“Everything we’ve done since is to make this company sustainable for the future,” he said. “Some of the people I work with think I’m nuts part of the time. But I’m finding out, unless you’re on the edge, you don’t get anything done.”
BY LINDA HALSTEAD-ACHARYA
THE BILLINGS GAZETTE
BILLINGS, MONT. — When Frank McAllister talks about palladium, his passion is palpable.
So when the Stillwater Mining Co. CEO compares the precious metal to a fairy-tale princess, one can’t help but wait for the explanation.
“It’s like Cinderella, really,” he said, smiling. “It’s this pretty thing that’s been kept in the closet. And now it’s emerging.”
OK, at first glance, palladium does appear as a black chunk of rock. And, yes, once it’s refined and polished, it glows with a luster.
For years, the precious metal mined in Montana has filtered pollutants from car exhaust. What’s new is the princess seems poised for the ball. And she’s decked out in stunning white jewelry that is taking the industry by storm.
Palladium is a relative newcomer to the jewelry market, but its entrance has been dramatic. Some in the precious-metals business predict it will incite a revolution.
“I believe that what you’ll see in the next two to three years — it boggles my mind,” said Dawn McCurtain, in charge of marketing for the newly formed Palladium Alliance International. “Palladium gives the opportunity to have a metal that’s precious and pure and that can be put into designs never thought of in the jewelry industry before.”
The seeds of the recent movement took root in China, the world’s largest market for palladium jewelry. There, demand leapt from 70,000 ounces to more than 1 million ounces in the past four years.
“They changed overnight,” McAllister said. “I say, if they can do it, it can be done anyplace.”
The palladium tide has crossed the Pacific, with jewelry manufacturers and designers like Frederick Goldman Inc. and Scott Kay jumping on board. The latter, described as the E.F. Hutton of jewelry (when he talks, people listen), raves about the new trend. He predicts that it will be the industry’s white metal of choice within two years.
The reasons for palladium’s booming popularity seem so obvious it’s a wonder it took so long. In many ways, palladium mirrors platinum: It’s pure, it’s hard, it doesn’t tarnish, it’s hypoallergenic and it shines with a high, white luster.
The difference is, it’s half the heft of platinum, allowing for larger designs. And probably more important, it’s currently less than a third the cost of its pricey relative.
Once popular among pre-Columbian Aztecs and Incas, palladium — named after the Greek goddess Pallas, the goddess of wisdom and the arts, and the embodiment of purity and strength — was not identified as a separate element until 1803.
After a centurieslong hiatus, palladium emerged again as a jewelry metal during World War II.
Fast forward to the waning days of 2000, when McAllister took the helm at Stillwater. Palladium was about to hit a record high — $1,090 an ounce in January 2001 — and the world at Stillwater was about to crash. Within months, three miners were killed, the 9/11 terrorist attacks hit and the price of palladium plummeted to the $340 range. By early 2003, it had hit the bargain-basement price of $150 an ounce.
McAllister knew that forward contracts with the auto industries — the company’s palladium has been “pre-sold” for catalytic converters — guaranteed strong prices through 2010. But he also knew that, barring major changes, the company would fall off a cliff after that.
So he took on a mission. Safety had to be improved and new markets for the mine’s precious metals had to be found.
“Everything we’ve done since is to make this company sustainable for the future,” he said. “Some of the people I work with think I’m nuts part of the time. But I’m finding out, unless you’re on the edge, you don’t get anything done.”