S.Enkhbat: “IT IS AN OVERWHELMING AIM“

Below is an interview made with Prof.S.Ekhbat, Chairman of Nuclear Energy Department of Mongolia.  What is the organizational structures of Nuclear Energy Department, MonAtom company and Radiation Censoring department? Who is responsible in what areas? The main concept of establishing this department is to consolidate all uranium issues in the state policy. Previously, there was nuclear energy commission. Although it was supervising all concerning issues members were department and unit heads of various ministries. Therefore, they have been lacking in a comprehensive communication and coordination. Now, the chairman of nuclear energy commission of Mongolia is Prime Minister. The members of the department are ministers, vice ministers and state secretaries. Therefore, there is a more chance to see the commission making promising decisions. That is how the policy will be made. It will need to have other organizations to process, implement and monitor the policies. Therefore, a coordinating agency with the name of nuclear energy department was established. The structure of the agency is very unique and will carry out multiple functions. The pivotal part of its functions is the atomic and radiation censoring. The agency will exercise this type of censoring. In general, the agency has three departments and one of them is nuclear and radiation censoring department. The other one is nuclear technology department. It has a  function of formulating a nuclear technology policy and has to make decisions on uranium and power sectors and in general it will determine how to work in all sectors deploying nuclear technology and how to apply the technology. The third department is the state administration department. This is a typical unit of any state organization. The department will be responsible for finance, law and foreign relations. With regard to MonAtom, it will be supervised by our department. The license issue shall be systematized under a new law. MonAtom will be responsible for all licenses and permissions of the state. MonAtom LLC may decide whether to carry out research and exploration in collaboration with foreign investors or independently. It is a state-owned company established with the aim of starting up all projects related to uranium extraction and processing. The Government resolution assigned the state property committee and our department to establish the company and initiate its activities. The minister for minerals and energy D.Zorigt defined the government position on uranium by stating that one of his action plans was ‘to put radioactive minerals into economic cycle‘. What kind of activities are expected to be carried out in order to introduce the uranium into economic cycle?  There are three deposits with definite reserves such as Gurvanbulag, Mardai and Dornod. They are ready for immediate extraction. Once the law is passed uranium will enter the economic cycle quite soon.  Furthermore, we have to determine the reserves. Firstly, it must be clear what we have and on the basis of that we make our calculation and long term plan, then we will be able to attract foreign investors. If it is not definite what we have, the investment is less likely to be in.  At the outset, exploration and additional exploration shall to be done. Additional exploration has to be carried out on determined deposits. Although foreigners estimate uranium reserve of Mongolia to be around 63,000 tonnes, in fact, it is much great than that. At present, it is said that Mongolia ranks 15th by its uranium reserves in the world. If the reserve increases and reaches 10-12% of the world reserve, Mongolia will move up to the 5th place. In this case, Mongolia will become one of the influential countries. When the Cabinet will discuss the draft law? Who are working on the proposal? The draft was made last year. A working group constituted by representatives of all ministries made the draft and presented to the international atomic energy agency and it received a comment from IAEA. The comment was incorporated into the draft law accordingly. At present, it is the level cabinet hearing. If cabinet passes it, the draft law will be submitted to the parliament spring session. Which country law model was used in making the draft law? What is the characteristic of the main principle of the law and how it is different from laws of other countries?  We compared uranium laws of many countries. There is a model law made by IAEA. We used that law in addition to making research on laws of Canada, Kazakhstan, Australia and Korea. However, we did research on laws of countries with no nuclear weapon. All available laws were compared and we also had some 2-3 drafts already made. Therefore we had some basic foundation and we discussed what to apply and where from so that we come to a common vision and then we proceeded to the current draft. Uranium is a unique mineral. The law has to cover many meticulous details. What do you think how well did you do draft the law in this regard? Which country was the most applicable while reviewing laws of other countries? Australian law was very appealing. It was concise and clear. It clearly pointed what was allowed and must abide by and what shall be prohibited. It is a very clear and easy. Korean law was very comprehensive. It was very complex and too detailed. It resembled American