The Cuban government has announced the country will produce 50,000 tonnes of nickel and cobalt sulfides in 2018.

Nickel is a primary source of income for the communist state, the world’s 10th-largest nickel producer, with production targets announced annually by the country’s state-owned nickel miner Cubaniquel.

The director of Cubaniquel was quoted by local media as saying that the company has faced issues with efficiency at its major nickel-producing sites, and that each one requires “constant investments” in modernization so they can continue operating.

Challenges in investment could be taking bites out of projected targets. In 2017, Cubaniquel posted a target of 54,500 tonnes of nickel and cobalt sulfides, but according to Reuters, business sources close to the industry said final tonnage was under 50,000.

While Cubaniquel announces production targets, it does not update actual production figures. Cubaniquel has a joint venture agreement with Canada’s Sherritt International (TSX:S) to operate the Moa joint venture in Eastern Cuba.

Total nickel production at the plant in Q1 2018 was 5,708 tonnes, with the proceeds split 50/50. The Canadian miner therefore reported 2,854 tonnes of finished nickel.

According to Sherritt, this result is down 26 percent from the 3,840 tonnes (or 7,680 tonnes in total) produced by the Cuban mine in Q1 2017.

Sherritt’s Q1 results report includes insight into the reasons why nickel production took a hit in Q1, with the company blaming high rainfall and transportation delays.

The company is confident that those factors have since been alleviated, and it expects to achieve “the lower end of its 2018 production guidance for finished nickel and finished cobalt at Moa.”

Sherritt CEO David Pathe said, “we are bullish about our prospects for the balance of 2018 given the favorable outlook for nickel and cobalt prices due to favorable demand trends, particularly within the electric vehicle battery market.”

Nickel is a key component in the lithium-ion batteries used to power electric cars, although most demand for the metal comes from the stainless steel sector.

For the remainder of the 50,000 tonnes of nickel, Cubaniquel is the full owner of the nearby Che Guevara plant, which is projected to produce 19,000 tonnes of nickel in 2018.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.