The chief executive of Stillwater Mining Co has said that carmakers are 'switching back' to palladium for use in catalytic converters because of the price differential between it and platinum.

Frank McAllister made his comments at the Denver Gold Forum 2003, which was held in Denver and sponsored by the Denver Gold Group.

The automotive industry turned its back on palladium after its price rose to $1,096 an ounce in January 2001, but the current high price of platinum - recently estimated at $700 an ounce compared to $215 for palladium - means carmakers are switching their attentions to palladium for use in catalysts.

Mr McAllister was clear about the difficulties some producers have with palladium and the fact that confidence in the metal 'needs restoring.'

To this end, he said, he was organising meetings between Norilsk Nickel - the world's largest producer of palladium - and manufacturers to discuss long-term contracts.

Such dialogue would not previously have been feasible but producers' concerns about Russian law and other issues have been allayed somewhat by Norilsk's purchase of a majority interest in Stillwater.