Norilsk Nickel has announced that it is willing to consider offers for its 55.4 per cent stake in Stillwater Mining Company as the economic crisis continues to take its toll.

The firm bought its share in Stillwater - which is the lone platinum and palladium producer in the US - for $257 million back in 2003 and it is its only current asset in North America.

However, Chief Financial Officer Oleg Lobanov has confirmed that it is now open to approaches as it is expecting a "hard year" ahead as global demand for industrial goods shrinks.

Speaking at a conference of finance executives, the Moscow Times reports him as saying: "In a crisis situation, cash is king. And we have to prioritise our projects.

"We have been hoping for a synergy with our palladium assets in Russia and the United States, but it hasn't worked out. The crisis has aggravated the situation with Stillwater Mining."

The New York Stock Exchange valued Norilsk's stake in the Montana-based firm at $230 million yesterday (21st October), meaning its market capitalisation stood at $415 million.

Michael Kavanagh, a metals and mining analyst at UralSib, explained that he believes Swiss firm Xstrata and South Africa's Impala Palladium could be potential buyers, although neither have commented on the speculation.

"Stillwater Mining has always been a marginally profitable asset due to its environmental sensitivity and the cost of labour," he told the newspaper.

Mr Lobanov also claimed that Norilsk is continuing to put together its investment strategy for 2009 and is expected to formalise it in mid-December.

However, in light of the Stillwater revelation, it appears likely that the Russian firm, which is the world's largest nickel and palladium producer, will be focusing on projects closer to home.



Source:
Norilsk Open to Offers for U.S. Asset (22/10/08)
http://www.themoscowtimes.com/article/600/42/371831.htm