Map and Description
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Incorporated in 1927 as Sherritt Gordon Mines Limited, Sherritt has deep Canadian roots; it is one of the oldest Canadian-owned metals producers still in operation. Sherritt International was established in 1995 as the commodity metals and technologies successor to the original Sherritt Gordon Mines Limited. Refer to “Sherritt’s History”, below, for more information.
Sherritt’s History – Key Dates and Events
Sherritt Gordon Mines Limited is incorporated to develop resources, principally base metals.
Sherridon Development Company is formed to provide services and build the Town of Sherridon, Manitoba.
Sherridon mine production begins, shipping copper concentrate to the new nearby Hudson Bay copper smelter.
First significant discovery of nickel at Lynn Lake, Manitoba.
Sherridon mining and milling equipment is transferred to a new nickel mine site at Lynn Lake.
Sherritt begins to fund the University of British Columbia (UBC) to experiment with hydrometallurgical techniques for ore processing.
UBC discovers a direct ammonia leach method that has the potential to simplify the processing of nickel concentrates.
Sherritt builds a pilot plant in Ottawa to further develop the ammonia leach process.
Sherritt builds a second pilot plant, incorporating the hydrogen-reduction process pioneered by Chemical Construction Corp.
Sherritt provides partial funding for the Canadian National Railway (CNR) to construct a railway line from Sherridon to Lynn Lake. Sherritt builds a third pilot plant in Ottawa to finalize the design for a commercial refinery. Closure of the Sherridon mine takes place.
Construction begins on the refinery at Fort Saskatchewan, Alberta. The site was chosen for its abundant supplies of water and natural gas (required to make the ammonia for the refinery), its location on the CNR line and availability of skilled labour.
Ore production from the Lynn Lake mine begins and concentrate is shipped by rail from Manitoba to Alberta.
Construction and start-up of the nickel refinery, including production facilities for by-product fertilizer, are completed at the Fort Site.
Sherritt’s research division is transferred from Ottawa to Fort Saskatchewan; pilot plant equipment is transferred to form the basis of a cobalt refinery. Inland Chemicals builds a 100 tonnes/day sulphuric acid plant to supply the Fort Saskatchewan refinery.
Sherritt buys hydrometallurgical technology patents from Chemical Construction, including those used in the Moa Nickel Site, then under construction.
Sherritt develops a coinage business, starting with shipments of nickel blanks from Fort Saskatchewan’s rolling mill to the Royal Canadian Mint. Within a decade, the rolling mill is producing coin blanks for multiple countries as well as commemorative medallions. Sherritt conducts its first external technologies project, developing a nickel process for Marinduque Iron Mines in the Philippines.
Sherritt expands its ammonia plant, constructs two urea production trains (120 and 150 tonnes/day), and expands into the phosphate fertilizer business with a new phosphate plant at the Fort Site, using phosphate rock imported from Florida.
Sherritt licenses its process for acid pressure leaching of nickel-cobalt sulphides to Outokumpo in Finland.
Sherritt starts construction on the Fox copper mine and the Ruttan copper-zinc mine in Manitoba.
Sherritt licenses its ammonia pressure leach process for nickel concentrates and mattes to Western Mining Corp. in Australia, and its acid pressure leaching process for PGM-bearing nickel-copper mattes to Impala Platinum in South Africa. Sherritt starts pilot testing its laterite leach process for the Marinduque project.
Shipment of concentrates from the Fox mine and the Ruttan mine begins.
Production begins of refined nickel from the Surigao nickel laterite project in the Philippines (the mine was on Dinagat Island and the refinery on Nonoc Island), under licence from Sherritt. This is the first commercial production of refined nickel directly from laterite ore.
Closure of the Lynn Lake mine takes place. Sherritt’s nickel refinery becomes a toll processor. Sherritt purchases Thio-Pet Chemicals, a producer of hydrogen sulphide used in the Fort Saskatchewan refinery. Sherritt begins producing nickel-bonded steel coinage products and ultrafine cobalt powder.
Sherritt produces medals and commemorative medallions for the Commonwealth Games.
Sherritt presents the City of Fort Saskatchewan with a clock tower to celebrate 25 years of operation. Sherritt begins production of cobalt-samarium powder for rare-earth magnets.
Sherritt debottlenecks the sulphuric acid plant to achieve a production rate of 600 tonnes/day. (Subsequent work through the 1990s/2000s results in an 800 tonnes/day operation.)
The first zinc pressure leach plant, at Cominco in Trail, British Columbia, is commissioned. Other facilities follow over the next 12 years at Kidd Creek in Ontario, Ruhr-Zink in Germany and Hudson’s Bay Mining and Smelting in Manitoba. New NBS coinage plant opens, increasing capacity by a factor of five. TuffStuds enters commercial production.
