Lundin Mining to buy Canada’s Rio Narcea

Sweden's Lundin Mining Corp is set to acquire Toronto-based Rio Narcea Gold Mines Ltd in a deal valued at 5.7 billion kronor ($800 million), reported the online edition of Globe and Mail.

Shares in Lundin Mining were suspended in Stockholm at 11.30 am today.

Rio Narcea’s main asset is the Aguablanca nickel mine in Spain, which produced over 1.3 million tonnes of nickel last year.

To date, Lundin mainly mines zinc, lead and silver and owns the Neves-Corvo mine in Portugal.

“That is the real rationale. They’ve both got mines nearby and could find some operational synergies,” said Larry Smith, an analyst with Blackmont Capital, reported Globe and Mail.

Lundin is expected to sell Rio Narcea’s gold assets, which include operations in Spain and West Africa, for a “few hundred million dollars” according to sources, the paper said.

The two sides had hoped to announce the deal yesterday, but were still putting finishing touches on the agreement last night.

Nickel prices jumped $2,950 or 6.5 pcrcent to $48,550 a tonne on the London Metal Exchange yesterday.