(Bloomberg) — Boliden AB agreed to acquire zinc and copper mines in Portugal and Sweden from Lundin Mining Corp. for as much as $1.52 billion, in a deal that bolsters supplies for its smelters at a time of intensifying global competition for mined ores.

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The acquisition of Neves-Corvo in Portugal and Zinkgruvan in Sweden will almost double Boliden’s zinc concentrates output, while increasing production of copper concentrates by 43%, the Swedish company said Monday in a statement.

Bloomberg reported that Boliden was closing in on a deal to buy the assets last month, as it seeks to secure long-term raw-material supplies for its copper and zinc smelters in Scandinavia. Smelting margins have come under acute strain in recent months, and Boliden said on Monday that buying the mines will deliver an immediate boost to profitability.

“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 Chief Executive Officer Mikael Staffas said in the statement.

Boliden said the upfront cash payment would be financed through a bridge loan. About half of that will be refinanced through a share issue, with the remaining amount taken out via medium and long-term debt financing. The miner expects to complete the transaction by the middle of next year, adding the deal is expected to be immediately earnings accretive.

The assets are in close proximity to Boliden’s existing operations, Citigroup Inc. said in a research note. “That should make the transaction a good strategic fit, and at the same time straightening its backward integration for the smelting business,” the bank said.

Lundin put its Zinkgruvan and Neves-Corvo mines on sale earlier this year as the Vancouver-based company turns its focus to Latin America. The mines are Lundin’s oldest assets and generated about 19% of the company’s revenue last year.

Lundin said it will receive an upfront cash consideration of $1.37 billion upon closing, as well as up to $150 million if certain conditions of the deal are satisfied. The company will use the proceeds from the deal to strengthen its balance sheet and support growth plans in the Vicuna District, an emerging copper and gold area in Argentina and Chile.

Boliden’s shares saw volatile trading as markets opened on Monday, initially opening 3.1% higher before swinging to a loss of as much as 1.7%. The shares were up 1% lower at 330.7 kronor at 09:40 a.m. in Stockholm.

–With assistance from Mark Burton.

(Updates with analyst comment in sixth paragraph, shares in final paragraph.)

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