Stillwater Mining Company revealed yesterday (2nd June) that it is hoping General Motors (GM) will honour its contractual commitments despite filing for bankruptcy.

The entire palladium production and 70 per cent of the platinum output from the company's mines in south-central Montana are linked to contracts with GM and Ford.

However, GM is facing major restructuring and Stillwater is hoping its deals for the metals - which are used in catalytic converters in cars - will be honoured by the automaker.

Spokesman John Beaudry told the Associated Press: "In the best-case scenario, the contract is honoured and we move forward and GM emerges from the bankruptcy as a stronger company.

"In the worst case, they could ask to revisit the terms of the supply contract."

Furthermore, Stillwater warned in a financial filing with the Securities and Exchange Commission last month that a GM bankruptcy could have "widespread consequences".

Although the exact value of the GM contract remains unclear, what is known is that GM and Ford are paying a fixed rate for platinum and palladium, regardless of market prices.

However, Steve Gentry, a spokesman for the United Steel Workers Local 11-0001 miners' union, revealed that the Ford deal is considerably more valuable to Stillwater.

"I haven't heard anything that would concern me, at least up until this point. Their major contract is not with GM; it's with Ford and Ford hasn't gotten into all this," he told the news provider.

Mr Beaudry also revealed that Stillwater is so far "meeting or exceeding" targets it established during its reorganisation plan late last year.

Sources:

GM bankruptcy watched by Stillwater Mining (02/06/09)

GM closely watched by Stillwater Mining (02/06/09)

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