Ian Delaney, the long-time chief executive of Sherritt International Corp. who transformed the company by flying in the face of conventional wisdom and betting big on Cuba, is retiring at the end of the year.
Delaney, who turned 68 last month, will remain chairman of the Toronto-based miner while Sherritt’s chief financial officer, David Pathe, will replace him as CEO on Jan. 1.
He took over the struggling company – then Sherritt Gordon – in 1990 after winning a proxy battle with the help of Eric Sprott, then-president of Sprott Securities, and Bruce Walter of Delaney Walter & Co.
But it was his defiance of the U.S. trade embargo and investment in the Moa joint venture in Cuba that helped Delaney, a former investment banker, make his mark.
Delaney, who was Sherritt’s CEO for much of the last two decades, was often called Fidel Castro’s favourite capitalist . His deal with the Cuban dictator provided the communist country with hundreds of millions of dollars in badly needed foreign exchange in return for mining rights that turned Sherritt into a diversified resources company.
In 1996, Sherritt became the first foreign capitalist company to hold a board meeting in Cuba since Castro’s revolution in 1959.
The company’s investment in 1994 would eventually lead to Delaney and his family being blacklisted by the U.S. State Department and barred from visiting the United States.
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While the deal turned Sherritt into a major player in Cuba, it also made him an enemy of some right-wing U.S. politicians.
“Ian Delaney has made a deal with the devil,” like those who “did business with Hitler’s Germany or Stalin’s Russia,” Marc Thiessen, an aide to Senate Foreign Relations Committee chairman Jesse Helms, was quoted as saying at the time.
Helms, the ultra-conservative Republican Senator from North Carolina, was the co-author of the Helms-Burton Act, which tightened U.S. sanctions against foreigners who invest in Cuba.
Nearly two decades after its initial investment, Sherritt’s Moa joint venture produced 33,972 tonnes of nickel and 3,706 tonnes of cobalt in 2010.
The company also owns oil and gas operations in Cuba as well as a stake in power utility Energas, which has power plants across the country with a combined capacity of 356 megawatts.
Since the Cuban deal, Sherritt has also cashed in on the global commodities boom of the last decade, also betting heavily on coal, expanding its operations in Canada beyond nickel and other metals.
In 2001, Delaney partnered with the Ontario Teachers’ Pension Plan and acquired the Luscar coal business in Alberta that supplies fuel to coal-fired power plants in Alberta and Saskatchewan.
More recently though, Sherritt has faced difficulties.
Its shares (TSX:S) were unchanged in trading Thursday at $5.09, but down from their peak of more than $17 in 2007 during the commodities boom.
In 2009, Sherritt saw an oil production-sharing contract between the Cuban government and Sherritt’s partner Pebercan Inc. (TSX:PBC) scrapped nearly 10 years early after months of efforts to have the Cuban government catch up on missed payments to the company.
Earlier this year, Sherritt extended its work schedule and increased estimated costs for its Ambatovy project in Madagascar. It cited a litany of problems including poor performance by contractors and inaccurate estimates on the project in the island country off the east coast of Africa.
The company has said the capital cost of the project will come in at US$5.5 billion, about 16 per cent more than it had previously predicted.
In the quarter ended Sept. 30, Sherritt more than doubled its profits to $45.5 million or 16 cents a share. That was up from $22.5 million or seven cents a year ago. Revenues rose to $466.4 million from $412.7 million.
Besides its nickel and cobalt operations, the company is also the largest producer of thermal coal in Canada. It also is the largest independent energy producer in Cuba, with extensive oil and power operations across the island.
Sherritt, which has more than 6,800 employees and a stock market value of more than $1.5 billion, also licenses its nickel mining technology to other metals companies.
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