Lundin weighing Portugal Copper Mine With $1 Billion

Bloomberg is weighing the sale of a copper and zinc mine in Portugal that could be valued at around 1 billion euros $1 billion, according to people familiar with the matter.

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

A sale is likely to draw interest from rival mining firms, according to the people. They said that Lundin may decide to retain the asset, because the deliberations are ongoing. A representative for Lundin didn't want to say anything.

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. The zinc plant is undergoing expansion to be able to reach a similar capacity.

There is a shift from fossil fuels to clean energy and demand for materials that can contribute to emissions-free power and electric transport. BHP Group Ltd., the world's top miner, is one of those on the hunt for copper and nickel assets that are vital to this transition.

The company has a market value of C $5.7 billion $4.5 billion and Lundin is traded in Stockholm over the last 12 months, despite the fact that the shares in Lundin have fallen about a third in Toronto. 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 such as Newmont Corp. and First Quantum Minerals Ltd., underscored a turnaround in fortunes for mining companies. Margins that were inflated by surging commodities have been 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.