Lundin Mining : 2021 Q2 MD&A and Financial Statements m

Management's Discussion and Analysis

For the three and six months ended June 30, 2021

This management's discussion and analysis ("MD&A") has been prepared as of July 28, 2021 and should be read in conjunction with the Company's condensed interim consolidated financial statements for the three and six months ended June 30, 2021. Those financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. The Company's presentation currency is United States ("US") dollars. Reference herein of $ or USD is to United States dollars, C$ is to Canadian dollars, CLP is to Chilean pesos, BRL is to Brazilian reais, € refers to euros, and SEK is to Swedish kronor.

About Lundin Mining

Lundin Mining Corporation ("Lundin Mining" or the "Company") is a diversified Canadian base metals mining company with operations in Brazil, Chile, Portugal, Sweden, and the United States of America, primarily producing copper, zinc, gold and nickel.

Table of Contents
Highlights ....................................................................................................................................	1
Financial Position........................................................................................................................	3
Outlook .......................................................................................................................................	4
Selected Quarterly Financial Information...................................................................................	6
Revenue Overview......................................................................................................................	7
Financial Results .........................................................................................................................	11
Mining Operations ......................................................................................................................	13
Production Overview .............................................................................................................	13
Cash Cost Overview ...............................................................................................................	14
Capital Expenditures ..............................................................................................................	15
Candelaria ..............................................................................................................................	16
Chapada .................................................................................................................................	17
Eagle.......................................................................................................................................	18
Neves-Corvo...........................................................................................................................	19
Zinkgruvan .............................................................................................................................	21
Metal Prices, LME Inventories and Smelter Treatment and Refining Charges ..........................	22
Liquidity and Financial Condition ...............................................................................................	23
Related Party Transactions .........................................................................................................	24
Changes in Accounting Policies and Critical Accounting Estimates and Judgments ..................	24
Non-GAAP Performance Measures ............................................................................................	25
Managing Risks ...........................................................................................................................	31
Management's Report on Internal Controls...............................................................................	31
Outstanding Share Data..............................................................................................................	31

Cautionary Statement on Forward-Looking Information

Certain of the statements made and information contained herein is "forward-looking information" within the meaning of applicable Canadian securities laws. All statements other than statements of historical facts included in this document constitute forward-looking information, including but not limited to statements regarding the Company's plans, prospects and business strategies; the Company's guidance on the timing and amount of future production and its expectations regarding the results of operations; expected costs; permitting requirements and timelines; timing and possible outcome of pending litigation; the results of any Preliminary Economic Assessment, Feasibility Study, or Mineral Resource and Mineral Reserve estimations, life of mine estimates, and mine and mine closure plans; anticipated market prices of metals, currency exchange rates, and interest rates; the development and implementation of the Company's Responsible Mining Management System; the Company's ability to comply with contractual and permitting or other regulatory requirements; anticipated exploration and development activities at the Company's projects; and the Company's integration of acquisitions and any anticipated benefits thereof. Words such as "believe", "expect", "anticipate", "contemplate", "target", "plan", "goal", "aim", "intend", "continue", "budget", "estimate", "may", "will", "can", "could", "should", "schedule" and similar expressions identify forward-looking statements.

