Stillwater Mining Company revealed yesterday (8th July) that General Motors (GM) is looking to cancel the pgm metal supply agreement between the two firms.

The troubled US automaker has petitioned the court handling its bankruptcy to reject the rhodium and palladium deal, despite having engaged in nine months of negotiations.

Francis McAllister, Chairman and CEO of Stillwater, admitted that he is "extremely disappointed" by the move and confirmed that the company will file an objection.

He said: "While by nature I am optimistic that we can find a mutually acceptable resolution to this issue, in reality that may not be possible.

"Should pgm prices decline over the next several months, loss of the GM contract ultimately could put our employees, their families and the communities where we live in economic jeopardy."

Although he expressed his belief that the long-term picture for the pgm industry looks positive, he added that Stillwater's operations "are not yet sustainable at current pgm price levels without the benefit of the floor prices in our automotive supply agreements".

Mr McAllister also criticised GM's "disingenuous" decision to continue agreements with foreign palladium producers while abandoning the solitary domestic producer of the precious metal.

Stillwater, which is located in Montana, is the largest primary pgm producer based outside of South Africa and Australia.

Source:

Stillwater Mining Company to Lose Sales Contract Under General Motors Bankruptcy Petition (08/07/09)

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