Stillwater Mining Co., the U.S. miner facing demands for change from an activist investor, said palladium prices will continue to outperform platinum this year on rising auto industry demand and a lack of new mine supply.
It’s “highly probable” that palladium prices will increase to reach 65 percent of platinum’s value per ounce, Stillwater Chairman and Chief Executive Officer Francis McAllister said yesterday by phone. He declined to provide a timeframe.
Palladium futures have risen 7.6 percent this year to $756.85 an ounce. That’s 48 percent of the platinum spot price of $1,580.10, compared with an average of 42 percent in 2012 and 30 percent in 2003. Platinum futures have risen 2.4 percent in 2013.
Stillwater, which operates mines in Montana, produces roughly three ounces of palladium for each ounce of platinum, McAllister said. The Billings, Montana-based company will benefit because its costs have risen at a slower rate than competitors, he said.
The company is facing calls from Clinton Group Inc. to retire McAllister and reassess plans for projects in Argentina and Canada. It has nominated an eight-person slate of directors that includes former Montana Governor Brian Schweitzer.
Shareholders should vote for management’s slate of directors, Stillwater said yesterday in a statement.
“We’ve been on a multiyear plan at Stillwater for the purpose of making sure that we would have a future, number one, and number two is that we would be able to maximize that future for our shareholders,” McAllister said. “We don’t want to be sidetracked from that course.”