Norilsk Nickel is considering selling its majority stake in Stillwater Mining Company, it emerged yesterday (7th April).

The Russian mining giant acquired a 51.3 per cent share in the US platinum and palladium producer in 2003 for $100 million and about 877,000 oz of platinum.

However, with prices of both metals now at two-year highs, Norilsk revealed in a filing with the US Securities and Exchange Commission that it is inviting bids for the holding.

In an interview with Reuters, Stillwater Chief Financial Officer Gregory Wing admitted that he was taken by surprise at news of Norilsk's intentions.

"I have seen what you have seen. As a company we will support whatever they do," he told the news provider.

Based on current prices, Norilsk's stake in the only US platinum and palladium producer is worth about $750 million.

The company confirmed that it is looking into the possibility of open market sales, underwritten offerings and privately negotiated sales for some or all of its shares.

JP Morgan analyst John Bridges suggested that another mining company is likely to be interested in striking a deal with Norilsk, before launching a full bid for Stillwater.

"Because of the consolidated nature of the industry, we don't expect a platinum or palladium producer would be allowed to buy the assets on anti-trust grounds," he told Reuters.

"A diversified miner could be interested, though for most of these companies Stillwater might be too small."

Stillwater produced 529,900 oz of platinum and palladium from its two mines in Montana last year, representing a rise of 6.2 per cent from the 2008 figure.

Source:

Norilsk mulls sale of Stillwater Mining stake (07/04/10)

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