UPDATE 2-Canada miner Lundin doubles down on copper with Chilean buy

Mon Oct 6, 2014 6:58pm EDT
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(Recasts with analyst comment; context)

By Nicole Mordant

Oct 6 (Reuters) - Canada's Lundin Mining Corp will buy Freeport-McMoRan Inc's 80 percent stake in the Candelaria copper mining operation in Chile for at least $1.8 billion, more than doubling its copper output.

A potential sale had been rumored in the media for some time, but tax issues were said to have held up the deal.

"They were looking for a big project and they wanted to get more copper," said Kerry Smith, an analyst at Haywood Securities in Toronto.

With the mine already in production, there was "a lot less risk to it," he said.

The transaction is one of the biggest deals for a mining asset since Glencore Plc sold its Las Bambas copper asset in Peru to China's MMG Ltd for $7 billion in a deal that closed in July.

Mining mergers and acquisitions have slowed to a crawl in the past year amid with a downturn in metals prices.

The transaction comes at a time when copper prices have fallen by a third since early 2011. The metal is currently one of the more divisive commodities among analysts, with opinions split over whether it will rally or lose ground during the rest of 2014.   Continued...