Mongolia’s uranium exports are foreign policy gold

90 % of Mongolia’s exports are reliant on the removal of natural resources. Ukhnaa Khurelsukh, the leader of Mongolia, signed a historic document in October 2023 while traveling to France as part of his position visit. This document opened the door for Orano Mining, which is owned by the French government, to invest US$ 1.7 billion in the company.

The contract enables Orano to launch Mongolia’s second uranium mining and processing business. Mining alliances are proper tools for foreign policy initiatives for Mongolia’s inland economy. &nbsp,

Uranium, which produces enormous amounts of dependable and low-carbon nuclear power, has long been a crucial metal for the global power system. Uranium is prepared to allow extraordinary development of nuclear generation as the world works to achieve net-zero emissions targets.

Mongolia’s desire to become a new market leader in uranium and diversify its presently thriving metal export capabilities is being driven by this world transition. &nbsp,

Mongolia is attracting international investment due to its extensive and largely untapped uranium reserves, and it has selected the French nuclear business as its first chosen partner to help its entry into the marketplace.

The World Nuclear Association estimates that Mongolia has 60, 500 kilograms of uranium reserves. Uranium investigation contracts have been made with China, Russia, and the Czech Republic since the uranium miners town of Mardai, Mongolia, was shut down. However, France will be the first to utilize Mongolia and take its plutonium.

Unlocking Mongolia’s vast uranium assets will have a significant positive impact on the country. It relates to diversification, the mining industry, and its shareholders. &nbsp,

Diversifying international investors is advantageous as a strategic tool to strengthen Mongolia’s third-north neighbor foreign policy, which aims to improve relations with nations besides China and, most recently, Russia.

The Orano contract has significant financial advantages. The government estimates that Ulaanbaatar will generate a total of$ 1 billion in tax revenue over the course of the mine’s anticipated 30-year life. &nbsp,

A sizeable portion of the revenue—roughly$ 47 million —will be set aside as compensation for Orano’s use of material assets in Mongolia. According to Mongolia’s Environmental Protection Law, the express takes possession of natural resources and demands repayment from non-governmental organizations in order to use them.

The initiative, which has been started by Badrakh Energy and is a joint venture between Orano and the Mongol state-owned company MonAtom, is anticipated to last for 47 years. The production of plutonium is scheduled to begin between 2028 and 2060, the preliminary work from 2024 to 2027, and later rehabilitation activities are scheduled between ten years and twenty seventy.

According to Claude Imavuen, president of the Orano Group, Mongolia is an important partner for France because of its geopolitical location between Russia and China and its abundant natural resources.

Uranium from Mongolia represents more to France than just a diversification of resources; it is also an essential new reservoir that may meet future demand for uranium in the United States and the European Union. &nbsp,

Nuclear power provides about 70 % of France’s power, and it has actively searched for uranium in Central Asia, including Kazakhstan and Uzbekistan, as well as Mongolia.

The demand for uranium is expected to rise by 27 % by 2030, according to the World Nuclear Association’s 2021 Nuclear Fuel Report. Mongolia is carefully positioning itself as a major contributor to global culture work in anticipation of an increase in global uranium need.

Mongolia continues to travel a gentle way as it looks for partners to assist its ambitious plans for economic growth, with international competition for essential minerals compounding the already strained geopolitics of the area. &nbsp,

Particularly during the global shift to renewable power, Mongolia’s foreign legislation appears to be a crucial connection between Europe and Asia.

Researcher Bolor Lkhaajav has areas of expertise in Mongolia, China, Russia, Japan, East Asia, and the Americas.

This article, which was previously published by the East Asia Forum, has been republished with a Creative Commons license.