US palladium producer Stillwater would be the logical company to develop any platinum group metals (pgm) opportunities that Norilsk Nickel might find in South Africa.
That’s the view of Stillwater CEO Frank McAllister interviewed on the sidelines of the Denver Gold Forum being held in Denver, Colorado.
Norilsk is the controlling shareholder in Stillwater owning 54.5% of the company. The Russian group is the world’s largest palladium producer which it mines as a by-product from its nickel operations.
Norilsk now has its feet on the ground in South Africa and Botswana through the recent takeover of Lionore Mining International. That gives it control of the Tati Nickel mine in Botswana as well as becoming the joint venture partner in African Rainbow Minerals’ (ARM's) Nkomati Nickel project.
In August, Norilsk director Tav Morgan told a press conference in Johannesburg that the group now had a platform in Africa from which to look for future projects. He declined to comment on whether Norilsk was specifically looking for a pgm play.
Interviewed at the 2006 Denver Gold Forum, McAllister had indicated Stillwater was looking at a possible move into South Africa as part of a diversification strategy.
Asked about developments since then, McAllister commented: "We were looking at a proposal that would have taken us into South Africa and other parts of Africa. It did not work out and that opportunity has gone away."
Questioned about possible involvement in any pgm project that Norilsk might find in South Africa, McAllister replied: "Norilsk took over Lionore primarily for its nickel assets.
"Should they find a pgm project then, logically, it should come to us because Stillwater is the vehicle which would be able to get the best market multiple out of such a project.
There is no guarantee that Norilsk would offer any pgm project it might find to Stillwater.
Asked specifically whether Stillwater was currently looking at a possible pgm project in South Africa with Norilsk, McAllister replied: “No comment.”
In his presentation McAllister predicted that the platinum price could “easily” reach $1,500/oz because of growing demand coupled with supply problems from the South African producers.
He also predicted the palladium price could rise to trade in a range between $400/oz and $500/oz before April next year.
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