South Africa’s Sappi Limited said Monday it will buy Potlatch Corp.’s coated fine paper business and its pulp and paper mill in Cloquet, Minn., for $480 million in cash.

Potlatch, based in Spokane, Wash., said it will shut down its coated paper mill in Brainerd, Minn., where it employs about 660 workers. The mill will be closed in about 60 days, and production will be shifted to Sappi’s other facilities.

Mike Sullivan, spokesman for Potlatch, said the sale was precipitated by the foreign competition and industry consolidation in the last few years.

The deal, subject to regulatory approval, will increase Sappi’s leading share of coated fine paper sales in the United States to 30 percent, the company said.

Coated fine paper is used in annual reports, corporate image brochures, art reproductions and high-end advertising.

Eugene van As, chairman of Johannesburg-based Sappi, said the transfer of the Potlatch business to Sappi’s existing mills in North America and Europe will strengthen the competitiveness and profitability of its North American operations.

“We believe that the Cloquet pulp mill and coated paper assets have the potential to generate world-class returns,” van As said. “The acquired assets are well-invested with a book value well in excess of transaction value.”

Sullivan said it was unclear what the Brainerd closing will mean to the Cloquet plant, which employs 1,000 people.