D. DALAIJARGAL:THE IAEA WILL CONDUCT RESEARCH AND MONITOR THE ZUUVCH-OVOO DEPOSIT

MMJ journalist R. Renchindulam sat down with D. Dalaijargal, CEO of Mon-Atom LLC, to discuss Mongolia's policies on radioactive minerals and its joint uranium project with France.

What policies are the Mongolian government implementing to develop the radioactive minerals and nuclear energy sectors? What legal changes and solutions are being introduced to improve regulations on uranium exploration, mining, and utilization?

The Mongolian government adopted its policy on radioactive minerals and nuclear energy in 2009. Its primary goal is to expand the country's reserves of radioactive minerals and utilize them for peaceful purposes. Additionally, it aims to develop the uranium industry-from mining to processing-and establish Mongolia as an exporting nation. By doing so, the policy seeks to attract the strategic interest of economically powerful countries while ensuring Mongolia's sustainable development and national security.

Radioactive minerals, including uranium, are among the most abundant elements found deep within the Earth's crust. Uranium, in particular, is 400 times more abundant than gold and 20 times more abundant than silver, having formed millions of years ago during the Earth's early development.

While uranium exploration and mining share similarities with other mineral resource activities, they are distinct in that they are regulated under the Nuclear Energy Law. Obtaining a special license for uranium mining requires consideration of recommendations from the Nuclear Energy Commission, the central authority on nuclear energy, as well as input from the Central Intelligence Agency.

However, according to the amendments to the Nuclear Energy Law, approved at the end of last year, the percentage of state ownership in radioactive mineral and uranium deposits- or any alternative arrangements will be determined by Parliament, based on a proposal submitted by the Government.

Can you provide information on the structure, organization, and functions of key organizations related to radioactive minerals, such as Mon-Atom LLC and the Nuclear Energy Commission?

The Nuclear Energy Commission was first established under the Council of Ministers in 1962. In 2015, a Government Resolution restructured the commission and established its executive office, both of which continue to operate today.

Since its establishment, the Nuclear Energy Commission has worked to introduce and adapt the latest innovations in nuclear science in Mongolia's social and economic sectors, including education, science, healthcare, food, agriculture, geology, mining, and heavy industry, while ensuring radiation safety and security and expanding international cooperation in these areas.

As a state-owned subsidiary of Erdenes Mongol LLC, Mon-Atom LLC was established in 2009 by government decree as a 100% state- owned limited liability company. Its mission is to "participate in geological exploration and mining of uranium and other radioactive minerals-either independently or in partnership with other legal entities and to represent the state in accordance with relevant legislation".

Mongolian-French Badrakh Energy LLC exemplifies the principle of state representation through the establishment of a joint venture, in accordance with Articles 5.2 and 5.3 of the Law on Nuclear Energy. The company's investor, Orano Mining Group, is one of the world's leading players in the uranium market.

Mongolia is currently ranked among the top ten countries worldwide for uranium reserves. But how accurate is this ranking? As I see it, there has been little to no exploration or research in recent years to reassess Mongolia's uranium reserves. Instead, current figures appear to be based on estimates from the Soviet era. Could you provide comprehensive information on the latest uranium exploration efforts in Mongolia, as well as details on identified deposits?

Mongolia currently has 192,000 tons of proven uranium reserves within its identified deposits, accounting for 2% of the world's total uranium reserves and securing its position in the top 10 globally. Additionally, based on 70 years of Russian research, Mongolia's total uranium ore resources are estimated at 1.4 million tons.

In the late 2000s, more than 170 licenses were issued to 35 uranium exploration companies with foreign investment. However, following the 2010-2011 Khan Resources arbitration dispute and the Fukushima nuclear disaster in Japan, most investors withdrew from the sector.

However, with the approval of the Investment Agreement for the Mongolian- French joint project, foreign investors have shown renewed interest in cooperating in the uranium exploration sector. Their activity has increased significantly and expected to invest in exploration and research to further expand Mongolia's uranium reserves.

