BILLINGS – Stillwater Mining Company on Tuesday reported that 2010 was its best year in almost a decade, as the company benefited from strong platinum and palladium prices and renewed auto industry demand for the precious metals
Billings-based Stillwater released year-end figures that showed a 2010 profit of $50.4 million — rebounding from a 2009 loss of almost $9 million. Revenues were up more than 40 percent, to $555 million.
The year-end results follow the company’s purchase of a large platinum and palladium reserve in Ontario, the revival of a supply agreement with General Motors and Russian mining giant Norilsk Nickel’s sale of its majority stake in Stillwater.
Stillwater shares fell more than 6 percent, or $1.60, to $22.75 in morning trading. The company operates the only platinum and palladium mines in the U.S., in the Beartooth Mountains southwest of Billings.
Stillwater suffered in 2008 and 2009 when precious metals prices plummeted and a bankrupt General Motors cancelled its supply contract for palladium used to make catalytic converters.
But chief executive officer Frank McAllister said in a Tuesday conference call with investors that he expects the conditions that allowed the company to rebound will hold steady — unlike a short-lived palladium price spike seen a decade ago.
McAllister cited rising demand for automobiles from developing nations and the apparent depletion of a large stockpile of precious metals that had been held by the Russian government.
“Circumstances are fundamentally different today than they were a decade ago,” he said. “Today, rather than merely unbridled speculation, the basic principles of supply and demand appear to be the operative dynamic.”
The increase in revenues for 2010 came despite a drop in production from Stillwater’s mines near Nye and McLeod, by about 8.5 percent, to 485,100 ounces of platinum and palladium.
The average sales price increased from $549 an ounce to $721 an ounce. The company also saw an upswing in recycled platinum and palladium, from 251,000 ounces in 2009 to almost 400,000 ounces last year.