Commissioning of Rustenburg matte leach refinery takes place in South Africa, under licence from Sherritt.
Sherritt commissions a new world-scale (1,000 tonnes/day ammonia, 900 tonnes/day urea) nitrogen fertilizer plant in Alberta. Impala Platinum cobalt refinery in South Africa and Kidd Creek zinc pressure leach facility in Canada are commissioned, under licence from Sherritt.
Fox mine closes. Sherritt creates and floats SherrGold, retaining a 60% interest. Start-up of Western Platinum matte leach refinery in South Africa occurs, under licence from Sherritt.
The Fort Saskatchewan refinery celebrates one billion pounds of cumulative nickel production. Start-up of SherrGold’s MacLellan gold mine occurs. The Surigao nickel refinery is officially closed.
The aureate-bonded nickel coinage plant opens, contracted to supply Canadian “loonie” dollar coin blanks. Sherritt acquires United Chemical Company. Ruttan mine is sold to Hudson’s Bay Mining and Smelting.
The company sells its interest in SherrGold and is renamed Sherritt Gordon Limited. Ultrafine copper pilot plant is commissioned.
Sherritt and the governments of Alberta and Canada create Westaim, a co-operative venture designed to develop new advanced-materials technologies. NBS coinage plant capacity is doubled. Ultrafine copper commercial plant is commissioned.
Major investor Ian Delaney leads a successful proxy contest for control of Sherritt.
Sherritt acquires Canada Northwest Energy Limited, a Calgary-based producer of oil and natural gas. The company begins acquiring feed from a nickel mine in Moa, Cuba, for the Fort Saskatchewan refinery.
Sherritt Gordon Limited is renamed Sherritt Inc. Sherritt completes an extensive refurbishment and expansion of its Fort Saskatchewan nickel and cobalt refinery to allow for efficient processing of mixed sulphides from the Moa Nickel Site, Cuba.
Sherritt acquires fertilizer assets from Imperial Oil Limited and becomes the largest producer of nitrogen and phosphate fertilizers in Canada and one of the largest fertilizer producers in the world. Sherritt extends its nickel and cobalt refining business into a vertically integrated mining/refining business in a joint venture with the General Nickel Company of Cuba.
Sherritt Inc. creates Sherritt International Corporation, an independent Canadian public company. Sherritt Inc. retains the fertilizer business, Canadian oil and gas properties and the specialty metals and technology businesses.
Sherritt Inc. changes its name to Viridian Inc., which merges with a wholly owned subsidiary of Agrium Inc. Sherritt International acquires certain utilities, fertilizer and other assets in Fort Saskatchewan, from which it produces and sells fertilizer, and supplies inputs and utilities to the nickel and cobalt refinery.
Sherritt acquires Dynatec International Ltd. and merges it with Sherritt’s metallurgical consulting business, creating Dynatec Corporation, which is spun out as a separate public company.
Sherritt creates Sherritt Power Corporation, which constructs and operates power generating facilities in Cuba through a one-third ownership in Energas S.A.
The Fort Site stops effluent discharge to the river; effluent flows to the Alberta Capital Region Wastewater Treatment Facility via the City of Fort Saskatchewan’s collection system.
Sherritt and a partner acquire Canada’s largest coal producer, Luscar Ltd., creating the Luscar Energy Partnership.
The Luscar Energy Partnership acquires the Canadian thermal coal assets of Fording Inc. The Fort Site’s ammonium phosphate plant is converted to produce granular ammonium sulphate.
Sherritt celebrates 50 years of operation at the Fort Saskatchewan refinery (now COREFCO). Through its minority interest in Energas, Sherritt begins construction on an 85 MW expansion in Cuba.
The Fort Saskatchewan refinery (now COREFCO) celebrates two billion pounds of cumulative nickel production. A two million tonne expansion of the Coal Valley mine is announced; construction is completed the next year.
The metals expansion project is initiated at the Moa Nickel Site, Cuba. At Energas, an 85 MW power expansion is completed and a new 65 MW expansion begins.
Sherritt acquires Dynatec Corporation, including its 40% ownership in the Ambatovy Nickel Project. Sherritt Technologies is formed, including the former Dynatec Metallurgical Technologies operations, to utilize and license the Corporation’s 50-plus years of hydrometallurgical research, development and commercial process implementation. The 65 MW power expansion is completed in Cuba.
The 150 MW power expansion at Boca de Jaruco in Cuba commences.
Construction at Ambatovy is completed.
Production of finished nickel and cobalt commences at Ambatovy.
Sherritt achieves commercial production at Ambatovy. Sherritt sells its coal business.
Sherritt achieves a production test milestone and financial completion at Ambatovy.
Sherritt celebrates 90 years in business in Canada.