The French-invested Badrakh Energy uranium project will be developed across three adjacent deposits: Zuuvch-Ovoo, Dulaan-Uul, and Umnut. Aside from this. what other uranium projects are planned for the near future?

State-owned Mon-Atom LLC is actively expanding its collaboration with France the Czech Republic, China, Russia, and Kazakhstan, engaging in various joint projects Notably, in partnership with the Czech Republic we are preparing to develop the Kharaat. Khairkhan, and Gurvansaikhan deposits in Dundgobi aimag, as well as the Ulziit uranium deposit in Sukhbaatar aimag. This is set to be our next major project.

The investor, which holds a 66% stake in the Czech Republic's Uranium Industry Company, has been operating in Mongolia in compliance with local laws since 2012. It has also obtained a special exploitation license to develop the aforementioned deposits.

However, in recent years, several non- governmental organizations have filed lawsuits with the Administrative Court, seeking to revoke the exploitation licenses of Gurvansaikhan LLC, the company implementing this project. As a result, four exploitation licenses have been canceled. In response, the investor is now compelled to file a lawsuit with the arbitration court in an attempt to regain these licenses.

Although Gurvansaikhan LLC's operations are currently at a standstill, the process of restoring its special licenses is progressing toward a positive resolution, following multiple court proceedings and the efforts of relevant government organizations.

The Czech Republic is one of the major players in the global uranium industry, with experience in uranium exploitation dating back to the 1960s. Their methods of mining and processing uranium are similar to those of the French project. It is of great importance for us to bring the aforementioned deposits, along with other strategic deposits in Dundgobi aimag, into economic use.

What are the reasons and guarantees for trusting and cooperating with the investor, the French company Orano Mining?

Orano Mining is not only a French state- owned company, but also one of the world's leading uranium mining and nuclear energy firms, employing 17,000 people worldwide. France generates over 70% of its electricity from nuclear energy and also exports electricity to eight neighboring countries.

Work on the investment agreement has been accelerating in recent months. While some believe the government signed the agreement too early, the project was actually approved after nearly 28 years of discussions. What was the main reason for this delay?

Kogegobi LLC, a subsidiary of the French company Orano Mining, one of the world's top three uranium mining companies, has been conducting exploration activities in Mongolia since 1997 and confirmed its first reserves in 2007. Since then, it has been steadily implementing preparatory activities for mining in stages.

We signed the investment agreement after more than just a few months of negotiations. Throughout the project, we encountered numerous obstacles. For instance, we had been preparing to start pilot production since 2017, and after gathering 106 signatures from over 30 state organizations, the pilot plant finally began operations in 2021. There were many reasons for this delay.

Experimental mining was conducted at the Zuuvch-Ovoo uranium deposit for 1.4 years. From what I understand, there are still people living in the area. and raising livestock, having been there for many years. Why do they continue to reside there? Does this indicate that the risk is low? Additionally, how will the environmental impact assessment be conducted in the future?

As part of the project, a total of eight studies have been carried out by the government, international organizations, and the Mongolian Academy of Sciences since 2013. These studies examined the potential impacts of radioactive mineral exploration activities on soil, water, plants, animals, and human health.

The Academy of Sciences completed an environmental baseline study in 2021, prior to the pilot plant phase of the project, and a post-pilot plant study in 2023. Compared to other projects, this approach is set to become a model, as studies were conducted both before and after mining commenced. These studies indicated that there were no adverse effects on human or animal health, nor on the environment, due to radiation.

In terms of animal health, the veterinary cooperative conducted a survey in three soums of Dornogobi aimag, including Ulaanbadrakh soum, where uranium deposits are located. The results indicated that the number of animal diseases in these soums was lower than the national average for Mongolia, and no radiation-related diseases were identified.

You raised a good point. There are still herder households living in the project area, which suggests that the risk is minimal. In the future, environmental impact assessments will continue to be conducted in accordance with the law. Additionally, the Investment Agreement stipulates that the International Atomic Energy Agency will conduct research and monitoring every three years.

The Investment Agreement with Orano Mining stipulates that the mining royalty should be up to 19%, which is currently the highest royalty in the world. However, it is no secret that the investor's acceptance of this term raises suspicions among some people. Why do you think they agreed to this condition?

