Эрдсийг эрдэнэст
Ирээдүйг өндөр хөгжилд
Mining The Resources
Minding the future


D. Oyunchimeg

Interview with Doctor of Physical Sciences N. Tegshbayar

The attention of the whole world is riveted on the mining of rare-earth elements, that are critical to high technology. However, all we seem to do is talk about the fact that our country is rich in rare-earth elements.

Rare earth elements are becoming an important raw material that is attracting a lot of attention around the world. But so far, the reserves of rare earth elements in our country have not been fully determined, and we cannot even conduct exploration. We are also not able to mine the explored deposits, and don’t know how to process the extracted materials. So there is a fear that Zoovch-Ovoo will stall because of politicization. I would like to emphasize that people from all sectors will be involved in the implementation of this project.

The economic situation in our country, especially investments, has become the subject of close attention. Perhaps the investment agreement with Badrakh Energy will be a major deal in the coming years. What do you think about this?

Uranium mining projects are strategically more important than gold and copper. Therefore, the extraction and export of identified resources will increase our country’s competitiveness. In particular, the fact that the project with French investments is implemented in Mongolia in the long term will create favorable conditions for attracting investments from other European countries. Therefore, implementation of the Zoovch-Ovoo project coincides with the peak of global demand. Our time is coming. In other words, the world will need 110 thousand tons of uranium by 2030. The world can supply only 70 thousand tons. So we should not miss the opportunity to capitalize on our land resources.

On the other hand, as a physicist, I see that if radioactive minerals are mined and we become the owners of uranium reserves, it would also be possible to apply peaceful nuclear energy technology and build small reactors. But economists have to look at cost, supply, and demand. France is one of the five member states of the UN Security Council. Our national security concept states that we will protect our independence and strengthen our security through diplomatic means. Mongolia depends on its two neighbors for energy. 80% of all energy is produced domestically, and 20% is imported. This means we are in a state of energy and economic dependence. Because of energy dependence, we cannot solve the problem of air pollution in the capital city. Air pollution poses enormous health risks.

These problems cannot be solved as long as we import energy. We will provide ourselves with energy if we start mining uranium. In other words, the country’s total energy needs will be fully met by the construction of a 300 MW nuclear power plant. If, on top of that, we can build another 200 or 300 MW nuclear power plant, we will totally become energy independent.

So we should not look at Zoovch-Ovoo only in terms of money. This project will give a positive signal on many things. If we implement the radioactive minerals project, it will be the basis for sustainable work in the field of rare earth elements. At a time when the world depends on rare earth elements, we cannot even mine uranium.

A working group has been established to develop an investment agreement for the Zoovch-Ovoo project, and the community expects negotiations to take place. Although this project is considered a mining project, it belongs to the Ministry of Education and Science.

The Nuclear Energy Commission of other countries is under the control of that country’s prime minister. Learning to prioritize this is the basis for our development. As a result of the radioactive mineral extraction project, international standards will be introduced. Moreover, the world demands high technology and standards for mining radioactive minerals. Therefore, at the expense of training national personnel in foreign countries, Mongolians should work at home and develop their own specialists with skills and experience.

hareholder of the Zoovch-Ovoo project is Mon-Atom, which promotes the policy of the Mongolian government. Therefore, the launch of this project is very important for national security. It is also developing Mongolia’s human resources while helping to reduce our energy dependence. Mongolia has two percent of the world’s proven reserves of nuclear energy. If we intensify exploration, by next year we have a chance to have five percent of the world’s proven uranium reserves.

People fear that the neutralization of chemicals generated by uranium mining will have a negative impact on the environment, people, and animals. However, experts say that the mining method involves precise measurements and strict control.

People know that if there is uranium underground, the water around it cannot be used for drinking. That is why such places are taken under special protection. They say that animals with two heads are born after being poisoned by radioactive substances. If this really happens, then people must also suffer, right? Indeed, people could feel the negative effects before the animals.

There are always groups that oppose any major project of strategic importance to the country. In addition, there are external factors that can weaken our country’s competitiveness. Since Mongolians have 76 small constituencies, politicians who “fight” each other in local areas appear as if they are a civil movement.

In fact, it must be scientifically established whether uranium mining has a negative impact on people or animals. Not everyone can perform such testing. To make a scientific diagnosis, you have to come to a veterinarian, take notes, and have the test done in a lab that meets the standards. If there was no such procedure, then all the information would be unreliable. Today everyone has become an expert and researcher in the digital environment. When people who don’t even know their animals, talk about them loudly and beat their chests, it’s a pathetic way to get public attention.

When a big project starts, some people always find an excuse to stall it. We should also think about how appropriate it is to keep on arguing about such matters when the winners and losers are clear. After all, 90% of Mongolia’s economy is supported by mining revenues. Most importantly, CSOs, who are supposed to protect the rights of local people, should monitor whether the law is being followed.

What will be the consequences of the operation of the Zoovch-Ovoo mine for the economy and security of our country?

Zoovch-Ovoo is one of the largest fields discovered in the Asia-Pacific region in the last half century. Moreover, it is one of the five largest in the world. It occupies a critical position because of its reserves and economic impact. Today the world uses 60,000 tons of uranium a year. In the future world consumption will grow, and as a result the supply will not keep up with demand. It is the law of the market that the price grows when demand increases without supply going up. Thus, the current cost of uranium is likely to double.

It is not inevitable that uranium mining will have a negative impact on health. Although radiation poses a risk, international and national standards must be adhered with. Uranium can be mined if the government’s policy on radioactive minerals and nuclear energy, the Law on Nuclear Energy, and radiation safety standards are followed.

Implementing a mining project is not easy. Industry experts, geologists and engineers say that although mining requires a large investment, sometimes it does not yield any results.

That’s right. It takes at least 10 years of exploration to open a mine. Another 10 years to start mining if reserves are identified. Another 10 years until production becomes profitable. In principle, after 30 years of investment and hard work, the company will finally make a profit. But for the country, the situation is different.

During these 30 years, from the time of exploration until the company starts to make a profit, the flow of money into the budget in the form of insurance, taxes and fees will never stop. Therefore, the person who stops or postpones any major project must understand that he is directly or indirectly cutting off the flow of money to the state budget. Therefore, it is necessary to investigate what interests are behind the people who oppose a large-scale national project and hold them accountable.

Some researchers and economists warn that foreign investment will fall to “zero” this year. It seems to me that instead of talking about attracting investment, we should focus on how to design and create the right system? If foreign investment stops, it’s like being in the “upside down pot” – nothing will stick (Mongolian proverb). Two years of the pandemic have made us realize what will happen if we get no investment. Of course, we have two perpetual neighbors. But the third neighbor policy must also be considered. That’s why politicians should not be on the working group to prepare the investment agreement for the Zoovch-Ovoo project. Of course, since this is a business, both sides should benefit from this project. And the mistakes made in the past should not be repeated.

In principle, any agreement to implement a mining project should be based on due diligence and integrity. To do this, the government should ask an internationally recognized consulting firm for help in negotiating the contract. However, I would like to say again that we should not look at this issue only in a political framework in to suit the electoral cycle