As diplomatic ties between South Korea and Cuba open up the possibility for greater mineral cooperation, concerns have arisen that the Helms-Burton law (Cuban Liberty and Democratic Solidarity Act) could become a new point of contention. This concern is based on the potential for business operations to be disrupted, similar to the case experienced by Japan’s Panasonic.
Industry sources reported yesterday that local mining companies in Cuba have begun warning South Korean firms about the risks associated with the Helms-Burton Act.
The Cuban mining companies stated, “With the diplomatic thaw between South Korea and Cuba, interest in Cuban nickel and cobalt from South Korean firms is increasing. However, the Helms-Burton Act could pose significant trading risks.”
The Helms-Burton Act, introduced by U.S. Senator Jesse Helms and Representative Dan Burton, penalizes foreign companies that do business with Cuba—the act aimed to isolate Fidel Castro’s regime internationally.
While the Helms-Burton law was enacted in 1996, its enforcement was suspended in 1997 due to opposition from the EU, Canada, and other countries concerned about potential damage to their companies. However, it was reinstated during the Donald Trump administration in 2019.
Cuban mining companies have expressed concerns about the potential impact of the Helms-Burton Act, citing Panasonic’s experience as a cautionary tale. Panasonic, producing automotive batteries using Cuban nickel and cobalt, signed a deal with electric vehicle manufacturer Tesla in 2018. However, the transaction ultimately fell through due to complications arising from the Helms-Burton Act.
In 2019, two Cuban-American businessmen filed a lawsuit against Miami-based Carnival Cruise Line, claiming the company had used port facilities seized by the Cuban government without authorization. The Helms-Burton Act allowed U.S. citizens, including naturalized Cubans, to seek compensation for properties confiscated during the Cuban Revolution.
Since establishing diplomatic relations with South Korea in February of this year, Cuba has seen a surge in potential cooperation opportunities. Although direct trade remains limited due to U.S. sanctions, strengthening diplomatic ties and the expected opening of a permanent diplomatic mission could lay a stronger foundation for economic collaboration. In 2022, trade between the two countries amounted to $14 million in exports and $7 million in imports through third-party nations.
Notably, there is significant potential for collaboration in critical mineral supply chains. Cuba boasts substantial deposits of nickel and cobalt, which are crucial for producing secondary batteries. The country ranks fifth globally in nickel production and fourth in cobalt reserves.
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