Russians buy key U.S. metals supplier

COLUMBUS, Mont., Nov. 22 (UPI) -- The nation's sole supplier of the strategic minerals, platinum and palladium has been sold to a Russian firm for $100 million in cash and $241 million in the mineral palladium.

Stillwater Mining Co., said that it is selling a controlling interest in the company to the Russian metals giant MMC Norilsk Nickel.


The total investment by Norilsk Nickel will be approximately $341 million, which represents a value of $7.50 for each Stillwater share.

Stillwater shares closed on Thursday at $7.03. After completion of the transaction Stillwater's total outstanding shares will be 89.1 million common shares.

The deal, announced Wednesday, gives Norilsk Nickel a 51 percent controlling interest in Stillwater, with an option to increase the stake to 56 percent.

The sale also requires Stillwater to negotiate a contract with Norilsk under which Stillwater agrees to buy at least 1 million ounces of palladium annually from Norilsk to sell to Stillwater customers.

Stillwater, which has rich reserves of both metals, has been hard hit by depressed metals prices. It said it will use cash from the sale to pay off some of its estimated $220 million in debt.


Stillwater's Chairman and Chief Executive Officer, Francis R.McAllister said, "This agreement provides a unique opportunity for a Russian company to partner with a U.S. company and we firmly believe that the Norilsk Nickel affiliation will have a positive long-term effect for Stillwater and its shareholders."

Based in Columbus, Mont., Stillwater Mining Co. is the only U.S. producer of palladium and platinum and is the largest primary producer of platinum group metals outside of South Africa.

Platinum and palladium are among the world's scarcest metals. Both are considered strategic minerals and possess unique chemical and physical qualities that make them vital industrial materials in the production of computer equipment, and a number of other industrial applications.

As of Friday morning the price of platinum on the New York Mercantile Exchange was $588.00 palladium was at $316.00.

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