By Charles Kennedy – Dec 27, 2024, 9:30 AM CST
Mongolia and French group Orano Mining have struck a preliminary agreement to develop a $1.6-billion uranium mining project in the Asian country, the Mongolian government said on Friday.
The cabinet has sent a draft agreement on the project for approval by the Parliament, according to an official statement cited by Reuters.
Mongolia is estimated to hold around 60,500 tU in reasonably assured resources plus inferred resources to $130/kgU, according to a 2020 joint report by the OECD Nuclear Energy Agency and the International Atomic Energy Agency (IAEA).
A 2019 report by the Minister of Mining and Heavy Industry revealed that the mining industry accounts for 25% of Mongolia’s GDP and 90% of total exports, according to the World Nuclear Association. The mining industry employs 3.6% of the country’s population.
Currently, there is no active uranium mining in Mongolia.
Uranium was produced from the Dornod deposit in Mongolia by Russian interests until 1995.
Now France’s Orano and the Mongolian government preliminary agreed to launch a preparatory stage until 2027, and first production is expected in 2028, according to the Mongolian government.
Peak uranium production is provisionally expected for 2044.
“This agreement is a significant step forward in boosting inward investment and employment opportunities for the Mongolian people,” Mongolian Prime Minister Oyun-Erdene Luvsannamsrai was quoted as saying in the official statement.
Orano Mining says that it has been present in Mongolia for over 25 years. The company has been successful with its exploration activities, discovering and registering important uranium resources. Orano’s subsidiary in Mongolia has obtained three mining licenses and successfully operated two pilot tests.
Western countries will need additional incentives and sanctions on Russia to reduce their dependence on the Russian supply of nuclear fuel, Orano’s CEO Nicolas Maes said earlier this year.
“To entirely disconnect from Russia, we need new capacities, and industrial groups will only invest if they have long-term contracts,” Maes told the Financial Times in an interview in October.
By Charles Kennedy for Oilprice.com
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