Lundin weighs sale of $1 billion copper-zinc mine in Portugal

Neves-Corvo is a mainly copper and zinc mine producing copper, zinc and lead concentrates. (Image courtesy of Lundin Mining.)

Lundin Mining Corp. is weighing the sale of a copper and zinc mine in Portugal that could be valued at about 1 billion euros ($1 billion), people familiar with the matter said.

The Toronto-based company is speaking with potential advisers as it explores options for the Neves-Corvo mine in southern Portugal, the people said, asking not to be identified discussing confidential information.

A sale is likely to draw interest from rival mining firms, according to the people. Deliberations are ongoing and Lundin may also decide to retain the asset, they said. A representative for Lundin declined to comment.

The facility at Neves-Corvo has the capacity to process roughly 2.6 million metric tons of copper each year, according to Lundin’s website. Its zinc plant is undergoing expansion to be able to reach a similar capacity.

A global shift from fossil fuels to clean energy is creating demand for materials that can help deliver emissions-free power and electric transport. The world’s top miner, BHP Group Ltd., is among those on the hunt for copper and nickel assets that are vital to this transition.

Shares in Lundin have fallen about a third in Toronto over the last 12 months, giving the company a market value of C$5.7 billion ($4.5 billion). Lundin is also traded in Stockholm. In July, the company raised its spending budget and forecast higher costs after reporting a surprise quarterly loss.

The results, along with those of peers including Newmont Corp. and First Quantum Minerals Ltd., underscored a sharp turnaround in fortunes for mining companies. Margins that were inflated by surging commodities have become squeezed as a slump in metal prices collides with rampant inflation and lingering operational challenges.

Lundin’s founder, the Swedish-Canadian billionaire Lukas Henrik Lundin, died in July. He started the company with his father in the mid-1990s and was a board member and chairman for more than 25 years until he stepped down in May.

(By Dinesh Nair, with assistance from Charles Daly)

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