(Bloomberg) — Sweden’s Boliden AB is closing in on a deal to buy Lundin Mining Corp.’s two European mines, according to people familiar with the situation.

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The two companies are in advanced talks over the assets, said the people, who asked not to be identified discussing private information.

Shares of Lundin Mining increased 3.7% in Toronto on Thursday as of 3 pm.

A deal would cement Boliden’s position as one of Europe’s biggest producers of zinc, a metal mainly used in galvanizing steel, guaranteeing long-term mine supply for the company’s smelting operations in Scandinavia.

Spokespeople for Lundin and Boliden declined to comment. Deliberations are ongoing and there’s no certainty a deal will be reached, the people said.

Lundin put the two operations — Zinkgruvan in Sweden and Neves-Corvo in Portugal — up for sale earlier this year as the Vancouver-based company turns its focus to expanding in Latin America. The mines are Lundin’s oldest assets and generated about a fifth of the company’s revenue last year.

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Lundin is looking to raise funds to develop copper projects in South America. The Canadian firm teamed up with BHP Group Ltd. in July to buy Filo Corp., which owns a big copper project that straddles the Argentina-Chile border. BHP will also become a partner in Lundin’s neighboring Josemaria project.

Boliden is in the process of expanding production capacity at its Odda smelter in Norway by 75% to 350,000 tons a year and is restarting production at the Tara operation — Europe’s biggest zinc mine — which had been placed on care and maintenance in part due to high costs.

Lundin’s Zinkgruvan operation, an underground mine southwest of Stockholm that has operated continuously since 1857, produced 76,349 tons of zinc last year, according to the company. Neves-Corvo produced 108,812 tons of zinc and 33,823 tons of copper.

–With assistance from Archie Hunter.

(Adds shares in third paragraph)

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