T .BATMUNKH: ERDENET PLANT TO PROCESS A RECORD 40 MILLION TONS OF ORE

The Erdenet Mining Corporation, commonly known as the Erdenet Plant, is a cornerstone of Mongolia's mining industry, operating continuously for over 40 years. In a major milestone last year, its operational lifespan was extended by 30 years, paving the way for more than 70 years of future activity. In 2024, the plant mined 41 million tons of ore and processed 38.1 million tons-underscoring its growing capacity and strategic importance.

We spoke with T. Batmunkh, Chief Engineer of the Erdenet Corporation, to learn more about the corporation's current operations and future development plans.

Last year, a reputable Australian firm updated the reserve estimates for the Erdenet Mining Corporation and revised its feasibility study. The Mineral Resources Professional Council validated the updated reserves, ensuring the plant's continued operation for the foreseeable future. What plans are in place for the plant's future development and long-term operations?

The foundation for the Erdenet Plant's long- term operation lies in its ore reserves. Since 1972, the plant has revised its reserve estimates five times, with the most recent update completed in 2024. Until recently, there was public concern that the plant's resources were nearing depletion. However, since becoming a 100% state-owned enterprise in 2019, Erdenet has significantly ramped up its geological exploration efforts. To date, the plant has invested approximately $30 million in exploration activities aimed at extending its operational life and expanding its proven ore reserves.

In 2024, the most recent reserve update confirmed the discovery of 3.4 billion tons of ore. This figure was officially validated by the Mineral Resources Professional Council.

This year, we plan to increase our processing capacity to 40 million tons of ore annually-the highest in the plant's history. At this rate, our ore reserves are expected to sustain operations for the next 55 years, ensuring uninterrupted production at the Erdenet Plant until 2079.

To date, the Erdenet Plant has processed 1.1 billion tons of ore, exporting 6.8 million tons of copper and 195,900 tons of molybdenum. Looking ahead, the plant plans to increase its production capacity, aiming to enrich 11.3 million tons of copper ore and extract 538,200 tons of molybdenum.

Is there potential to further increase the ore reserves?

The potential for increasing reserves is clear. The main Erdenet deposit comprises several sites: Khujir, Mogoi, Tsagaan Chuluut, Erdenet Ovoo, Oyut, and Shand. Currently, mining operations are focused on two areas the northwestern section of Erdenet Ovoo and the central deposit. In addition to the newly confirmed reserves, detailed exploration has been carried out at the Oyut deposit over the past two years.

Reserves that are not yet officially confirmed but are currently being prepared for detailed study and approval by the Mineral Resources Professional Council could extend the plant's operational life by an additional 10 years. Furthermore, planned exploration activities in the Mogoi, Tsagaan Chuluut, and Khujir deposits indicate strong potential for further increases in the plant's ore reserves.

The Government's Action Plan outlines the establishment of an Industrial Technology Park (ITP) centered around the Erdenet Plant, focusing on copper smelting and enrichment. What progress has been made on this initiative so far?

A total of 1,217 hectares of land in Orkhonaimag have been allocated for special state use to develop the Industrial and Technological Park (ITP). As of now, infrastructure construction is actively underway. While Mongolia has previously attempted to establish ITPs. those efforts were ultimately unsuccessful. However, international experience shows that the success of such projects depends heavily on resolving infrastructure issues at the outset a lesson now being applied to this initiative.

Foreign companies interested in developing or investing in ITPs in Mongolia first look at whether essential infrastructure-such as roads, transportation, water and sewage systems, heating, and electricity-have been properly established.

The Erdenet Plant is aligning its efforts with international standards to establish a model Industrial and Technological Park in Mongolia. The first phase focuses on infrastructure development, with a total investment of $68 million. Of this, $4.2 million has been allocated for road construction, which is currently 44% complete.

The first phase of railway construction, with an investment of $4.5 million, is 87% complete. Additionally, $1.1 million has been allocated to fence and secure the outer boundaries of the Special Needs Land Protection Zone- designated for the ITP-and this project is now 92% complete.

