroleum production-sharing contracts, remains heavily involved in Cuba’s petroleum production processes at these locations. Cuba’s government currently has 86 purely petroleum-based projects, which is the largest number of products that any industrial sector in this nation has been provided in recent history.
By 2030, Cuba hopes to increase their share of electricity produced by renewable resources to 24%, which is comparable to the 4% of renewable energy sources used for this purpose in 2014.
Cuba’s mining sector has to be properly upgraded to attract more foreign investments. This rush in investment in Cuba’s minerals has been further supported as a result of the reconciliation that the Caribbean nation has recently accomplished with the United States of America. There are currently an estimated 240 Cuban mining and energy projects that are anticipated to gain foreign investment in the near future.
In February 2012, Repsol YPF, a Spanish oil company began drilling the first well in Cuba. This exploration of Cuba’s offshore oilfields was much-awaited and welcomed by the country. The exploration activities will also include Norway’s Statoil and ONGC Videsh (unit of Oil and Natural Gas Corp of India).
The country however will have to provide a more conducive and secure environment for investors. Hopefully, the current efforts taken by the government to relax its policies to a small extent will be favorable for the progress of its mining sector.
Disclaimer: The Author of this article does not imply any investment recommendation and some content is speculative in nature. The Author is not affiliated in any way with any companies mentioned and all statistical information is publicly available.
Sources and Further Reading
This article was updated on the 5th June, 2019.