“We no longer have any long-term plan to develop our mining sector” 

2020-04-17 11:46

Ya. Bat-Ireedui, who recently took over as President of the Geological Society of Mongolia, tells G. Iderkhangai that without intensive geological and exploration work, there might be no new mineral raw material production in a few years.

Please tell our readers a little about yourself.
I have been in the geological sector for 34 years and have worked in both the state and private sectors, as also in research organizations and foreign investment companies. I never left geology, even in the difficult years of transition to the market economy. After graduating in 1986 from the State University in Irkutsk in the then Soviet Union, I started my career as a specialist in the Institute of Geological and Mining Production and Research in what was then called the Geological and Mining Ministry. Here I did some Mongolia-related research under the guidance of Dr. J.Byambaa. Then I was a researcher with the Institute of Geology of the Academy of Sciences, and a specialist in charge of the Mongolia-related studies when the Mineral Resources Authority was founded. I am proud that I have worked closely with Mongolia’s best of the best scientists. 

 

Geology is a scientific discipline with a wide scope. I am one of the few in Mongolia who have studied geological development in the ancient or pre-Cambrian era.  For the last ten years, however, I have been focused on the prospecting and exploration aspects of geological work. 

There was a time when geological and exploration studies were at least 15-20 years ahead of actual mining production, but things have changed in recent years, with the state no longer spending money on detailed prospecting and exploration work. What do you think of this? 
Everyone understands that production can begin only if geological surveys are done 15-20 years beforehand. It was possible to put some deposits into economic circulation in the socialist days only because considerable amounts of money had been spent on geological and exploration activities with very clear goals. Our transition to the market economy granted much opportunity to foreign investors. In general, this was the right thing to do and we got some great results, but it cannot be denied that there were some negative results also.
As I said, quite a lot was achieved before 1990 with state funds. Even now, a certain amount of funding is provided by the state for carrying out preliminary geological surveys, but the money is really inadequate and there is no financial support at all for detailed prospecting and exploration. Without such investment there might be no new mineral raw material production in some years. 

 

During the years of socialism occurrences were found on the surface of the earth and mined out. That was the usual practice of that time. They were mostly combustible minerals, fluorspar and construction raw materials, as well as a few metal or mineral resources. The decision to put them into economic circulation was taken only if they were adjudged to be financially viable and only to meet the requirements of the country’s economy and the local community.  In those days there were no deposit except Erdenet whose output was exported.    

In 2019, the state spent MNT24.6 billion on conducting geological surveys or on efforts to increase mineral reserves. This is a little more than what had been spent the previous year, but still very much less than the MNT 800 billion of pension-backed loans that have been recently written off. 
 

Actually, the amount of money spent by the state is not even half of what is required for exploration work for only one deposit. It is crucial for the country’s interest that we carry out meaningful and intensive prospecting-exploration and detailed exploration work, so that large economically profitable deposits are discovered. That way, the MNT24 billion spent from the state budget is actually nothing; it keeps geological and exploration work alive only on paper. 
 

However, our Government has made some progress in geological mapping and general prospecting. The latter has helped identify many hundreds of mineralized points and occurrences which form geochemical zones. These are areas where the probability for exploring deposits is always high, though the lack of funding stands in the way. Let’s assume we have $100 for drilling. Now, in a lot of cases nothing will be found even if we drill up to 10,000 metres, so you can imagine how much money is required for exploration if we want a positive result.  Let us not forget that almost all the deposits and occurrences we have now were discovered near the surface. We cannot expect to find new deposits without conducting underground surveys. 

How effective would it be to use spatial and other sophisticated geophysical prospecting methods more widely? 
Some 10 to 15 years of work is required to discover one deposit, and the total cost would be at least $30 million-$50 million, though the expenses would vary from year to year depending on the work plan. Prospecting is a complex exercise and uses various methods. And it may all come to nothing. That risk of “failure” is inherent in any exploration project. 

I don’t see much merit in spatial and aero-mapping. The results are not worth the huge expenses. They have more gimmick value than scientific. 

What method do you favour for granting an exploration licence?    
I have said that there is no guarantee of success in exploration, so anybody investing in it has the right to expect the legal environment to be sustainable. Foreign investors might not care whether our laws are good or bad, but they want these to remain substantially unchanged during their work. Even if the investor considers a law to be bad, once he decides to take the risk, he would expect the goal posts to stay in place, and not be moved with every change of government. The harmful effects of the present Government decision to stop exploration work for a year will be felt only after several decades, but they would be felt without doubt. 

So you see uncertainty about future mining production…
 Yes.  Today, reserves of placer gold deposits are being exhausted and with no new exploration the discovery of hard-rock deposits has been put on hold. What will shore up our currency reserve? We no longer have any long-term plan to develop our mining sector and I think that all Mongolians know who are responsible for this. Geology and mining are the two sectors which should not be politicized, but exactly the opposite has been happening. 
 
There are those who say that what we have now is enough and there is no need to look for more deposits for Mongolia’s survival. Do you agree?
No. We must develop more and develop rapidly. We can raise our general standard of living only by developing our mining sector. Animal husbandry also has promise but it is too dependent on external factors like the weather. Survival should never be taken for granted. See what the Coronavirus has done to the world economy. Mongolia will also suffer from this. 

Geologists must be happy that a National Geological Service, an implementing agency, is to be established under the Ministry of Mining and Heavy Industry. Will this help in conducting geological surveys better, or in processing, analysing and storing data?  
Let us wait and see, but I don’t much like the name. Geological science is not “national”; it studies the whole world. Of course, it is a good decision to restore the geological service, but how exactly will it work? It will be a mistake if its work is to be defined by the Minerals Law. More appropriate would be to regulate its work according to the Law on the Subsoil. Otherwise, who knows whether it will exist under the next government? We are told that the Geology and Exploration Department of the Mineral Resources and Petroleum Authority, the Mineral Resources In formation Technology Centre, the Geological Survey Centre, and the Central Geological Laboratory will be part of it. That is good, and I hope that it would be led by someone who knows the sector well and has proven management expertise.  

What initiatives have you taken since being elected President of the Geological Society of Mongolia? 
It has only been two months, I have been involved in coordinating the work of the various associations in the sector and have established the Council of Mongolian Geological Associations, through which we will present our views to the government. It will be easier for the government also if the sector speaks in one voice. Our priority is to work together with the government to improve the legal environment of the sector. 

 

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