Based on the previous work, we will start mining the Mardai group of deposits in the near future

What will be the responsibilities of the Nuclear Energy Agency, the Radiation control authority and МonAtom company? Can you describe the structures and the coordination between these?

The Nuclear Energy Agency is a government line agency directly accountable to the Prime Minister and the Radiation control authority is a part of this agency. The MonAtom company is a 100% state-owned enterprise under the nuclear agency. This structure is to ensure a cohesive implementation of the state policies with regard to radioactive minerals as well as the nuclear energy and technology.  

What are the lines of cooperation between MonAtom and the Russian company “Atomredmetzoloto“?

During the recent visit of the Mongolian PM S. Bayar to Russia, an agreement was signed between the Mongolian Nuclear Energy Agency and the Russian RosAtom corporation. This agreement envisages a creation of a joint venture between MonAtom and Atomredmetzoloto in order to jointly develop two uranium mines in Mongolia in which Russia has its stakes. It is also possible to have a third partner in this joint venture.

It looks like MonAtom will be in charge of all issues related to uranium deposits. In order to estimate the reserves and to issue licenses, one has to know the details of the business. Can you tell us about the previous work as well as the future plans in this respect?

In line with the Mongolian government’s major objective of developing uranium deposits, a nuclear agency was newly created. MonAtom will be the company that will be representing the state in the exploration and mining of these deposits. The Mineral Resources Authority that is in charge of registering reserves and issuing the licenses will be in close cooperation and coordination with the new agency and MonAtom company.

The Minister for Minerals and Energy D. Zorigt described the position of the government with regard to uranium whereby he stated that one of his main planned activities is to “develop deposits of radioactive minerals“. What will be done in the near future to develop the uranium deposits?

Both with regard to the radioactive minerals and nuclear energy, it is understandable that the support from Minister Zorigt and his ministry will be essential for us. The success of the government policy will depend on how cohesive we will be working as a team.

To briefly describe the planned work: we will be aiming, as soon as feasible, to start development of the Mardai group of deposits based on the previous exploitation of the area. We also will be integrating the data on the exploration work that has been undertaken in other areas and do the reserve estimation in order to prepare the development and mining within the laws of this country. We will also put requirements to use the technology, environmental and safety techniques that are within modern international standards.

Will you agree that uranium, being a new source of energy, is as important as copper for the growth of Mongolia’s economy?

Although the so-far discovered reserves of uranium are not as and hence valuable as of copper, coal or gold, we believe that there is a good chance of increasing the reserves based on further exploration. Also we believe that we should have an integrated approach, that is the processing and producing the final products from radioactive elements using the modern technology and thus creating the new source of energy. Then it will have a real value and future for Mongolia’s economy.

What are the price trends for uranium?

The current price for one pound of the yellow cake is around 43 USD.  It reached 160 USD a couple of years ago. When the world’s economy is stabilized, the price is expected to fluctuate between 70-80 USD per pound.

What does the competition looks like in the world uranium business? Our potential partner RosAtom is known in the world for producing arms. Will other countries become wary if Mongolia cooperates with RosAtom?

The competition is among a few countries. Mongolia is at the stage of attracting other’s attention only. In order to become one of the players in this business, the government will have to take a number of effective steps. So far a country that has expressed a clear interest in buying uranium from Mongolia is Japan. Japan has also expressed an interest in cooperating with Russia in extracting uranium in Dornod.

Large uranium projects are being talked about to be developed. What is the situation with human resources in this field?

Even during the socialist times, Mongolia was actively promoting the non-proliferation of nuclear arms as well as participating in international cooperation in basic research and development of nuclear technology. The activity is still continuing now.  A  good example is the cooperation with the Russian Nuclear research institute in Dubna.

More recently, there are examples of young Mongolians successfully studying, working and progressing in the field. In other words, when the projects start, there is a sufficient human resources base to start the projects. Of course, there is a great demand still to prepare many more specialists.

We have also actively cooperated with the IAEA. The head of the agency, Mr. El Baradei visited Mongolia recently. Following the development of technology, the issues of extraction of radioactive minerals, their processing, use and disposal of the waste, as well as the re-processing of waste, and the monitoring of the repositories are in the centre of the world’s attention. Therefore, it is important to listen to experts and scientists so that their ideas are integrated in the government policy and this will help Mongolia to raise itself to a new level in this field.

The government is negotiating over 1.5 bln. USD worth of loans from China. Also there is all this talk about Chinese buying the Gurvanbulag uranium deposit. If these are realized, then we may become too dependent on China from many aspects, isn’t it?

The government has been very actively trying to secure loans from outside in order to insure the economic growth during the times of the economic crisis. Many countries have been affected by the crisis, so it there may not be many countries that are willing to promise loans to Mongolia.

With regards to becoming too dependent on one country, we have a concept of the third neighbor and have been undertaking an active international diplomacy to ensure the balanced presence of other countries’ interests in Mongolia. With regards to the issue of buying into the Gurvanbulag license, we don’t have the right to discriminate against anybody who is working within the country’s legislation. Of course, the best solution would have been if we ourselves could raise the finances and develop the Gurvanbulag mine.
    
Have the reserves been estimated for the Dornogobi and Dornod basins, where an active exploration is taking place?

The work of approving the reserves for the deposits, except for the two deposits in Dornod, is starting now.

What are the lines of operation of the Chinese Nuclear Energy Corporation that is currently considering to buy the 75% stake in the Gurvanbulag mine?

China pays great attention to the development of the nuclear energy sector. There are predictions that China may increase its nuclear energy production 3-4 times in the next 10 years. The China Nuclear Energy Corporation is a government agency like our Nuclear Energy Agency. It was announced at the Toronto stock exchange that the CNNC International, a company affiliated to this corporation (70% - the Chinese government equity and 30% traded at the Hong Kong stock exchange) submitted its proposal to buy the 75% of the Western Prospector’s shares.

I understand that it is still open for other bidders to buy for better terms. In order to develop the Dornod mines in an integrated way, we are paying attention to cooperating with Japan and Russia.

Thank you. We wish success to the new company. MMJ will always pay attention to the issue of uranium and will be publishing positions of both the government and the investors with regard to this issue.