Investment agreement signed for Mongolian uranium project

Friday, 17 January 2025

Badrakh Energy, a joint venture between Orano and Mongolia's state-owned MonAtom Group, will be responsible for the industrial operation of the major Zuuvch Ovoo and Dulaan Uul/Umnut deposits, which Orano says have estimated uranium resources of close to 90,000 tonnes.

The agreement was signed following ratification by the Mongolian government.

Mongolia has substantial known uranium resources but there has been no uranium mining in the country since 1995, when mining of the Dornod deposit by a subsidiary of Russia's Priargunsky Industrial Mining & Chemical Union came to an end. Orano has been involved in uranium exploration in the Gobi Desert since 1997, which led to the discovery of the Dulaan Uul deposit in 2002 and the Zuuvch Ovoo deposit in 2010. The company says these deposits place Mongolia 12th in the world in terms of countries with the most uranium reserves.

The project will use in-situ leach (ISL, also known as in-situ recovery, or ISR) methods: pilot operations carried out at Zuuvch Ovoo over 2021-2022 have demonstrated the project's technical, economic and environmental feasibility. Development is planned to take 4 years. The project will have a nominal production capacity of around 2,500 tU per year over a 30-year estimated lifespan.

Initial investment will be around USD500 million before the project comes on stream, and a further USD1.6 billion will be invested over the mine's lifetime, Orano said. The mine is expected to create 1,600 direct and indirect jobs, and the project includes "significant investment" in the training of a qualified local workforce. Under the terms of the investment agreement, more than 51% of the direct benefits generated by the project, secured through taxes, dividends and royalties, will be received by the Mongolian state.

Orano CEO Nicolas Maes said the investment agreement lays the foundations for a mutually beneficial long-term relationship for Orano and its Mongolian partners. "Uranium production in Mongolia will contribute both to low-carbon electricity generation and security of supply for our customers," he said.

Prime Minister of Mongolia Oyun-Erdene Luvsannamsrai said the agreement supports economic growth and delivers on aims set out in the country's New Recovery Policy and Vision 2050. "This agreement is a significant step forward in boosting inward investment and employment opportunities for the Mongolian people," he said.

Zuuvch Ovoo is in Mongolia's southeastern Dornogovi province.