Saudi Industrial Group Tasnee plans to build an integrated smelter for copper, lead and zinc in the kingdom as it looks to diversify away from petrochemicals, a company executive said.

The plant's construction in the Red Sea port of Yanbu would depend on finding the right international technical and financial partners, Ian V Hesford, business development consultant for mining and metallurgy at Tasnee said in an interview in Jeddah.

'We have completed our pre-feasibility studies ... but it is at the stage where we will be looking for partners,' Hesford said.

Hesford said the smelting operation would have a capacity of 100,000 tonnes per year of each material, with plans to expand copper to 200,000 tonnes. Lead and zinc capacity growth would depend on market conditions, but he said the plant would be designed to be easily expanded.

A joint venture between Tasnee and Saudi-based Nabaa Industrial Development and Investment Co that will develop the project has yet to be finalised, he added.

Tasnee and Nabaa are looking to form a project development firm to promote metals, minerals, petrochemicals, power and water projects, Hesford said.

Tasnee has a 10 percent stake in Al Masane al Kobra Mining (Amak) which is developing an underground mine with ore reserves estimated at aabout 9 million tonnes containing zinc, copper, gold and silver.

Amak will provide the raw material for the proposed smelter, Amak's general manager, Zeyad al-Tawil told Reuters.

'When you say Tasnee you say Jubail - petrochemicals. It wants to be a diversified company known for all of these products not just petrochemicals,' he said.

Tasnee's unit Cristal, which took over Australian mineral sands producer Bemax Resources Ltd, is the world's second biggest producer of titanium dioxide pigments, Hesford said.

Saudi mining sector

Most of Saudi Arabia's oil is located in the Eastern coast, while minerals are in the Arabian shield, on the western coast.

Exploration in minerals in Saudi Arabia is still in the early stages, Hesford said.

'If you are to explore for minerals properly (in Saudi Arabia) it takes a lot of time and a lot of money so it needs a concerted effort by the government, by private companies. It's just not easy and therefore it's slow,' he added.

The Arabian shield's exploration is a fraction of what it should be, he said.

'It is not happening more quickly because of oil, oil is here, it's black gold, it's easier, but mining is a function of exploration and exploration and is expensive,' Hesford said.

Hesford said Saudi Arabia has plenty of mineralisation but lacks economically viable large mines.

'Saudi Arabia has a lot of gold mines but it does not have high grade gold mines ... It has got a lot of copper and zinc but does not have big deposits. This is one of the problems that we face.' – Reuters