Canada’s Lundin Mining (TSX: LUN) is selling its Neves-Corvo mine in Portugal and the Zinkgruvan mine in Sweden to Boliden (STO: BOL) for $1.3 billion in upfront cash, with potential contingent payments of up to $150 million.
The deal, the Swedish miner said, will almost double its zinc concentrate output, while increasing production of copper concentrate by 43%.
Lundin Mining president and chief executive officer, Jack Lundin, described the Neves-Corvo and Zinkgruvan mines as pivotal to the company’s evolution into a global multi-asset base metals producer.
By selling these assets, the Lundin family has departed from their ancestral homeland of Sweden and Europe, to focus mainly on growth plans in South America.
Earlier this year, Lundin announced a joint venture with BHP (ASX, NYSE: BHP) to acquire Filo Corp, the owner of the Filo del Sol project in Chile. The copper-gold-silver deposit boasts estimated resources of at least 2.2 billion pounds of copper, 2.86 million ounces of gold, and 133.33 million ounces of silver.
The partners also grabbed the large-scale Josemaría copper-gold-silver project, in the San Juan Province of Argentina, about 9 km east of the border with Chile.
For Boliden, the acquisition of the two mines has a strong “industrial logic and strategic fit” as it will secure supplies for its smelters at a time of intensifying global competition for mined ores.
The company estimates that zinc and copper concentrate production will rise from 35% to 70% of its zinc smelting capacity and from 30% to 40% of its copper smelting capacity. Overall, the transaction is projected to boost zinc production by 95% and copper production by 43%, based on 2023 output figures.
“The addition of two cash flow generative zinc and copper mines in Portugal and Sweden has a strong industrial logic as well as a strategic fit,” Boliden CEO Mikael Staffas said in a separate statement.
The company anticipates that the new assets will contribute $300 million to $350 million in annual earnings over the next five years.
The $1.3 billion upfront payment will be financed through a bridge loan, Boliden said. Half of the amount will be refinanced via a share issue and the remainder through medium and long-term debt.
The Neves-Corvo mine, located about 200 km southeast of Lisbon in the Iberian Pyrite Belt, is an underground operation with on-site processing facilities. In 2023, it produced 108,812 tonnes of zinc, 33,823 tonnes of copper, 6,500 tonnes of lead, and 1.9 million ounces of silver.
Zinkgruvan, situated approximately 200 km southwest of Stockholm, is also an underground mine with on-site processing facilities. Last year, the mine produced 76,349 tonnes of zinc, 4,434 tonnes of copper, 26,284 tonnes of lead, and 2.3 million ounces of silver.
The parties expect to complete the transaction by mid-2025, subject to regulatory approvals.