Forward-looking information is necessarily based upon various estimates and assumptions including, without limitation, the expectations and beliefs of management, including that the Company can access financing, appropriate equipment and sufficient labor; assumed and future price of copper, nickel, zinc, gold and other metals; anticipated costs; ability to achieve goals; the prompt and effective integration of acquisitions; that the political environment in which the Company operates will continue to support the development and operation of mining projects; and assumptions related to the factors set forth below. While these factors and assumptions are considered reasonable by Lundin Mining as at the date of this document in light of management's experience and perception of current conditions and expected developments, these statements are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements and undue reliance should not be placed on such statements and information. Such factors include, but are not limited to: risks inherent in mining including but not limited to risks to the environment, industrial accidents, catastrophic equipment failures, unusual or unexpected geological formations or unstable ground conditions, and natural phenomena such as earthquakes, flooding or unusually severe weather; uninsurable risks; global financial conditions and inflation; changes in the Company's share price, and volatility in the equity markets in general; volatility and fluctuations in metal and commodity prices; the threat associated with outbreaks of viruses and infectious diseases, including the COVID-19 virus; changing taxation regimes; reliance on a single asset; delays or the inability to obtain, retain or comply with permits; risks related to negative publicity with respect to the Company or the mining industry in general; health and safety risks; exploration, development or mining results not being consistent with the Company's expectations; unavailable or inaccessible infrastructure and risks related to ageing infrastructure; actual ore mined and/or metal recoveries varying from Mineral Resource and Mineral Reserve estimates, estimates of grade, tonnage, dilution, mine plans and metallurgical and other characteristics; risks associated with the estimation of Mineral Resources and Mineral Reserves and the geology, grade and continuity of mineral deposits including but not limited to models relating thereto; ore processing efficiency; community and stakeholder opposition; information technology and cybersecurity risks; potential for the allegation of fraud and corruption involving the Company, its customers, suppliers or employees, or the allegation of improper or discriminatory employment practices, or human rights violations; regulatory investigations, enforcement, sanctions and/or related or other litigation; uncertain political and economic environments, including in Brazil and Chile; risks associated with the structural stability of waste rock dumps or tailings storage facilities; estimates of future production and operations; estimates of operating, cash and all-in sustaining cost estimates; civil disruption in Chile; the potential for and effects of labor disputes or other unanticipated difficulties with or shortages of labor or interruptions in production; risks related to the environmental regulation and environmental impact of the Company's operations and products and management thereof; exchange rate fluctuations; reliance on third parties and consultants in foreign jurisdictions; climate change; risks relating to attracting and retaining of highly skilled employees; compliance with environmental, health and safety laws; counterparty and credit risks and customer concentration; litigation; risks inherent in and/or associated with operating in foreign countries and emerging markets; risks related to mine closure activities and closed and historical sites; changes in laws, regulations or policies including but not limited to those related to mining regimes, permitting and approvals, environmental and tailings management, labor, trade relations, and transportation; internal controls; challenges or defects in title; the estimation of asset carrying values; historical environmental liabilities and ongoing reclamation obligations; the price and availability of key operating supplies or services; competition; indebtedness; compliance with foreign laws; existence of significant shareholders; liquidity risks and limited financial resources; funding requirements and availability of financing; enforcing legal rights in foreign jurisdictions; dilution; risks relating to dividends; risks associated with acquisitions and related integration efforts, including the ability to achieve anticipated benefits, unanticipated difficulties or expenditures relating to integration and diversion of management time on integration; activist shareholders and proxy solicitation matters; and other risks and uncertainties, including but not limited to those described in the "Risk and Uncertainties" section of the Annual Information Form and the "Managing Risks" section of the Company's MD&A for the year ended December 31, 2020, which are available on SEDAR at www.sedar.com under the Company's profile. All of the forward-looking statements made in this document are qualified by these cautionary statements. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, forecast or intended and readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward- looking information. Accordingly, there can be no assurance that forward-looking information will prove to be accurate and forward-looking information is not a guarantee of future performance. Readers are advised not to place undue reliance on forward-looking information. The forward-looking information contained herein speaks only as of the date of this document. The Company disclaims any intention or obligation to update or revise forward‐looking information or to explain any material difference between such and subsequent actual events, except as required by applicable law.

Highlights

Operational Performance

Operations performed well during the quarter with production generally in line with expectations, however, Neves-Corvo zinc grades were lower than planned.

Candelaria (80% owned): Candelaria produced 36,014 tonnes of copper, and approximately 24,000 ounces of gold in concentrate on a 100% basis in the quarter. Copper and gold production was higher than the prior year quarter mostly due to higher mill throughput. Copper cash costs1 of $1.52/lb for the current quarter were higher than the prior year quarter largely owing to the impact of higher mining costs.

Chapada (100% owned): Chapada produced 11,258 tonnes of copper and approximately 17,000 ounces of gold in concentrate in the quarter. Copper and gold production increased compared to the previous quarter and expectations, though were lower than the prior year quarter primarily due to planned lower grades. Chapada set a monthly mill throughput record in May. Copper cash costs of $1.32/lb for the quarter were higher than the prior year quarter due mainly to higher mining costs and lower sales volumes. Gross operating costs were in line with expectations.

Eagle (100% owned): Eagle produced 4,774 tonnes of nickel and 5,227 tonnes of copper during the quarter, which was above plan. Nickel and copper production were higher than the prior year quarter as higher than planned ore tonnes continue to be mined in the higher-grade Eagle East orebody. By-product credits, aided by rising copper prices, exceeded gross cash costs in the quarter resulting in nickel cash costs of negative $2.01/lb.

Neves-Corvo(100% owned): Neves-Corvo produced 10,317 tonnes of copper for the quarter, ahead of plan, and 16,662 tonnes of zinc. Copper production increased over the previous quarter and was comparable to the prior year quarter as lower mill throughput was partially offset by higher grades. Zinc production was lower than the prior year due to lower grades. Copper cash costs of $1.65/lb for the quarter were lower than the prior year quarter and better than plan primarily due to favourable by-product metal prices.

The Zinc Expansion Project ("ZEP") continues to progress on schedule and on budget.

Zinkgruvan (100% owned): Zinc production of 18,171 tonnes was higher than the prior year quarter and plan due to higher grades and throughput. Lead production of 5,095 tonnes was higher than the prior year quarter due to higher grades and recoveries. Zinc cash costs of $0.42/lb were better than plan and the prior year quarter largely due to higher sales volumes.

