Nuclear plans: Uranium deposits have opened up new opportunities

While in the early stages, ambitious plans to develop a nuclear power industry will likely be put into motion in the years ahead, as will developments to expand the country’s uranium mining assets. This could position Mongolia as a leading player in the Asian nuclear fuels market, with high demand for feedstock and power.

Several challenges remain, however, not the least of which is developing the country’s expertise and human resources in the sector. While it may take time to achieve its nuclear goals, the government is committed to enhancing uranium mining and developing the sector.

BUILDING UP: During the Soviet era, the nuclear sector largely consisted of academic training in nuclear physics, with contributions of personnel to the Soviet Union’s nuclear programme. Mongolia also provided uranium from its significant mined resources. The destination for output was the Soviet Union, with the open pit Dornod deposit in north-eastern Mongolia mined by Russian interests up until 1995.

Mongolia has substantial proven reserves of uranium, around 80,000 tonnes, while Russian estimates identify between 120,000 and 150,000 tonnes. A series of intergovernmental agreements were signed post-1995 in an effort to restart this lucrative minerals trade, notably in 2008 when an agreement to jointly identify and develop Mongolia’s uranium reserves was signed. Further Russian-Mongolian treaties in 2009 and 2010 added to this, with the Russian parliament approving a January 2011 law establishing a joint venture, Dornod Uranium, to undertake work. Some 49% of this joint venture’s shares are owned by Russia’s Atomredmetzoloto. The rest is owned by Mongolia’s MonAtom.

MonAtom is a state-owned entity, set up in 2009 to undertake uranium exploration and mining and pursue the country’s policy on nuclear power. MonAtom reports to the Nuclear Energy Agency (NEA) and the State Property Committee. The NEA also has under its remit the Radiation Control Authority.

LEGAL FRAMEWORK: The 2009 Nuclear Energy Law puts all of these bodies and projects into a legal context. The law gave the state a much larger share in ownership of mining projects, while also re-registering existing exploration and mining programmes.

A pre-feasibility study regarding nuclear power commenced in 2008, involving a wide range of government agencies, ministries and academic centres, such as the Nuclear Research Centre in Ulaanbaatar. The centre identified a key need in Mongolia to train its own personnel for employment in a future nuclear power sector. While previously Mongolia had supplied many institutes of the Soviet Union with nuclear scientists, it had done little to provide for the future human resource needs of its own nuclear power sector. Indeed, the country lacks even a research reactor at this stage. At present, the sector’s future nuclear power plant managers and operatives are being trained largely abroad, some in Japan and others in Europe.

EXTERNAL INTEREST: Russia continues to be a big player in the sector, reportedly studying plans for nuclear reactors in Mongolia. The French have also been taking an interest, with Areva signing an exploration and mining agreement in late 2010. The latest company reports state that Areva Mongol, a fully owned subsidiary that has been operating in the country since 2006 has 28 exploration licences covering a total area of 14,100 km. Most of activity in mining of uranium is concentrated in the Gobi desert.

Given the degree of international interest in the uranium mining side, Mongolia now hopes to segue this into nuclear power stations as well. Officials argue that nuclear is a green energy option, and thus highly necessary for the country, given its current dependence on coal. The year 2011 was not a good one for such arguments, following the Fukushima incident in Japan, according to G. Tsogtsaikhan, the CEO of MonAtom. The country’s main focus for the medium term is to increase proven uranium reserves, he told OBG.

The idea also squares with a vision in Mongolia of a future in which the country’s abundant natural resources are not just simply shipped elsewhere for processing.

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The Report: Mongolia 2012

Energy chapter from The Report: Mongolia 2012

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