Zinifex has announced plans to merge with copper miner Oxiana, to create the third largest mining company listed on the Australian Securities Exchange.
Under the deal, Zinifex shareholders would get just over 3.2 Oxiana shares for each Zinifex share.
The new entity will be based in Melbourne, and will have a market value of $11.5 billion.
The companies say they plan to expand the Rosebery Mine in western Tasmania, and extend its life until 2030.
Zinifex CEO Andrew Michelmore says the new company will be better placed to acquire more mines overseas.
"The strength of the base business we can actually now start looking at some of the larger ones offshore that maybe we weren't able to look at because they'd be too much of a bite and probably a stretch of our risk profile," he said.
"The risk profile is much better and it gives us a lot more flexibility and options."
The takeover of Allegiance, also on the West Coast, will proceed unaffected.
Zinifex will seek to call a shareholders meeting in May or June to get approval for the merger.
Source: By Australian Broadcasting Corporation
