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Kazakhstan and Mongolia are expanding their cooperation in the mining sector. The two countries on 30 March signed a Memorandum of Understanding focusing on geology and development of mineral resources and civil aviation during the 7th meeting of the Intergovernmental Commission between Mongolia and Kazakhstan on Trade, Economic, Scientific and Technical Cooperation in Almaty. The intergovernmental meeting also aims to strengthen political relations to broaden economic cooperation. The two countries previously had discussed cooperating on nuclear power in February 2017. Kazakhstan has extensive experience exploring and processing sensitive minerals, which Mongolia can apply to its own efforts.
The intergovernmental commission plans to discuss issues to intensify cooperation in all spheres including trade, economy and society. This builds upon the 5th and 6th Mongolian-Kazakh intergovernmental meetings which addressed “establishing a joint investment fund and concluding an agreement on Kazakh wheat exports” and “bilateral cooperation on investment, agriculture, transport, mining,” respectively.
The government is putting more emphasis on uranium mining for economic development and investment. And Mongolia’s partners are watching. Mongolia has proven reserves of 170,000 tonnes of uranium, according to 2013 reporting.
Mongolia considers uranium deposits strategic guaranteeing the government a share of 50% or more in each deposit.
Mongolia has not experienced large-scale uranium exploration comparable to 1950s exploration by the Soviets, according to the World Nuclear Association.
Nuclear energy is part of Mongolia’s sustainable development strategy and was part of the Action Plan of Government for 2008-2012. Mongolia is pursuing nuclear energy to use and process its own minerals, to improve its national infrastructure including the electrification of a 7536-kilometer railway, reduce pollution, and reduce the dependence on petroleum for electricity generation. The country’s current electricity system runs on coal and contributes to pollution. Those living in Ulaanbaatar use coal to heat their homes as they not connected to the electricity grid. To further resolve pollution issues, Mongolia needs to address the lack of affordable housing in its capital, resettle residents who live in ger districts (tent settlements) into apartments, and connect gers to the electrical grid.
Mongolia also uses uranium for nuclear medicine and to ensure human health which was identified as a priority in the IAEA Country Program Framework. Many Mongolians who live in the countryside struggle to receive and access treatment. Mongolia participates in the PACT – “Programme of Action for Cancer Therapy” supported by the IAEA to fill the gap of radiation therapy.
Foreign use of uranium is driving Mongolia’s uranium mining industry and Mongolia views government-to-government interactions to be crucial in developing Mongolia’s diplomatic and economic relations and improving FDI with foreign companies. Foreign governments need additional uranium to meet their energy needs and watchdogs monitor uranium activity. Mongolia’s business partnerships have expanded because of these interactions. The European Union worked with Mongolia on a regulatory framework for uranium mining and milling operations in January 2017. The project aimed to promote regulatory standards in accordance with EU and international standards. Regulations for waste management, radiation, and rehabilitation were developed. The Czech Republic’s Uranium Industry LLC and MonAtom formed the Mon CzechUranium in June 2015. In 2015, Uranium Industry bought the Gurvan Saihan Joint Venture (GSJV) from Canadian Denison Mines for approximately $20 million dollars for its 85 percent interest in the GSJV.
French New Areva Group, according to their Mongolian site “transforms nuclear materials so that they can be used to support the development of society,” foremost in energy. The company, in Mongolia since 1996, “first discovered in 2011 the Dulaan Uul uranium deposit with 6,260 tons of resources, and then the Zuuvch Ovoo deposit with an estimated 54,640 tons of resources.” COGEGOBI LLC, the Areva subsidiary, was in charge of these discoveries, and tasked to identify uranium for exploration in according with the Law on Mineral Resources and Law on Nuclear Energy. COGEGOBI LLC met resistance from Fire Nation, a group in Mongolia, who claimed Areva’s activities caused death an illness among animals. In response, Areva halted drilling operations and closed camps and restarted operations in October 2013 after uranium was determined to not be the source of livestock deaths. Frances Ministry for Europe and Foreign Affairs stated “the French Alternative Energies and Atomic Energy Commission (CEA) has been providing nuclear science and technology training by for Mongolian specialists and students with the Mongolian Agency for Nuclear Energy since 2013.”
Russia and Mongolia formed the 50-50 joint venture Dornod Uranium deposit in 2008. Mongolia revoked the mining license of Canadian Khan Resources in 2009 and consequently, the Mongolian government ultimately compensated Khan Resources $70 million. Russia’s Rosatom and Mongolia’s Nuclear Energy Commission on 28 February 2018 signed a memorandum of cooperation for the construction of a Center of Nuclear Science and Technology.
India and Mongolia also signed a MOU for a civil nuclear use in September 2009 for the “peaceful use of radioactive minerals and nuclear energy” through long-term cooperation. The talks between India and Mongolia are informal because of Mongolia’s lack of framework even though Mongolia’s national-level laws changed including the Nuclear Energy Law. India’s nuclear energy needs will require nearly 300 nuclear power plants (NPPs) over the next 50 years and increase uranium production by ten-fold over the next 15 years to keep up with economic growth and providing electricity. India’s per capita consumption of power is approximately 1,122 kWh and over 240 million people in lack electricity. India will have to import uranium.
Mongolia’s first NPP, operated by state-owned MonAtom, was scheduled to be complete by 2020 to meet energy demands. Three sites under consideration are: Ulaan Baatar, western Mongolia, and the Dornod province. Mon-Atom operates under the Law on Nuclear Energy, and in compliance with the National Security Council and the Nuclear Energy Commission. Alternative clean and renewable energy is also emerging including wind farms and solar power—both initiatives supported by development institutions including the European Bank for Reconstruction and Development.
Before Mongolia can take advantage of its uranium deposits, the county in addition to its current Laws on Mineral and Nuclear Energy, needs a regulatory framework and a clear vision of use and storage of uranium and any products. Mongolia should consider more projects focused on training and education, establishing partnerships for technical assistance, transportation infrastructure building, and pollution reduction, until the country figures determines nuclear energy needs and until uranium moves beyond exploration. Mongolia should take advantage of its memberships in multi-national and regional organizations to improve the investment climate. Mongolia should also focus on diversifying its economy due to a slump in uranium prices and public opinion (including protests) reveals no rush to mine uranium.
Samantha Brletich is an analyst at the U.S. Department of Defense. She specializes in Central Asia.
