The Government of Mongolia has signed an investment agreement with France's state- owned company, Orano Mining. This is the second major foreign-invested project in Mongolia to move toward actual implementation, following Oyu Tolgoi.
The project is set to produce 68,900 tons of uranium, a key raw material for nuclear energy. Compared to coal-fired power plants, it is expected to reduce global greenhouse gas emissions by 3.9 billion tons.
MMJ journalist A. Khaliun spoke with D. Dalaijargal, Executive Director of Mon-Atom LLC-the state-owned company responsible for implementing the project on behalf of the Mongolian government about progress on execution of the project.
What progress has been made in the ten months since the Government of Mongolia signed the Investment Agreement with France's Orano Mining?
According to the Investment Agreement signed on January 17, 2025, production at the processing plant is scheduled to begin in 2028, with the first batch of products expected the same year. In preparation, several major construction and infrastructure projects are already underway.
First, construction will begin on approximately 120 kilometers of upgraded and paved roads connecting Ulaanbadrakh soum, Zuunbayan soum, and the Zuuvch-Ovoo deposit. Second, a 100-kilometer power transmission line will be built from the aimag center to the mining site. Third, since the plant's camp will be located in Zuunbayan soum, a residential complex with a capacity of 1,000 workers will be constructed. Workers will be transported 30-40 kilometers daily from Zuunbayan to the deposit. Fourth, the Zuunbayan railway will be expanded. Finally, the processing plant itself will be established.
Since February, Badrakh Energy has been conducting international tenders for road and energy-related contracts, and the selection of participating companies is now being finalized. While foreign companies participated, two Zamiin Bitum LLC for the Mongolian firms road works and Enkh Ugluu LLC for the power project were ultimately selected.
Representing government and state ownership, Mon-Atom strongly advocated for prioritizing domestic companies wherever possible. Mongolian firms now have the full capability to independently manage road construction, power line installation, and building projects.
Where will the funding for the infrastructure development come from?
It will be fully financed by the French. A key feature is that no funds will be required from Mongolia. The main objective within the project framework is to construct a major processing plant with an annual capacity of 2,500 tons of uranium, which will rank among the top five such plants globally.
We are committed to ensuring that Mongolians-especially local residents-are employed during the construction phase. Contractor selection will be completed this year, and once the warm season begins next year, earthworks and site preparation will commence. 
Another important task is ensuring that the Investment Agreement becomes fully effective. To achieve this, the Shareholders' Agreement and the Mining License Agreement need to be updated.
The Shareholders' Agreement was originally established in 2013 and is endorsed by Mon-Atom on behalf of the Government of Mongolia. This administrative agreement defines how the Board of Directors (BoD) will operate and outlines its scope of responsibilities and activities.
Previously, the ownership structure was 34% for the Mongolian government and 66% for the French side, but it has now changed to a 10%-90% ratio. Mongolia has decided to reduce its stake from 34% to 10%, and the Shareholders' Agreement is being amended accordingly.
Won't reducing Mongolia's ownership share to 10% have negative consequences for our country?
The main advantage of changing the ownership ratio to 10:90 is that Mongolia will not incur any debts, losses, or interest payments. In return, Mongolia will receive 50% plus 1% of the project's monetary revenue benefits.
By reducing its ownership from 34% to 10%, the government will still collect 15-16 different types of taxes from the investor company. For example, the royalty tax (Natural Resource Use Fee) is set at 19%. When all taxes are combined, the total exceeds 50%, ensuring that the agreement aligns with the principles of the Constitution of Mongolia.
As a result, it has become necessary to revise the Shareholders' Agreement to reflect these changes.
Additionally, the Mining License Agreement, signed in 2016, also needs updating. This agreement governs the technical and operational aspects of extraction and production. Drafts of both agreements have now been completed by both parties and are nearly ready. They will soon be submitted to the Government for review. Since the Investment Agreement was signed last January, all related activities have been actively progressing.
Has the current political situation and disagreements among Parliament and Government officials had any negative impact on the project's operations?
Since the Investment Agreement has already been signed, we are proceeding strictly according to the implementation schedule. As the financing is fully provided by the investor, there is no risk of delays or interruptions. The work is progressing exactly as planned.
How many people are currently working on the project?
Currently, around 150 people are involved in the project. Of these, about 60 are based in the office, while more than 80 are working at the Zuuvch-Ovoo and Dulaan-Uul deposits. Badrakh Energy has established a Human Resources Department and is actively recruiting qualified personnel. By the time production begins in 2028, the project is expected to employ approximately 900 workers directly, with an additional 900 positions created through subcontractors, bringing the total workforce to around 1,800. Open job listings are regularly posted on Badrakh Energy's official website.
Uranium mining is a new sector for Mongolia. There was a uranium mine operating in Dornod aimag during the socialist era, but it was run by Soviet specialists.
The investor began preparing human resources as early as 2006-2007. Over the past decade, specialists have been trained in in-situ leach mining, chemical technology, radiation management, and other advanced fields. Mongolian professionals are also being trained and employed at Orano Mining in France.