school. Mongolian law leans towards the Australian law. We put effort to prohibit as less as possible and make it as open as possible; however, the state censoring shall be strict when it is required. We endeavored to make it easier to read to professionals and non-professionals. Therefore, I think it is well done.What do you think about Russian law on this matter?Russian law is very complicated. In general, the law on nuclear energy itself covers a wide spectrum. It requires many other laws attendant to it. In case of Mongolia, we are doing the principle law now. Other laws and regulations on radiation protection and transport of radioactive elements shall be passed subsequently. We reviewed the Russian law. It was not consistent with conditions of Mongolia. It is very stringent, you may say. Also because Russia has nuclear weapon, it is very different. Mongolia, firstly, doesn’t have nuclear weapon, secondly, it jointed the international convention against nuclear weapon proliferation and it is independent from nuclear weapon. It has passed the law on independence from nuclear weapon. Therefore, this standing was reflected more on the law.  Prime Minister expressed his interest in cooperating with Russia on uranium. A discussion is going on cooperation between MonAtom and RosAtom. Would other countries be cautious of Mongolia? RosAtom corporation has the same competence as the ministry. It is as large as the ministry. Previously, it was the Ministry of Atom, then it took a name of RosAtom agency and then became a corporation. Recently, a cooperation agreement was signed between the nuclear energy department and RosAtom. MonAtom LLC will cooperate with “AtomRedMet Zoloto“ (ARMZ), a subsidiary of RosAtom. What specifically MonAtom will do when cooperating with the above mentioned company? It is not clear, right? First of all, there is an issue of uranium exploration and extraction. When a resolution is made between governments to cooperate, it means two government organizations will cooperate and subsequently they shall carry out businesses through companies under their supervision. Otherwise, the agency itself or a ministry will not run businesses. Therefore, those companies shall be responsible to run the business and put the uranium deposit into economic cycle. For example, in Dornod province, there is a company Central Asia Uranium. Altogether, 21% of the company’s shares are owned by the Mongolian Government. That 21% ownership is to be transferred to MonAtom company. Russian Government also owns 21% of it. This portion will move to ARMZi. These two companies will cooperate by consolidating their shares. The very essential part of the law is censoring. How the uranium radioactive elements will be censored? Due to precedence in Mardai, the society is worried when discussing about uranium. How this is considered in the law? The issue of censoring is indeed the most important part. There are some agreements made with the IAEA. IAEA shall exert extra censoring. There are some talks and discussions to cooperate in the censoring with IAEA. The law doesn’t only address censoring issue, but also some amendments were introduced to the law on radiation protection due to uranium extraction and power deployment. And the title of the law is being amended to the law on nuclear and radiation censoring. The proposal will not include one or two amendments, but a series of amendments to a number of laws. Is there any provision on ecological protection? The draft law imposes specific restrictions on who will be operating the uranium mine. The operator shall abide by principles of transparency, shall be experienced in uranium extraction, shall be economically sound, shall use eco friendly technology and shall have a history of rehabilitating the environment. Besides that, the person shall deposit a portion of environmental rehabilitation cost prior starting the extraction.  Canadian Western Prospector is negotiating with Chinese nuclear energy Corporation to sell 75% of its shares. Prime Minister’s statement of cooperating with Russia may prevent Western companies from staying in Mongolia. Is it appropriate to cooperate with a country with nuclear weapon? I guess, that is the reason. Cooperation with Russia doesn’t mean that all uranium will be given to Russia. Even the agreement stipulated that “A third party will participate.” The third party can be any person. For example, Japan could be the third party. I don’t think that a cooperation of Japan, Russian and Mongolia may make Western companies go away. I have a different view point on selling licenses. When a company has low income, affected by prevailing economic crisis, banking and financial problems, in shortage of cash and there is a need of cash and when somebody is willing to pay cash, one will think it is better to sell. On the other hand, a draft of the state policy or uranium was circulated to all major uranium companies of Mongolia, which gave a message that such and such state law and regulation are being considered and signaled to be prepared. It is inappropriate to force the policy all of a sudden. As a democratic country, there should be a clean game. The state law and policy stipulated that small scale companies were not allowed to operate in uranium sector. On the other hand, with regard to deposits of strategic importance on which exploration has been done by the state funds, there is no doubt that at least 50% will belong to the state. Therefore, there is a ground to understand that it is an attempt to sell the property quickly  before giving away 50%. Therefore, it is a sort of cheating the buying party. Canadian Ambassador met with us, enquiring what was our plan and hoped that the state would not take it away. We replied “no“. If there is a need to take it, then we will take it, but not in such a rude way. We will buy it. If it was our intention, Areva also must sell its licenses and escape. But that is not what is happening.  