Total production

(Contained metal in	YTD	2021				2020
concentrate)	Q2	Q1	Total	Q4	Q3	Q2	Q1
Copper (t)a	120,811	63,457	57,354	230,781	41,885	61,444	65,285	62,167
Zinc (t)	68,198	34,833	33,365	142,744	41,428	32,787	31,582	36,947
Gold (koz)a	75	41	34	163	35	45	44	39
Nickel (t)	10,128	4,774	5,354	16,718	4,909	4,854	3,380	3,575

a - Candelaria's production is on a 100% basis.

1 This is a non-GAAP measure - see page 25 of this MD&A for discussion of non-GAAP measures.

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Financial Performance

• Gross profit for the quarter ended June 30, 2021 was $380.2 million, an increase of $238.1 million compared to the prior year quarter. On a year-to-date basis, gross profit was $632.6 million, an increase of $513.2 million over the prior year comparative period. The increase was primarily due to higher realized metal prices and price adjustments (Q2 - $298.1 million, YTD - $640.5 million), partially offset by higher operating costs at Candelaria and Chapada and the unfavourable effects of foreign exchange (Q2 - $18.9 million, YTD - $25.7 million). Total production costs were in line with expectations.
• Net earnings for the quarter ended June 30, 2021 were $268.4 million, an increase of $220.2 million compared to the prior year quarter. On a year-to-date basis, net earnings were $422.7 million, an increase of $488.0 million from the prior year comparative period. The increases were attributable to higher gross profit partially offset by higher income tax expense.
• Adjusted earnings1 for the quarter were $226.3 million, an increase of $173.5 million over the prior year quarter. On a year-to-date basis, adjusted earnings were $370.7 million, $358.9 million higher than the prior year. The increases were primarily due to higher gross profit partially offset by higher income taxes and higher net earnings attributable to non-controlling interests.

Corporate Updates

• The Company continues to manage and respond to the COVID-19 pandemic and continues to implement preventative measures to ensure the safety of its workforce, local communities and other key stakeholders. The operational impact of second and third wave outbreaks is being closely monitored, especially in Brazil and Chile. Cases in Brazil and Chile have risen since the start of the year and remained high at the end of the quarter. To date, production disruptions as a result of COVID-19 have been minimal and there has been no significant disruption in the delivery or receipt of goods at our operations.
• On July 6, 2021, the Company published its annual Sustainability Report which provides updates on the economic, safety, environmental and social issues that are of greatest interest to communities near the Company's operations, employees, investors, and other stakeholders. A copy of the Sustainability Report is available on the Company's website (www.lundinmining.com).
• On July 27, 2021, the Company announced that its 24% owned subsidiary, Koboltti Chemicals Holding Limited, had entered into an agreement to sell its specialty cobalt business ("Freeport Cobalt") to Jervois Mining Limited ("Jervois") for $85.0 million, in cash and Jervois shares, plus working capital to be determined at closing with the right to receive up to $40.0 million in contingent cash consideration based on the future performance of the business. Assuming a full allotment of shares of up to 9.9% of Jervois shares and excluding contingent consideration, the Company estimates its net share of the proceeds would be $42.0 million in cash plus its pro-rata 24% share of up to 9.9% of Jervois shares. The transaction is expected to close in the third quarter of 2021.

1 This is a non-GAAP measure - see page 25 of this MD&A for discussion of non-GAAP measures.

2

Financial Position and Financing

• Cash and cash equivalents of $294.9 million as at June 30, 2021 represents an increase of $113.6 million during the quarter. Cash flow from operations of $419.0 million was used to invest in capital expenditures ($131.9 million), pay shareholder dividends ($71.2 million) and repurchase shares of $28.4 million. The Company also repaid approximately $53.2 million in debt including the remaining $45.0 million balance owing on its revolving credit facility.
  On a year-to-date basis, cash and cash equivalents increased by $153.5 million. Cash flow from operations of $577.7 million was used to invest in capital expenditure of $244.4 million, to repay debt ($81.0 million), pay shareholder dividends ($71.2 million) and fund share repurchases ($28.4 million).
• Free cash flow1 for the three and the six months ended June 30, 2021 has increased (Q2 - $346.7 million, YTD - $429.0 million) over the prior year comparative periods due to higher cash provided by operating activities.
• As at June 30, 2021, the Company had a net cash1 balance of $153.4 million. As at July 28, 2021, the Company had a cash and net cash balance of approximately $250.0 million and $190.0 million, respectively. Subsequent to the end of the quarter, $80.0 million of Candelaria's term loan was repaid.

1 This is a non-GAAP measure - see page 25 of this MD&A for discussion of non-GAAP measures.

3