Boliden has entered into a definitive agreement with Lundin Mining to acquire the Neves-Corvo mine (pictured) in Portugal and the Zinkgruvan mine in Sweden.
The upfront cash consideration for the entities is $1.3 billion plus contingent payments that can reach up to $150 million, on a cash and debt-free basis. The transaction, that considerably strengthens Boliden’s mine production as well as internal zinc and copper concentrate supply, is subject to customary regulatory approvals.
Mikael Staffas, President and CEO, Boliden, said: “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. Optimising these well-invested units as well as developing the feed mix to our existing smelters will create short- and long-term value for both our business areas. Going forward we will also have greater development opportunities for near mine exploration in these attractive mining regions.”
The Neves-Corvo mine is an underground zinc-copper-lead-silver mine with on-site processing facilities, approximately 200 km southeast of Lisbon, Portugal, in the western part of the Iberian Pyrite Belt. In 2023, the production of metals in concentrate was as follows: 108,812 t of zinc, 33,823 t of copper, 5,600 t of lead and 1.9 Moz of silver.
The Zinkgruvan mine is an underground zinc-copper-lead-silver mine with on-site processing facilities, approximately 200 km southwest of Stockholm, Sweden. In 2023, the production of metals in concentrate was as follows 76,349 t of zinc, 4,434 t of copper, 26,284 t of lead and 2.3 Moz of silver.
Post completion, Boliden will operate seven mining areas and five smelters, mainly focused on the value chains for zinc and copper. Out of the seven mining areas, four are located in Sweden and one each in Finland, Ireland and Portugal. Following the Transaction, including the expansion of Odda and the restart of Tara, Boliden’s concentrate production will increase from 35% to 70% of zinc smelting capacity and 30% to 40% of copper smelting capacity over the coming years.
The transaction will lead to a significant increase in production of metals in concentrate in Business Area Mines, by 95% for zinc and 43% for copper, based on 2023 production figures, Boliden says.
The EBITDA contribution from the Neves-Corvo and Zinkgruvan mines over the next five years is estimated to amount to $300-350 million annually, assuming consensus prices and terms.
Completion of the transaction is expected during mid-2025, subject to regulatory approvals, including merger control filings and approvals and other customary closing conditions.