Nickel miner Sherritt International Corp. is looking for a new CEO, and the ideal candidate must be willing to forgo ties to the United States for the foreseeable future.
Sherritt Sherritt chief executive David Pathe announced on Monday that he will step down next year, and the Toronto-based company has began a search for his successor. Mr. Pathe, 50, ran Sherritt for the past eight years, steering the company through a wrenching restructuring that concluded in August. The company is now seeing increasing demand for its metals from electric-vehicle battery makers.
Sherritt mines nickel and cobalt in Cuba, at a joint venture partly owned by the Cuban government, then refines the metals at a plant in Alberta. Working on the Caribbean island means the company and its executives potentially face penalties under U.S. government sanctions known as the Helms-Burton Act, risks that are heightened when doing business or travelling in the U.S.
Being CEO at Sherritt means weighing a job that paid $3.3-million last year against the headache of potential U.S. sanctions. “Given the broader challenges in recruiting talent due to the implications of the punitive U.S. Helms-Burton Act against Cuba, we anticipate that it could take some time to find a suitable replacement,” mining analyst Orest Wowkodaw at Scotia Capital Inc. said in a report on Monday.
U.S. President Donald Trump toughened Cuban sanctions over the past four years. One element of the Helms-Burton Act states that “any person who ‘traffics’ in property that was confiscated by the Cuban government on or after Jan. 1, 1959, may face liability for the full value of the confiscated property, in some cases times three,” according to a recent report from law firm Bennett Jones LLP.
The Canadian government has consistently said the Helms-Burton Act is not “recognized nor enforceable in any manner in Canada.”
Mr. Pathe, a former lawyer at Osler Hoskin & Harcourt LLP, joined Sherritt as assistant general counsel in 2007, became chief financial officer in 2011 and was named CEO in 2012. He sold the company’s coal business in 2014 for $946-million, exited an investment in an unprofitable mine in Madagascar and restructured or retired $3.5-billion in debt over the past six years.
“David’s tenure as chief executive was over a time as difficult to manage as any the company has faced in its over 90-year history,” Richard Lapthorne, chair of the Sherritt board, said in a release. He said Mr. Pathe rebuilt the company “while steadily improving performance from operations despite no help from the nickel price and increasingly hostile U.S. policy toward Cuba.”
Sherritt’s strategy ahead is to increase the efficiency of its mining and refining operations to better serve customers such as battery makers. “I leave Sherritt knowing that the company has more runway to take a leading market position in the coming electronic-vehicle revolution,” Mr. Pathe said on Monday. “The time is right for someone new to take Sherritt forward to the next stage of its history.”
Sherritt is a relatively small player in the global mining industry, earning $11.4-million on revenue of $115.3-million in the most recent quarter. The dominant players in its sector – Brazil’s Vale and Russia’s Norilsk Nickel – produce 10 times more nickel.
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