| Written by P.Shinebayar | |
| Tuesday, January 25, 2011. |
Mongolia plans to commence uranium exploration by the year of 2012, said Prime Minister Batbold Sukhbaatar on January 21. He made a report on the implementation of nuclear energy law of Mongolia, at the parliament session.
“Uranium will be the biggest ambitious mining project in Mongolia after Oyu-Tolgoi and Tavan Tolgoi projects” he emphasized. “Mongolia has nearly one million tons in reasonably assured reserve of uranium and we need to speed up the production” he added.
At present, reserves of Mardai deposit in eastern province of Dornod and Kharaat in central gobi province of Dundgobi have been established and the feasibility study for the two deposits are underway.
“The exploration will start by 2012, which means Mongolia will begin selling uranium beginning from 2013 or 2014.” Batbold told. “With respect to nuclear energy production, we are taking step-by-step measures as there is a lot of to do in this direction” he said.
According to premier, a total of 107 prospecting licenses were issued to seventeen business entities, which are doing their respective prospecting works pursuant to the Nuclear Energy Law of Mongolia, under strict control of the Government.
After the report by Prime Minister Batbold, some MPs expressed their opinions and positions regarding the report. For instance, they suggested about making the projected fifth power plant a nuclear power plant. They criticized the Government and related agencies for inactiveness and slowness.
The mining sector is Mongolia’s single largest industry, accounting for 55 percent of industrial output and more than 40 percent of export earnings. Coal provides 80 percent of its electricity (3 billion kWh in 2009), from less than 1 GWe capacity, and 13 percent of electricity is imported from Russia. Air pollution is a major problem in Ulaanbaatar City, from domestic combustion, cars, and power generation.
Mongolia has a long history of uranium exploration commencing with joint Russian and Mongolian endeavors from 1950s involving investment of some US$ 200 million. Initial success was obtained in the Saddle Hills area of northeastern Mongolia (Dornod and Gurvanbulag regions) where uranium is present in volcanogenic sediments.
The main uranium prospect is the Dornod open cut mine and underground ore body, with the surrounding area containing a number of deposits in the Dornod Province in the far northeast of the country.
ARMZ says that Russia spent the equivalent of US$600 million (in 2009 dollars) on uranium exploration and development in Mongolia to 1995.
In February 2009 the government set up MonAtom LLC to undertake uranium exploration and mining on behalf of the state, as well as pursuing nuclear energy proposals. It will hold the state's equity in uranium and nuclear ventures and so comes under the Nuclear Energy Agency, a policy and regulatory body and government line agency and the State Property Committee.
In July 2009, the Parliament passed a Nuclear Energy Law to regulate the exploration, development, and mining of uranium and give the state a greater degree of ownership and control of uranium resources. It included transitional provisions dealing with existing mining and exploration licences. The new Law gives the government the right to take ownership without payment of not less than 51 percent of the shares of a project or joint venture if the uranium mineralization was discovered by state funded exploration, and not less than 34 percent if state funding was not used to find the mineralization.
During the visit of the Mongolian Prime Minister to Russia in mid 2009, an agreement was signed between the Mongolian Nuclear Energy Agency and Russia's Rosatom corporation. This agreement envisaged creation of a joint venture company between MonAtom and ARMZ to develop two uranium projects in Mongolia. The final intergovernmental agreement to set up the Dornod Uranium LLC joint venture was signed on 25 August 2009 and ratified by the Russian Duma in 2010.
Meanwhile, Canada-based Khan Resources Inc. (KRI) had a 69 percent share in the Dornod project, mostly through a 58 percent subsidiary Central Asian Uranium Co. Ltd (CAUC), a Mongolian stock company set up by World Wide Minerals at the behest of the government in late 1990s. In February 2010 Khan recommended that its shareholders accept a full takeover by a Chinese government entity, Monatom and NEA proceeded to exclude Khan from any role with Dornod. This remains subject to legal appeals.
In January 2011 Khan announced it was suing the Mongolian government "for its expropriatory and unlawful treatment of Khan in relation to the Dornod uranium deposit" and sought over US$200 million in compensation for losses and damages. See also Appendix.
East Asia Minerals Corporation holds a number of exploration licences in different parts of the country.
In September 2009 India signed a uranium supply and nuclear cooperation agreement with Mongolia. Russia is examining the feasibility of building nuclear power plants in Mongolia.
The Nuclear Energy Agency has tentative plans for developing nuclear power, using either Korean Smart reactors or Toshiba 4S types, from 2021. Three sites under consideration are Ulaanbaatar, western Mongolia and Dornod province.
Mongolia joined the IAEA in 1993, though it has applied safeguards under the NPT since 1972. A law on nuclear weapons-free status was passed in 2000. The Additional Protocol to its safeguards agreement with IAEA has been in force since May 2003.
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