Sherritt reaches three billion pounds of nickel production at its refinery in Fort Saskatchewan. Sherritt and General Nickel Company S.A. celebrate the 25-year anniversary of the formation of the Moa Joint Venture on December 1, 2019. Ambatovy is deemed non-material for Sherritt’s sustainability disclosures, including the 2019 Sustainability Report.
Divisions and Products
Sherritt has three operating divisions, as well as a corporate office and a commercial and technologies group. These operations are accounted for in our financial and sustainability reporting.
| Entity | Operations, Products and Markets |
|---|---|
| Metals |
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| Oil & Gas |
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| Power |
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| Corporate and Technologies |
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A more detailed overview of our business and corporate structure can be found in our 2019 Annual Information Form.
In this report, references to “our” or “Sherritt” are to Sherritt International Corporation, together with its subsidiaries and joint ventures, and the activities referenced herein may be conducted directly by Sherritt International Corporation, or indirectly by such subsidiaries and joint ventures. Our management approaches and performance are subject to and in accordance with the terms of our joint venture and operating agreements, and include approaches taken by Sherritt International Corporation and the boards, executive committees and management of our subsidiaries and joint ventures.
Economic Performance
The emergence of the electric vehicle market has created optimism about the nickel and cobalt markets as both metals are key components in battery technologies. As a low-cost, high-purity producer of Class 1 nickel primarily in briquette form, our product is ideally suited to battery production, positioning Sherritt to meet this growing demand.
Sherritt ended 2019 with more debt than the previous year and with cash, cash equivalents and short-term investments equal to $166.1 million (a decline from 2018). Despite the positive effects that operational excellence initiatives had on driving increased production in FY2019, net direct cash cost for 2019 rose in the year, reflecting the dramatic 61% year-over-year decline in cobalt prices.
Sherritt’s efforts to preserve liquidity were reflected in a number of austerity measures implemented throughout 2019, including the elimination of discretionary expenditures, the deferral of non-critical projects and limiting the number of new hires in response to volatile commodity prices and increased U.S. sanctions against Cuba.
Building on our progress in recent years, Sherritt’s 2020 focus will be on the following strategic priorities:
- Preserve liquidity and build balance sheet strength
- Optimize opportunities in the Cuban energy business
- Uphold global operational leadership in finished nickel production from laterites
- Improve organizational effectiveness, including a focus on Operational Excellence and a commitment to strive for leadership in diversity and inclusion
Please refer to our 2019 Financial Results for detailed information on our economic performance and an overview of how we plan to execute our 2020 strategy.
2019 Key Indicators
Financial
| (C$ millions, except per share data, as at December 31) | 2019 | Change |
|---|---|---|
| Combined revenue1 | $546.2 | (9)% |
| Adjusted EBITDA1 | $47.3 | (63)% |
| Combined free cash flow1 | $(24.2) | 467% |
| Net earnings (loss) from the period | $(367.7) | (473)% |
| Net loss from continuing operations per share | $(0.92) | (338)% |
| Cash, cash equivalents and short-term investments | $166.1 | (20)% |
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1 For additional information, please see the Non-GAAP Measures section of the Management’s Discussion and Analysis in our 2019 Financial Results.
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2019 Production
- Nickel: 33,108 tonnes (100% basis)
- Cobalt: 3,376 tonnes (100% basis)
- Oil: 4,175 barrels of oil equivalent per day
- Electricity: 736 gigawatt hours (33 1/3% basis)
People
- Full- and part-time employees and permanent contractors: 3,344 (including the Cuban workforce at the Moa Nickel Site)
- Temporary workforce: 50
Our Supply Chain
Sherritt is thinking more and more about what it means to “supply a sustainable future” and the role commodities play in manufacturing and consumer products. Like most commodity producers, we play the role of a value-adding producer in a long supply chain. We require significant goods and services as inputs (the upstream supply chain) to develop bulk products, which we sell to customers that produce finished products for consumers (the downstream supply chain).
As the table below demonstrates, many of our products contribute materially to global sustainable development. For instance, we provide energy to the Cuban people, we produce fertilizer for agricultural development, and our high-quality metals are used in clean-technology infrastructure and products such as alloys for renewable power applications, batteries for electric and hybrid electric vehicles and grid power storage systems, buildings, airplanes, household goods and appliances, medical devices and much more. For more information on how nickel is used in society, visit the Nickel Institute’s website.
| Business | Key Inputs | Sherritt’s Contribution | Key Customers |
|---|---|---|---|
| Metals | Energy products, sulphuric acid, sulphur, limestone | Mining, processing and refining to produce finished nickel and cobalt and a fertilizer by-product |
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| Oil & Gas | Current technological drilling practices | Drilling and extraction of oil |
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| Power | Raw natural gas | Processing of gas to produce electricity and by-products, such as condensate and liquefied petroleum gas |
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Refer to Operating Ethically for a description of how Sherritt applies anti-corruption and human rights requirements to its supply chain.