Governor wants GM to honor contract with U.S. mine

BILLINGS – Gov. Brian Schweitzer is calling on the Obama administration to force General Motors to honor its contract with a Montana mining company instead of going overseas to buy the precious metals used to control vehicle pollution.

By failing to shield the platinum and palladium mines, the Democrat said Friday that the administration had shown a bias against his state.

GM is shedding its contracts with Stillwater Mining Co.’s platinum and palladium mines as part of the automaker’s emergence from bankruptcy.

GM was effectively subsidizing Stillwater, often paying above market price for the metals. Since 2003, the mines have been majority-owned by a Russian company, Norilsk Nickel.

GM’s reorganization is fueled by $50 billion in government loans.

Platinum, palladium and a third metal produced by Stillwater, rhodium, are used in catalytic converters to control car pollution.

Columbus, Mont.-based Stillwater runs the only mines in the United States producing the metals, about 90 miles southwest of Billings.

A White House spokesman declined comment.

Stillwater Vice President John Stark said the contract cancellation will be challenged at a July 22 hearing in U.S. Bankruptcy Court in New York.

GM defended its decision to cancel the Stillwater contract, saying the deal had been “uncompetitive” and could have hobbled its efforts to repay the government loan.