Stillwater Mining Company is expecting to produce 495,000 oz of pgms in 2009, it was confirmed today (17th September).

The Montana-based firm suffered a blow in July when its rhodium-palladium supply deal with General Motors was cancelled by the automaker as part of its bankruptcy petition.

However, Standard & Poor's claimed that the loss would only have a minor impact and the latest production estimate is higher than a previous prediction of 485,000 oz pgm.

Meanwhile, a senior figure at the company predicted on Tuesday that pgm prices will enjoy a dramatic recovery over the course of the next two to three years.

The auto industry provides the bulk of demand for pgms - which are mainly used in catalytic converters for vehicles - but the sector has struggled during the economic crisis.

However, Gregory Wing, Chief Financial Officer at North America's largest pgm producer, explained in an interview with Reuters that the tide has begun to turn.

"I really think that the worst of the price drop is over," he told the news provider at the Denver Gold Forum.

"A lot of what's keeping the price up right now is investment interest in those metals."

Mr Wing added that the expected improvement is rooted in the recovery of overall economic activities, rather than a surge in demand in any one particular industry.

Nevertheless, he expressed his belief that the US auto industry - which has been propped up recently by the 'Cash for Clunkers' programme - is now over the worst of its crisis.

Stillwater Mining Company currently has operations at East Boulder and its flagship Stillwater mine, both of which are located on the JM Reef in Montana.

Sources:

INTERVIEW-Stillwater CFO says worst over for PGM prices (17/09/09)

Stillwater loss of GM contract will have minimal impact-S&P (24/08/09)

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