Stillwater PGMs Supply Deal To Expire End 2010; Less Critical

Stillwater Mining Company's (SWC) palladium and platinum supply deal with a major automotive company is being renegotiated as it draws to an end but is less important than it used to be, the company's Chairman and Chief Executive said late Wednesday.

"Our remaining long-term platinum group metals supply contract with Ford Motor Company (F) will expire at the end of 2010," Francis McAllister said in a letter to employees.

"The floor prices in this and other previous automotive supply contracts have provided great benefit to Stillwater during periods of low palladium prices. Whether or not we will be able to renew them on similar terms is not yet known," he added.

But McAllister said the contracts "are no longer as critical to our future as they once were."

This is because the company believes a fundamental palladium market deficit potentially lies directly ahead which will leave incremental supply reliant on existing stocks and recycling, but will still fall short of meeting demand.

-By Andrea Hotter, Dow Jones Newswires; [phone]; [e-mail]