Initially, we charged a maximum royalty of 5%. The Nuclear Energy Law increased it to 19%, representing an unprecedented tax globally, Kazakhstan, which holds the mod uranium reserves, charges a royalty of 5.5% Thus, the fact that we imposed such a high royalty indicates that we have negotiated an agreement with our investors to levy the maximum amount.

The most important aspect is that the benefits for the Mongolian people will be significant. We Mongolians learned from previous agreements and sought opportunities for profit through direct sales rather than merely owning 34%. The French side accepted our proposal. They will enrich the yellow uranium powder and utilize it as fuel for nuclear power plants. Of course, they accepted our proposal because they calculated their potential profit.

It has already been agreed to build a sulfuric acid plant as part of the uranium project. What kind of infrastructure will be developed in Mongolia under this project? Additionally, what are the benefits and advantages of having a sulfuric acid plant?

The two sides reached an agreement to develop the Dornogobi aimag, or Gobi region. Ulaanbadrakh and Zuunbayan soums will receive one billion MNT in addition to taxes each year. A complete set of infrastructure will be established, including a 100 km overhead power line from Sainshand to the mine site, a 50 km paved road from Zuunbayan to the site, a mining village for 500 people, and 60 km of improved dirt road from Zuunbayan to Ulaanbadrakh soum.

Mongolia currently consumes over 10,000 tons of sulfuric acid annually. However, with the implementation of the uranium project, sulfuric acid consumption is expected to increase twentyfold. The Erdenet copper smelting and refining plant is capable of supplying 40% of the elemental sulfur it produces to a new sulfuric acid plant, which is yet to be built. This will be sufficient to meet the increased demand. As a result, $45 million per year, which would otherwise be spent on importing this critical material, will remain within the domestic market, providing a positive boost to the national economy.

How is hazardous waste managed during uranium mining? This topic has been discussed many times in Parliament and Standing Committees, but I want to ask this question again...

When the main operation begins, there will be three types of waste: ordinary waste, low- level radioactive waste, and hazardous waste. However, it is important to clarify a common misconception: there is no such thing as "hazardous uranium waste." Hazardous waste refers to materials like lubricating oil, tires, and empty chemical containers, but not uranium itself.

Hazardous waste will be sorted and properly disposed of or transported to a hazardous waste treatment facility. Additionally, there is low-level radioactive waste, which includes pipelines, protective equipment, gloves, and other materials that have been exposed to uranium solutions during extraction. This waste will be managed on-site in accordance with International Atomic Energy Agency regulations. It is important to note that this is not nuclear waste and cannot be compared to waste from a nuclear power plant.

In simple terms, this waste is three times less radioactive than the exposure a person receives from a single chest CT scan. A chest CT scan delivers a dose of 6 millisieverts, while standing near this waste for one hour results in a dose of 1.9 millisieverts.

Will Mongolia develop a nuclear power plant as a result of this project, or will it continue to be just a supplier of uranium raw materials?

One of the objectives of "Vision 2050 is to 'ensure energy reliability, safety, and sustainability, build new power plants, and meet domestic energy needs while exporting electricity. Additionally. the Mongolian Government's 2024- 2028 Action Program states that the Mongolian-French joint uranium project will be implemented, along with a foundational study for constructing a nuclear power plant in Mongolia. This initiative has been approved as one of the 14 mega projects of the government, and the work is progressing in stages.

The European Union officially declared nuclear energy as "green" in 2022. Additionally, in the context of global climate change and the goal of reducing greenhouse gas emissions, Mongolia joined the Kyoto Protocol in 1997 and the Paris Agreement in 2015. Therefore, the development of nuclear power plants, which are considered to be sources of green energy, is a matter of time.

The French will enrich the uranium yellow powder extracted in Mongolia and convert it into fuel for nuclear power plants. Similarly, our country builds a nuclear power plant, it will be fully capable of supplying energy to Mongolia. In other words, the raw material for nuclear fuel is available here, allowing us to capitalize on our advantages to expand our energy sources and address many of our pressing challenge.