Under a Cooperation Agreement with the Mongolian University of Science and Technology (MUST), young Mongolians are receiving education and technical training. $7.8 million has been allocated for training and developing personnel under this project.
This project is introducing new technologies and professions to Mongolia, which is highly positive. For example, the role of hydrochemist is entirely new to the country. In total, 13-14 types of specialists including those in nuclear radiation safety are now being trained in connection with the project.
Civil society organizations have voiced criticism over radiation safety in uranium mining, prompting public concern. What is the current status of establishing a national laboratory to address these concerns?
During the recent Mongolia-France Intergovernmental Commission meeting, both sides reaffirmed their commitment to supporting the establishment of a national laboratory to enhance transparency and public trust.
The Mongolian side is now responsible for defining the laboratory's capacity and areas of focus, and for developing a detailed project proposal. Specifically, the Mongolian side must determine the type of laboratory to be established operate in areas such as human and animal health, soil, water, air, and environmental monitoring. 
It was also agreed to include representatives from civil society organizations especially those who have voiced concerns or skepticism the committee responsible for establishing the laboratory, allowing them to directly observe and verify its findings.
We've heard that citizens are being given the opportunity to visit the project site in Ulaanbadrakh soum to learn about it firsthand. How many people have visited so far? 
Since the start of pilot production, local residents have been visiting the site to see the project firsthand.
To date, nearly all of the more than 1,500 residents of Ulaanbadrakh soum have visited the site. People tend to gain a clearer and more accurate understanding after seeing the operations for themselves. Fear often stems from the unknown but once individuals visit and learn about the process directly, they become better informed and view the project differently. Even now, those who still have doubts or concerns are being encouraged to join organized visits to the deposit area to see it with their own eyes.
The project is currently in its preparatory stage, with major infrastructure works about to begin. Although no extraction or industrial operations are yet underway, public information and awareness activities continue. The project is expected to run for 34 years. In the initial phase, annual production will be around 1,500-1,600 tons of uranium, eventually reaching 2,500 tons once full capacity is achieved. For comparison, Kazakhstan world's leading uranium producer about 15,000 tons per year, followed by Australia and Canada. Once operational, Mongolia's facility will rank among the world's top five or six uranium processing plants. 
How is the significance of Mongolia's uranium project increasing?
Uranium is a unique natural resource. First, only a small number of countries - just 13 worldwide have uranium reserves. Mongolia ranks 11th, holding about 2% of the world's total, or roughly 200,000 tons. Countries with the largest uranium resources include Kazakhstan, Australia, Canada, Russia, and China.
Second, uranium extraction requires highly advanced technology, which is currently mastered by only seven or eight developed nations. Third, uranium mining is a complex, technology-intensive process that differs greatly from the extraction of other minerals such as gold or copper.
The yellowcake produced in Mongolia will be transported to France for enrichment and used as nuclear fuel. France generates around 85% of its electricity from nuclear power and supplies energy to eight neighboring European countries.
The significance of this project extends beyond mining itself and Mongolia will play a crucial role in contributing to Europe's energy stability. This gives the project strategic importance for Mongolia's foreign policy and national security, in addition to its economic benefits. It will also enhance how European countries perceive Mongolia.
Previously, France sourced uranium from Niger and Kazakhstan. However, Niger experienced a coup two years ago, halting its uranium projects, while Kazakhstan's current deposits are expected to be depleted within about two years. Having fully mastered advanced uranium extraction technologies, Kazakhstan is now capable of independently implementing future projects.
In addition to domestic production, Kazakhstan has expressed interest in investing in and cooperating on uranium exploration and mining projects in Mongolia.
France is currently conducting uranium mining operations in both Uzbekistan and Mongolia. However, Uzbekistan's uranium reserves are less than 20% the size of Mongolia's Zuuvch- Ovoo and Dulaan-Uul deposits. This positions Mongolia as an emerging and important supplier of nuclear fuel for Europe.
During his state visit to Mongolia in 2024, Kazakhstan's President K. Tokayev proposed establishing cooperation in the uranium sector. Has this initiative been pursued?
Kazakhstan has been actively engaged in uranium mining since 1997 and has mastered advanced technologies, becoming one of the world's leading uranium producers. During President Tokayev's state visit, the two heads of state exchanged views and reached a mutual understanding, giving us a clear mandate to pursue cooperation. As part of the visit, Mon-Atom signed a Memorandum of Understanding with Kazakhstan's Kazatomprom to collaborate in uranium exploration and mining.
How do you assess the significance of this project, as Mongolia joins the ranks of the few uranium-producing countries in the world?
This project is the second major foreign- invested initiative in Mongolia after Oyu Tolgoi to move forward with concrete implementation. With 100% of the investment provided by the Orano Mining Group, the project is progressing according to plan, unaffected by domestic political fluctuations. Key provisions are clearly outlined in the investment agreement, allowing all preparatory work to continue as scheduled..

Published Date:2025-12-05