Inmet Mining and Lundin Mining will merge to create an international copper producer, Symterra Corporation.
The firms have signed an agreement valued at around C$9bn (US$9.12bn).
With development of Cobre Panama and expansions at Tenke Fungurume, Symterra will have the potential to produce over 500,000t of copper annually by 2017.
Lundin chairman Lukas Lundin said Symterra will provide one of the best growth profiles for copper among major mining companies, combined with attractive exposure to zinc and other metals.
Inmet president and CEO Jochen Tilk said the merger allows the firm to diversify its production base, strengthen earnings and enable the business to grow.