There were many issues that we left out. It was not clear who was digging and why he was digging. One could buy the licenses and also sell it. Even there are incidents when one has bought exploration license and wants to sell it by stating “hey, look, there is uranium, do you want to buy it“? We have to stop this. The state has to exercise the authority to determine the transfer and ownership of licenses. It should make everything in a systematic way. Previously, the licenses were given in free and underestimated manner. There is no legal environment to restrict it. We have to fill these loopholes. Licenses shall be given in a controlled way. We have to consider what is being done, what technology is being deployed and who is doing that. For example, a company with a deposit of USD10,000 in a bank account shall not own a license. After reviewing the draft law, foreign advisors commented that even prior releasing an exploration license to somebody we had to ask ourselves whether that person would qualify for mining license or not. Future shall be taken into account. When one is not thinking about the future, anybody is entitled to have a license. There was no such a legal environment. We are trying to create that legal environment by putting efforts from many angles. Although there are many companies working on uranium projects, what do you think about the professionals to work in the sector? We don’t have qualified personnel at the moment. We have some professionals, but not sufficient. We are sending Mongolians to study. We need people versed in investor’s technology, language and methodologies. We are discussing this possibility at the moment. Japan and France expressed their interests to train Mongolians. We signed an agreement with Russia to train no less than 15 people a year. Prime Minister Putin made a proposal to send another 30 students. Uranium reserve has not been finalized completely. What is your plan in this regard? Some portion of work to determine the reserve will be done by foreigners, by investors themselves. In some parts, we will hire foreigners. In some parts, we will do ourselves. It is important to make the determined reserve a reality. Energy companies are among the top 100 companies of the orbes magazine this year. Previously, the toppers were financial institutions. Is this showing a tendency that energy consumption will increase ever more? How do you see the contribution and participation of Mongolia in this top sector in the future? It solely depends on us, whether we work well and reliably at home. It depends on whether we combine scientific and technological findings and breakthroughs and whether there will be scientific ground in our work. If we do something fake, the success will evade. If the first power station makes an accident, Mongolia will be a country just producing earth. Therefore, from the very beginning we have to be very careful and assess each and every step. There is a lack of cooperation between our local institutions. If all domestic institutions cooperate and share a common concept and understanding, it is going to be one step closer to achieve certain results. We made a plan to become a country producing nuclear energy. This is a decision. It means we ourselves are going up into a higher level. It means we don’t sit idle watching foreigners mining. Let’s mine ourselves and actively participate in the progress. The state policy prohibits extracting the uranium in earth form. In other words, it will be processed at home. Furthermore, it shall be concentrated and we plan to produce fuel. This is an overwhelming aim. We are facing up a very high mountain in front of us. We shall climb to the mountain. In order to climb we have to put all our efforts under our control and collect what can be collected. In order to put all our strength we have to become one whole organism and start working hard. For that purposes state organizations, NGOs and private businesses shall have consolidated policies and tactics. And media shall also support our work. What is the price forecast of uranium? Uranium price dropped a little bit. It is forecasted that it will pick up from next year. And there will be an uninterrupted growth. However, it will not see any abrupt increase. The state policy states that a company with the best technology can be allowed to work in Mongolia. When Russia, Japan and Mongolia are cooperating it doesn’t mean somebody else will start digging. A resolution compatible with the state policy will be made and operator shall be selected. The one who is experienced, resourceful and has the best technology to process will be hired. Would you agree with a notion that uranium is more beneficial for future of Mongolia than copper and gold?  I can’t say it for Mongolia. However, if we talk about the whole world, I agree.