Cuba will pay a debt of 260 million dollars to the Canadian mining company Sherritt Internacional Corp. with cobalt, the company said in a statement.

The document indicates that the mining company has reached agreements with its Cuban partners to settle a total of 362 million Canadian dollars (260 million US dollars) in five years.

The debt will begin to be paid on January 1, 2023, through agreements known as the “cobalt exchange”, the portal reported. online mining.

In accordance with the terms of the cobalt exchangeGeneral Nickel Company (GNC), Sherritt’s Cuban partner in a joint Moa project (Moa JV), will assume the responsibilities owed to the Canadian company by the public companies Unión Cubapetróleo (CUPET) and Energás SA.

Beginning in 2024, the Moa joint venture plans to distribute a maximum of 2,082 tonnes of finished cobalt per year – or approximately 60% of current production – to joint venture partners, and that is when GNC Cuban will redirect its 50% share of Moa JV’s total dividends – up to 1,041 tonnes of finished cobalt per year – to Sherritt in repayment of outstanding loans.

This, provided that the total volume of cobalt has a value of at least 57 million dollars.

Leon Binedell, president and chief executive of the Canadian company, welcomed the agreement, saying it “ends the historical uncertainty of reimbursements” and “should provide significant cash flow to meet our priorities. strategies of reduce debt and aggressively grow our business“.

In addition to the cobalt exchange, an extension of the payment agreement with Cuban partner Energas has been reported to fund the operating and maintenance costs of this Cuban company and to cover future payments that would be due to Sherritt.

In 2008, the Canadian also signed a conditional sale agreement with Energas for the construction of additional electricity capacity in Cuba, in the midst of the crisis that the island is going through.

Under this agreement, Energas was to repay certain advances, but these payments were affected because access to foreign currency in Cuba to make liability payments was restricted.

CUPET’s accounts receivable was also limited by lack of access to foreign currency, which would have limited CUPET’s ability to pay amounts owed to Sherritt.

In this context, Sherritt receives approximately $4.2 million per month under a payment agreement with Moa JV and Energas, whereby Moa JV converts foreign currency into Cuban pesos through Energas to support local operating activities of Moa JV in Cuba.

These funds are paid to Sherritt primarily to facilitate foreign currency payments for Energas operations.

The mining company claims that the exchange of cobalt it provides a mutually beneficial agreement to pay outstanding bills within a reasonable time without depending on Cuba’s ability to access foreign currency.

Last year, Sherritt International Corp. announced its intention to increase its production of nickel and cobalt in Cuba to take advantage of the increased demand for electric vehicles.

However, last May it was reported that their production had dropped significantly in recent months, due to alleged operational issues and variability in mineral content, as well as high humidity due to rains in the mining area. from Moa, Holguin. .

Following the announcement of the Cuba deal on Friday, shares of Sherritt International rose 10.1% at 12:55 p.m. in Toronto.