Interview
Mongolia’s uranium: now and tomorrow
2016-06-09
E.Odjargal finds out from E.Galbadral, Executive Director of Mon-Atom LLC, the current state of Mongolia’s uranium deposits, and what the future holds.
What is the legal operational status of Mon-Atom?
We are a State-owned LLC that was established under Government Resolution №. 45 in 2009. The Law on Nuclear Energy of Mongolia was passed in the same year and led to the formation of the Nuclear Energy Authority – a Government regulatory agency for the entire sector. This was dissolved last year and its functions were transferred to the Nuclear Energy Commission headed by the Prime Minister. Mon-Atom operates under the Law on Nuclear Energy, and in compliance with recommendations and decisions of the National Security Council and the Nuclear Energy Commission.
The company’s operational responsibilities include exploration work on uranium and other radioactive geological minerals, identifying, using and extracting resources, and representing the State in domestic and international joint projects.
Some steps were taken on international joint ventures last year, no?
Yes. A new joint company was established in the uranium sector. An MOU had been signed between Mon-Atom and Uranium Industry LLC of the Czech Republic in 2013, and last year Mon-Czech Uranium LLC came up, with 51% share owned by the Mongolian Government.
The Czech Republic has a special place in uranium mining, with more than 60 active mines, and it also has wide experience in exploration. Interestingly, it was a team of Czech geologists who identified the copper deposit on which the Erdenet factory is based, and we expect similar success with uranium from the new joint company. Exploration work has already started. Our Government will bear all expenses on geological and exploration work, and will own 51% of any deposit discovered.
It will follow standards laid down by the National Standards Committee. These include the MNS ASTM 976-2015 standard, which covers extraction of the uranium ore concentrate or yellowcake, and its processing, and the MNS 0442-2015 standard, which covers use of sulfuric acid in extraction by the underground leach method. Following these standards have been made mandatory in joint projects.
Apart from this, an MOU signed by Mon-Atom with the Mongolian Employers’ Federation calls on them to work together to ensure that standards of international occupational safety are followed in projects operating in the uranium sector.
All countries with any project in the nuclear sector have to comply with guidelines issued by the International Atomic Energy Agency. Mongolia is now busy preparing a comprehensive legal framework in the uranium sector.
What are your plans for this year?
It will be a busy year for our company. The primary target is to discover new uranium resources. All exploration work started in 2015 by Mon-Czech Uranium will continue, and these are to intensify in the coming years. Our focus in 2016 will be on the western and eastern aimags.
How much uranium reserves do we have?
A reserves amount of 140,000 tons, as approved by the Mongolian Minerals Council, has been registered with the International Atomic Energy Agency, making us one of the 10 countries with most reserves. There has been no addition to the reserves in recent years, but we do have inferred resources of around 1.7 million tons. In comparison, Kazakhstan has 1.5 million tons of approved reserves.
Which countries does Mon-Atom currently cooperate with?
Radioactive minerals are not an area where choice to cooperate is easy. Mon-Atom has MOUs with 3 of the 5 permanent members of the United Nations Security Council. Apart from the joint venture with the Czech company, Mon-Atom partners China’s CNNC in the Gurvanbulag deposit project. We are also in talks with the French company Areva to start commercial exploitation of two uranium deposits.
Altogether 11 uranium deposits are registered in Mongolia, and talks with China, Russia, the Czech Republic, France, Japan and Canada to move those deposits into economic cycle are in different stages.
Which projects are being actively implemented?
There is no project that can be said to be under active implementation right now. Some exploration work is to be taken up in summer, and the project with Areva is going to move forward to the extraction stage.
What work is going on in the Areva project?
Mon-Atom, Areva and Japan’s Mitsubishi agreed in 2013 to establish a joint company. Areva by itself is active in Dulaan-Uul and Zuuvch-Ovoo deposits in Dornogovi aimag, which could be among the world’s 10 largest uranium deposits. We are trying to move the two deposits into economic cycle. Cooperation between Mongolia and France is important to utilise the vast experience of Areva.
Has anything been decided on transferring licences held by Areva?
In June 2015, the Mongolian Government granted an operating licence to Areva’s subsidiary Kogegobi LLC. This has had a impact, in that a new deposit is being put into economic cycle.
The Czech Republic’s Uranium Industry LLC was to buy the share of Canada’s Denison Mines Corp’s ownership of the Gurvansaikhan deposit. Is the deal complete?
Denison Mines came to Mongolia in 1993, and has invested a lot in exploration work. Mon-Atom and Denison Mines jointly established the Gurvansaikhan company.
When Uranium Industry does get to own the present Canadian share in the company, it and Mon-Atom will have to set up a new company owned by them. The new company will then submit an application asking for an “A” licence.
What is your opinion on the decision of the International Arbitration Court that requires the Mongolian Government to pay compensation to Khan Resources?
The issue is very significant.
What is the current status of cooperation between Mongolia and Russia in the uranium sector? There have been several reports Russia will be allowed to use the Mardai uranium deposit after it has written off Mongolia’s debt to Russia.
We signed an MOU with Russia to establish the Dornod Uranium joint company in 2009, but little progress has been made since then. We talk regularly with top organisations to expand the areas of cooperation with our two neighbors, but it is too early to talk about specifics.
Is it right for Mongolia to produce uranium?
As a person working in this sector I would not say that it is wrong. Mongolia is a member of the UN, and is thus committed to giving “the world the essential things”. Use of uranium is important today, as 20% of the total energy consumed is produced by nuclear power plants. Nuclear technology is also widely used in the health sector.
Thus we should not shun nuclear technology. We might decide not to build a nuclear power plant in Mongolia, but uranium at the yellowcake stage can surely be used as a raw material, just like other minerals such as coal, gold and copper. The Government’s action plan between 2012 and 2016 said we would use uranium as a yellowcake, and we would not shift from this and use uranium in any other way. But the uranium sector should be allowed to develop, as it will be economically beneficial and will also raise Mongolia’s international prestige.
After working in a senior position in the uranium sector for the past 4 years, how do you see the future?
Many countries have prospered by using their mineral resources in innovative ways, and by proper application of technology. Mongolia is at the moment planning to start on one of the 4 stages of uranium use. It is clear that some day the uranium will move into the economic cycle. What we need to do now is to start building the base. We have to understand that uranium will one day be the core component in any technology.