The designated capacity at the complex will be 400,000 tonnes per year of copper, 200,000 tpy of zinc and 55,000 tpy of lead, the source said.

The $2.8 billion project in Ras Al-Khair Mineral City, named SmeltCo, will be jointly developed and equally owned by Trafigura and Modern Mining Holding - an affiliate of the Riyadh-based Modern Industrial Investment Holding Group.

Its copper production capacity will be similar to some of the world’s major copper smelters, including Sterlite Copper’s Tuticorin 400,000 tpy smelter in India that has been cleared to resume production, and Chinalco’s Ningde 400,000 tpy project due to commence output in August.

No timetable has been disclosed on the commencement of the project.

Trafigura declined to comment when approached by Fastmarkets.

The project was first announced in October, attracting wide market attention to Saudi Arabia’s ambition to produce base metals. Saudi Arabia is home to major copper mining assets, including Jabal Sayid mine co-owned by Barrick and Ma’aden.

The construction of the new copper smelter could mean a higher demand for copper concentrates when it begins operations. Market participants have already been anticipating tighter copper concentrate supply in 2020.

In mid-January, Fastmarkets’ copper concentrate TC/RC index dropped to $82.3 per tonne / 8.23 cents per lb, its third consecutive decline after the market began to price second-quarter tonnages at lower levels because of anticipated concentrate tightness.