Norilsk Buys U.S. Mining Firm

Russian metals company Norilsk Nickel has purchased 51 percent of Stillwater Mining Co., Columbus, Mont., according to a report in the Moscow Times.

The Montana company produces about six percent of the world’s platinum and palladium, according to the report. Norisk will pay $340 million for its share of the U.S. firm.

Norilsk CEO Mikhail Prokhorov told the Russian newspaper that Stillwater was prized for its long-term contracts with automotive companies, who use the palladium and platinum in catalytic converters.

The report notes that contracts with Ford, General Motors and Mitsubishi have floors for palladium prices that have been 6 percent higher than the average spot price in 2002.

The Montana mine can also bolster what have been called unpredictable supplies coming from Russia, where working conditions and exporting regulations can drastically change monthly shipping levels.

Along with purchase price, the companies plan to sign an agreement under which Norilsk will sell a minimum of 1 million ounces of palladium each year to Stillwater for resale, according to the Moscow Times. Norilsk is predicting that the deal will be finalized by mid-2003.