Sherritt International said its cobalt refinery at Fort Saskatchewan, Alberta, has begun shutting down. The reason is not fire or equipment failure. Expanded U.S. sanctions on Cuba, imposed in May, stopped the feedstock shipments the plant relies on.
The Toronto-based nickel and cobalt producer had warned earlier that the refinery would run only until mid-June, using the inventory it had on hand. That date has now passed. Shutdown procedures are in place, and Sherritt is keeping the people and equipment required to hold the site in a safe and secure state.
Sherritt mined nickel and cobalt at its Moa joint venture in eastern Cuba, then refined the material near Edmonton. The refinery stays idle until Moa mining and processing resume and the feed pipeline is rebuilt. The company says it cannot give guidance on when that will be, and it continues to suspend its direct participation in the Cuban venture. In the meantime it is saving cash, controlling costs and doing maintenance so the plant can restart if conditions allow. Fertilizers and sulphuric acid, which it produces for resale, keep some revenue coming in.
Natural News, in a piece republished by SHTF Plan, describes the plant as Canada’s only cobalt refinery and its closure as permanent.
Fire adds to the strain
The same report points to a second problem in Alberta. Wildfires have halted 344,000 barrels per day of oil production, or 7% of Canada’s crude output. Cenovus, MEG Energy and Canadian Natural are among the producers facing disruption as fires close in on sites. Flames are also approaching another 470,000 barrels per day of capacity, and the report warns that damage or extended shutdowns could reverberate across the continent for months.
Shell declared force majeure at its Scotford upgrader after a unit tripped. The plant has a capacity of 300,000 barrels per day and turns oil sands bitumen into light synthetic crude. A 65-day maintenance turnaround was due to begin this month. Two trading sources said Shell had cut March deliveries by approximately 20%.
U.S. refineries source 60% of their crude from Canada, the account notes, and could pay far more as they scramble to replace volumes.
What analysts expect
The Natural News authors say the two events together point to higher gasoline prices, pricier batteries and electronics, and doubts about the reliability of North American supply chains. They write that policymakers on both sides of the border need to act. Observers are watching to see whether the fires force additional production cuts, and whether Sherritt can restart once the political situation around Cuba changes.
