Stillwater Mine Cuts Palladium Output 45% as North American Supply Tightens Sharply

Nye, Montana — America's only primary palladium mine remains at roughly 60% of its pre-restructuring capacity more than 18 months after Sibanye-Stillwater slashed approximately 700 jobs and consolidated its Montana operations — and the company's leadership has signaled that a full return to prior output levels remains distant.

The production cuts at the Stillwater and East Boulder mines in southern Montana, which together reduced combined platinum and palladium output by approximately 45%, have removed an estimated 140,000–180,000 ounces per year of palladium from North American supply. Simultaneously, Canada's Lac des Îles mine — operated by Impala Canada — is expected to cease commercial production by mid-2026, compounding the regional supply contraction.

North American Palladium Supply: Regional Snapshot

Restructuring and Cost Pressures

The Stillwater cuts were triggered by a brutal period for palladium prices, which collapsed from above $2,300/oz in early 2022 to below $900/oz by mid-2024 — a decline of over 60%. At those prices, the Montana operations were losing approximately $350 million cumulatively. Production costs at the Stillwater and East Boulder mines ran at approximately $1,274/oz in mid-2024, well above then-spot palladium prices.

"We're willing to keep taking some losses, hoping to maintain our market position when the palladium market recovers," Jessica McDowell, Sibanye-Stillwater's head of US operations, told local media in 2024. The company reorganised its mining around the Stillwater East ore body and placed the Stillwater West mine on care and maintenance.

Despite palladium prices recovering to trade near $1,500/oz by early 2026 — well above the company's stated $1,200/oz rehiring threshold — Sibanye-Stillwater has not meaningfully expanded operations. McDowell explained the caution: "We'd ideally see these prices for a year, and then we'd go to work." The company expects 2026 operations to remain at approximately current reduced levels, with only 25 new positions potentially added.

US Anti-Dumping Tariffs on Russian Palladium

Montana's congressional delegation has been active in pushing for further restrictions. Former US Senator Steve Daines led efforts to ban Russian critical mineral imports, arguing that Russia was using environmental and labour cost advantages — including deploying Russian Navy icebreakers to facilitate Arctic exports — to undercut US producers.

"It's difficult for the Montana mines to compete with Russian palladium, which is produced at a much lower cost due to the country's lack of labor or environmental regulations," the company has stated.

The US Geological Survey has estimated that a complete loss of Russian palladium supply could lift US prices by up to 24%. Russia supplied approximately 900,000 ounces of palladium to the US in 2024, equivalent to roughly 40% of US palladium imports and about 20% of total US demand.

Canada's Lac des Îles: The Second Pillar Crumbles

Adding to the North American supply squeeze, Impala Canada's Lac des Îles mine in northwestern Ontario — the country's only primary palladium mine — is expected to cease commercial production by mid-2026 as it approaches the end of its productive life. The closure removes another significant source of primary palladium from a region that is simultaneously witnessing rising demand for supply security from domestic auto and industrial consumers.

Johnson Matthey's May 2026 PGM Market Report confirms that "palladium supply is likely to fall as Canada's Lac des Îles mine nears the end of its life," while "platinum supplies from North America are expected to increase slightly" — reflecting the higher Pt:Pd ratios in Sudbury ores compared to the Stillwater complex.

North American Supply Security — Development Pipeline

With both major North American primary palladium mines in decline, attention has shifted to development-stage projects that could bolster the region's palladium output in coming years. However, new mine development timelines are typically measured in years to decades, and the current palladium price environment (even after the 90% recovery from 2024 lows) remains below levels that would incentivize greenfield investment at scale.

According to the Oregon Group, "as America's only active primary palladium mine in the US is now scaling back output due to cost pressures and Canada's one primary palladium mine is expected to close in 2026 — the focus has shifted to development-stage projects that could bolster North America's palladium output."

Market Implications

The North American supply contraction introduces a crucial counter-narrative to the palladium surplus story. While Johnson Matthey projects a 214,000 oz global surplus in 2026, the loss of regional supply from Stillwater and Lac des Îles creates a bifurcated market where North American consumers face tighter physical availability even as global balances appear loose.

This regional tightness, combined with the 132.83% tariff on Russian palladium, could create significant price dislocations between the London and New York markets and incentivize inventory reshuffling. US industrial consumers — including the auto manufacturers that account for 80–85% of palladium demand — face a structurally tighter domestic supply environment even as global palladium moves toward surplus.

The WPIC has noted that if there is a resolution to the global trade environment, it expects approximately 150,000 ounces to flow out of US vaults — suggesting that above-ground inventories in the US may already be pricing in the supply constraints.

Sources: Sibanye-Stillwater corporate filings, Johnson Matthey PGM Market Report (May 2026), US International Trade Administration, Daily Montanan, Bozeman Daily Chronicle, The Oregon Group, WPIC Platinum Essentials.