Nexa Confirms Boliden Talks, Deal Could Reshape Zinc Supply

Nexa Resources confirmed it is aware of ongoing negotiations between Boliden and its controlling shareholder Votorantim regarding a potential acquisition. The confirmation came in a brief statement from the zinc and copper miner, which said no agreement has been reached and no certainty exists that a transaction will materialize.

The talks, first reported by Brazilian media, would combine two of the world's larger zinc producers. Boliden, the Swedish mining and smelting group, has been looking to expand its base metals exposure beyond its Nordic and Irish operations. Nexa operates mines and smelters in Peru and Brazil, with a heavy reliance on zinc but also meaningful copper and lead output.

A deal would give Boliden access to Nexa's Cerro Lindo mine in Peru, one of the larger polymetallic operations in South America, and its smelting complex in Cajamarquilla, Brazil. For Votorantim, the Brazilian industrial conglomerate that owns roughly 52% of Nexa, an exit would come after years of weak zinc prices that have weighed on the miner's valuation. Nexa shares trade at a discount to book value, a function of both commodity-cycle timing and the company's debt load.

The structure of any deal remains unclear. Boliden could buy Votorantim's controlling stake directly, which would trigger a mandatory tender offer for the remaining shares under Brazilian securities law. Alternatively, a full merger of the two companies would require approval from both sets of shareholders and antitrust clearance in multiple jurisdictions.

Zinc supply dynamics add urgency. Global zinc mine output has been constrained by closures at major operations including Century in Australia and the Lisheen mine in Ireland. Nexa's own output fell 8% last year on lower grades at Cerro Lindo. A combined Boliden-Nexa would control roughly 5% of global mined zinc, enough to shift pricing power in concentrate negotiations with Chinese smelters.

Nexa shares rose 12% on the confirmation, recovering some of the ground lost over the past year as zinc prices slid toward $2,500 a ton. The stock still trades below its 2021 peak, reflecting the market's skepticism that a deal will close at a premium large enough to satisfy Votorantim's valuation expectations.

Boliden declined to comment. Votorantim did not respond to requests for comment. Nexa said it would update the market if and when a definitive agreement is reached.