Sherritt International is preparing to temporarily lay off nearly half its Canadian workforce as a US investment firm associated with a former Trump administration official pursues majority ownership of the struggling nickel and cobalt producer, whose Alberta refinery remains idle following expanded American sanctions against Cuba.
The company announced Wednesday that approximately 280 employees, representing 47% of its Canadian workforce, will be affected. The layoffs are expected to last approximately 90 days, although workers could return earlier if operations resume.
Gillon Capital, the family office of the Washburne family, signed a non-binding agreement with Sherritt in May that could allow it to acquire a 55% ownership stake through warrants.
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Ray Washburne, a Republican fundraiser, served as president and chief executive of the Overseas Private Investment Corporation during Trump’s first administration and subsequently joined the president’s intelligence advisory board, according to The Canadian Press.
However, Gillon has assumed a role beyond negotiating the prospective acquisition.
Sherritt disclosed on October 20 that it had worked closely with Gillon to obtain emergency licences from the US Treasury Department’s Office of Foreign Assets Control.
The first licence, received October 19, permits fuel and sulphur shipments to Sherritt’s Moa nickel operations in Cuba. Additional licences are necessary before mining and processing can restart and refining can resume in Alberta.
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The company said the licence was also the first in a series required for Gillon’s proposed acquisition.
President Donald Trump expanded sanctions against Cuba through Executive Order 14404 on May 1, authorizing restrictions affecting foreign companies operating in sectors including metals and mining.
Sherritt suspended direct participation in its Cuban joint ventures on May 7, citing the new sanctions environment.
Its Fort Saskatchewan refinery stopped processing nickel and cobalt on June 22 after exhausting feedstock inventories. The facility relies on material supplied through its Cuban operations.
Sherritt describes the refinery as North America’s only significant cobalt refinery and one of three nickel refineries.
The disruption has intensified existing financial pressures. Sherritt reported a $71.1 million net loss from continuing operations in the second quarter, compared with earnings of $10.4 million a year earlier.
Its June 30 balance sheet showed $323.2 million in loans and borrowings, while available Canadian liquidity stood at $80.1 million.
In September, Sherritt warned that uncertainty surrounding its liquidity raised significant doubt about its ability to continue as a going concern.
The company is pursuing financing and recapitalization alongside the outstanding regulatory approvals.
An alternative proposal involving Glencore, Kyma Capital, and a US investor has also surfaced, although Sherritt previously described that proposal as non-binding and not executable.
During the layoffs, fertilizer and sulphuric acid production, maintenance, and environmental protection activities will continue at Fort Saskatchewan.
