Manara Minerals, a joint venture between Saudi Arabian Mining Company and the kingdom’s $925 billion Public Investment Fund is looking to invest in key minerals projects in Zambia.
According to Paul Kabuswe, the Southern African country’s mines minister, Manara and Zambia had talks on Wednesday after the signing the previous day of a memorandum of understanding (MoU) with Saudi Arabia to cooperate on exploration for new minerals.
“They (Manara) are interested, but we do not know which ones yet,” Kabuswe told Reuters on Thursday on the sidelines of a mining conference in Riyadh.
“An announcement regarding a potential mining deal between Zambia and Saudi Arabia is expected later this year,” added the minister.
Saudi Arabia is one of several Middle Eastern economies seeking agreements in critical minerals like copper and lithium, aligning with Crown Prince Mohammed Bin Salman’s strategy to diversify the economy and reduce its reliance on oil.
Manara is nearing an agreement to acquire a minority stake in the Zambian copper and nickel assets owned by Canada’s First Quantum Minerals, according to a Reuters report from October.
Reports from First Quantum indicate that the company is evaluating the potential benefits of selling a minority stake in its Zambian assets as one of its key priorities for this year.
Kabuswe stated that while the government is aware of the discussions between Manara and First Quantum, it is not privy to the specifics.
He added that Zambia’s renewed effort to secure up to 30% shareholdings in new mining projects has not deterred investor interest, though reactions from investors have been mixed.
“We no longer want agreements where our share is limited to 10% or 15%,” Kabuswe said, emphasizing that the government is in discussions with Barrick Gold, Ivanhoe Mines, and Chinese investors regarding their plans for new projects.
He also highlighted the potential of a newly established copper trading unit, jointly owned with Swiss-based commodities trader Mercuria, to increase government mining revenues.
Mercuria will trade copper sourced from mines in which the government holds stakes, Kabuswe explained. He noted that Zambia prefers its share of earnings to be calculated in metal output, which the government can sell independently, rather than receiving cash dividends.
The country aims to raise copper production to about 3 million metric tons within the next decade, following a decline in output to approximately 698,000 tons in 2023, down from 763,000 tons the previous year.
