Agreement between France and Mongolia on a mining operation

Mongolia is rich in uranium but has not operated a mine since 1995. This situation could change as Orano has just signed a long-term agreement with a local investor to develop a mine at Zuuvch-Ovoo in the Gobi desert.

On 12 October, during President Ukhnaagiin Khürelsükh’s visit to Paris, an agreement was signed between Orano and the Mongolian state-owned investment company Erdenes Mongol LLC. The agreement covers the development and industrial operation of the Zuuvch-Ovoo uranium project in southwest Mongolia. The final investment agreement is expected to be signed by the end of the year.

Pilot operations over 2021-2022 have already confirmed the economic, environmental and societal feasibility of operating the Zuuvch-Ovoo site in the Gobi Desert, Orano said. The project was developed by Badrakh Energy, the joint venture between Orano Mining and Mongolian state-owned company MonAtom. Experiments were carried out over six months to test the extraction of uranium using in situ leaching methods. The pilot produced 10 tonnes of natural uranium concentrate.

Déclaration conjointe avec Ukhnaagiin Khürelsükh, Président de la Mongolie. pic.twitter.com/066ggOGXNY

— Élysée (@Elysee) October 12, 2023

“I am very proud to sign this protocol today, which extends a relationship we have had with Mongolia for over 25 years. The signature marks a decisive step in this historic partnership. This cooperation will enable us to develop the uranium sector in Mongolia while furthering the Group’s strategy of diversifying its mining activities.” commented Claude Imauven, Orano Group’s Chairman of the Board of Directors.

30 years of operation

Agnès Pannier-Runacher, the French Minister for Energy, said on X (formerly Twitter) that the agreement helped diversify France’s supply sources. “This is good news for our nuclear industry and our energy sovereignty”, she said.

L'accord entre Orano et la Mongolie en vue d'exploiter une mine d'uranium contribue à la diversification des sources d'approvisionnement françaises. C'est une bonne nouvelle pour notre industrie nucléaire et notre souveraineté énergétique.

— Agnès Pannier-Runacher 🇫🇷🇪🇺 (@AgnesRunacher) October 12, 2023

Orano says the mine will have an expected lifespan of 30 years for $1.6 billion. Mongolia has significant known resources, although no uranium mine has been operated there since the closure in 1995 of an open-pit mine at the Dornod deposit in the northeast of the country, operated by Russian industrialists.

While the world’s uranium resources are abundant, the doubling or even tripling of the world’s nuclear capacity by 2040, according to forecasts by the World Nuclear Association (WNA), means that several mines will have to be brought on stream in the years ahead. It takes around ten years for a mine to go from the exploration phase to production, so major investments must be made quickly to ensure that supplies are available in time, according to the organisation. ■