A tender has been announced for the construction of a new electricity substation. with a total budget of $46.1 million. The contractor has been selected and is currently in the process of signing the contract Meanwhile, work on the water supply and sewage systems has already commenced. This project, with a $12 million investment, is currently 64% complete. The overall plan is to finish all infrastructure developments by the end of 2025.

What new plants are planned for construction within the framework of the Industrial Technology Park?

First, a feasibility study has been completed for a copper concentrate processing plant with the capacity to produce 124,000 tons of pure copper annually. Secondly, a molybdenum concentrate processing plant is planned. Additionally, there are plans to build a cable and wire manufacturing plant as well as a copper powder production facility. Furthermore, efforts are underway to create favorable conditions for small and medium- sized enterprises through private sector investment, alongside activities to clear land for the ITP.

Almost 100% of the cables used in Mongolia are imported. While the Erdmin Company produces some cables, its output satisfies only about 3-4% of the country's total demand. To address this gap, the Erdenet Plant has completed a feasibility study for an import-substituting plant, with an estimated investment of $51.7 million, to be constructed as part of the ITP.

The demand for copper concentrate and cathode copper is as high as that for critical minerals in the global market, while the need for copper powder is rapidly growing. High- tech industries worldwide increasingly rely on copper powder, driving up its demand. In response, the Erdenet Plant is planning to build a copper powder manufacturing facility and is currently conducting a feasibility study. The project is estimated to require approximately $10 million in funding.

Currently, three private companies operate in Mongolia producing cathode copper: Erdmin, Achit Ikht, and Zes Erdeniin Khuvi. As part of its medium-term development program, the Erdenet Plant plans to build a cathode copper facility that will utilize leaching technology.

The construction of this plant was initially included in the Government's Action Plan. However, following a meeting on April 30th, the Government issued a resolution to cancel the project. This decision was based on the principle that "the Erdenet Plant should not compete with private enterprises," in line with the government's policy to support the private sector.

Many projects have been initiated to transform Erdenet city and the Erdenet Plant into Mongolia's industrial center. What are your plans for import-substituting products and production?

We have set a goal to develop the machinery industry. When people hear "machinery," they often think of manufacturing cars, but that's not our focus. Instead, we will produce basic components and spare parts specifically for mining machinery and equipment.

The mining sector accounts for 95% of Mongolia's export earnings, yet 100% of key spare parts for the industry are currently imported. To address this, the Erdenet Plant's Repair and Mechanical facility has started producing import-substituting products. Initially, we will manufacture and supply mining equipment and spare parts to the domestic market. In the next phase, we plan to expand into assembling vehicles specifically designed for the mining industry.

Erdenet city is expected to become an industrial center in the future. To support this development, a National Training Center for Mining Personnel will be established based on the Erdenet Plant. This training, research, and production complex will be financed by the Erdenet Plant.

The foundation stone for the new tailings storage facility, designed to collect and store waste from the Erdenet Plant's enrichment process, was laid last year. It has been reported that the old tailings storage facility is nearing full capacity. Could you provide more information on this?

The tailings pond is nearing the end of its operational life. Over its 46-year history. Erdenet has processed 1.1 billion tons of ore, with approximately 98% of that material stored in the tailings pond. The remaining 2% is processed into copper and molybdenum concentrates for export. There is a saying that "miners are moving mountains," meaning the mountains that once stood here are now relocated to the tailings site.

The tailings storage facility currently stands at an elevation of 1,306 meters. It is expected to reach full capacity when it rises another 12 to 14 meters, approximately at 1,320 meters. This is projected to occur within the next 10 years.

Therefore, a new tailings storage facility is planned, and land has been acquired for this purpose. Following decisions by the Citizens' Representative Khurals of Orkhon and Bulgan aimags, 7,048 hectares of land were allocated for the construction of the new facility. Currently, a tender has been announced to develop a feasibility study and carry out other related construction works.