By Zandi Shabalala
JOHANNESBURG (Reuters) - Anglo American Platinum (Amplats) (J:AMSJ) sold the labour-intensive South African Rustenburg mine that produces about a third of its annual output for 4.5 billion rand ($331 million) to bullion producer Sibanye Gold (J:SGLJ).
Amplats, a unit of global mining group Anglo American (L:AAL), is pivoting its strategy on newer and more mechanised mines and removing unprofitable ounces following a record five-month strike last year.
Amplats has been weighing either a sale or a flotation of Rustenburg, the world's top platinum mine with an annual production of over 800,000 ounces.
Initial market reaction was positive. Shares in Amplats, jumped 3.8 percent while Sibanye's stock rose 5.5 percent.
"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," Investec Securities said in a note.
Others analysts were less sanguine.
"We think Sibanye is buying a troubled asset," Johann Steyn from Citi said in a note to investors.
Platinum producers have been suffering from persistent weakness in prices
Rustenburg employs about 16,000 workers in three shafts and supporting infrastructure, which include concentrating plants and a chrome recovery plant.
Even after the sale, Amplats retains its spot as the world's top producer of the metal followed by Impala Platinum (J:IMPJ).
Amplats retains eight mines some of which are mechanised, including Mogalakwena which will now be its crown jewel and most productive mine. Magalakwena, unaffected by last year's labour stoppage, produced 370,000 ounces in 2014.
PAYMENT PLAN
Sibanye, which operates four mature gold mines, will pay 1.5 billion rand upfront in shares or cash and 35 percent of Rustenburg's free cash flows over the next six years with a minimum payment of 3 billion rand.
Amplats Chief Executive Chris Griffith said the firm was likely to sell its Union platinum mine as it was not large enough to list separately. One option had been to list Union and Rustenburg together.
Sibanye Chief Executive Neal Froneman said Sibanye hopes to turn around the Rustenburg assets as it did with ageing mines it inherited from Gold Fields (J:GFIJ).
Froneman said jobs at Rustenburg were secure for now.
"I think jobs are safe as long as we acknowledge that the current market conditions don't get worse," he said.
Sibanye would spend between 1.2 billion and 1.4 billion per year over the next few years on the assets while aiming to shave 10 percent from costs in the next two years.
The mining minister's advisor Mahlodi Muofhe told Reuters the approval of the sale would depend on whether the deal meets mining charter requirements, which include a 26 percent black empowerment clause.
Sibanye's black economic empowerment partners owns 26 percent of Rustenburg assets, the company confirmed in a statement.