Russian owner Norilsk Nickel takes step toward selling Stillwater’s Montana platinum mines

Norilsk Nickel may sell Mont. precious metal mines

BILLINGS, Mont. — Russian metals company Norilsk Nickel is exploring the sale of its Montana platinum and palladium mines after prices for the precious metals rebounded sharply in recent months.

Norilsk has held a controlling stake in Columbus, Mont.-based Stillwater Mining Co. since 2003.

Its two mines in the Beartooth Mountains southwest of Billings produced 529,900 ounces of palladium and platinum last year — the only raw source of the metals in the country.

Stillwater spokesman John Beaudry said Thursday that a sale was not considered imminent. But with metals prices at their highest level since 2008, Norilsk filed a notice Wednesday with the Securities and Exchange Commission saying it could sell “all or a portion” of the Montana company.

Stillwater executives knew a sale of Norilsk’s 53 percent stake was on the table but were not involved in the decision to pursue that option, Beaudry said.

Even if a sale took place, Beaudry said the company’s production record — coupled with a favorable metals market — makes a shut down of the mines unlikely.

“Given the results that have been achieved the in the last year,” he said, “it’s hard to imagine that any kind of worst-case scenario would happen.”

The company had revenues of $394 million in 2009. It employs about 1,300 people at the mines and at its corporate offices and smelter in Columbus. That’s down from about 1,600 when Norilsk took over.

Platinum and palladium are used in jewelry, to make catalytic converters that screen vehicle pollution, and for other industrial purposes.

Norilsk said in Wednesday’s filing that it controls 51.3 percent of Stillwater’s stock, or almost 50 million shares. The company bought into Stillwater in 2003 with $100 million in cash and a large quantity of palladium.

There has been talk of a sale before. When precious metal prices were collapsing in 2008, the Moscow Times reported that Norilsk Nickel was open to selling its stake in Stillwater. At that time, it owned 55 percent of the company, and Norilsk’s investment was said to be worth about $230 million. The value of Norilsk’s share has grown to almost $750 million since metals prices rebounded and the company’s stock rose.

Stillwater shares were unchanged at $14.98 Thursday after jumping 76 cents, or 5.3 percent, Wednesday. The stock is up more than $13 from a low of $1.76 in November 2008.