Saudi Arabia's Manara Minerals is looking for critical minerals projects in Zambia to invest in, the Southern African country's mines minister Paul Kabuswe told Reuters on Thursday.

Manara and Africa's second-largest copper producer held 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," he said on the sidelines of a mining conference in Riyadh, adding that an announcement on a potential mining deal between Zambia and Saudi Arabia is likely this year.

Saudi Arabia is among several Middle East economies pursuing deals in critical minerals, including copper and lithium, as part of de-facto ruler Crown Prince Mohammed Bin Salman's strategy to wean the economy off its dependency on oil.

Manara, a joint venture between Saudi Arabian Mining Company and the kingdom's $925 billion Public Investment Fund, is closing in on a deal to buy a minority stake in the Zambian copper and nickel assets of Canada's First Quantum Minerals, Reuters reported in October.

First Quantum said on Wednesday that it is "assessing the potential benefits of a minority stake sale in Zambia", as one of its priorities this year.

Kabuswe said while aware of the talks between Manara and First Quantum, Zambia's government is not privy to details.

A new push by Zambia's government to negotiate shareholdings as high as 30% in new mining projects has not impacted investor appetite, he said, although investors have had mixed feelings.

"We no longer want those agreements where we have 10% or 15%," he said, adding that the government is also holding talks with Barrick Gold, Ivanhoe Mines and Chinese investors on their plans for new projects.

A newly-established copper trading unit, jointly owned with Swiss-based commodities trader Mercuria, could help boost government mining revenues, the minister said.

Mercuria will trade copper sourced from mines in which the government has shareholdings, Kabuswe said. Zambia prefers that its share of earnings is calculated in metal output which it can sell on its own rather than in a cash dividend, he added.

The country aims to boost copper output to about 3 million metric tons within the decade. Output dropped to about 698 000 tons in 2023, down from 763 000 tons a year earlier.