Anglo American Sells Rustenburg Operations to Sibanye Gold

After much anticipation, Anglo American Platinum (JSE:AMS) announced the sale of its Rustenburg platinum operations in South Africa to Sibanye Gold (NYSE:SBGL) on Wednesday morning.
Sibanye will buy the Rustenburg operations for at least R4.5 billion, or about $331 million, including an upfront payment in cash or Sibanye shares of R1.5 billon.
Anglo American is looking to focus on low-cost production, and as such, is shifting towards mechanized operations. As Reuters notes, the Rustenburg mines are more labour-intensive – they employ approximately 16,000 workers.
“We are pleased to announce a significant milestone in the repositioning of our portfolio with the disposal of the Rustenburg Operations to Sibanye,” said Anglo American CEO Chris Griffiths in Wednesday’s release. “The Rustenburg Operations are quality assets with long-term and sustainable potential under Sibanye’s control, given their proven and successful track record of operating conventional mines in South Africa.”
Platinum producers in South Africa were hit by a five-month long strike last year, and have continued to be pressured by low platinum prices. “With so much uncertainty over PGM (platinum group metal) prices in the near and medium term, the structure of the deal delivering greater value longer term seems the only and most sensible course of action,” commented Investec Securities in a note, as per Reuters.