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Special edition of Mongolian Mining Week 2023

Welcome to the special edition! Today, we are wrapping up the biggest mining forum in Mongolia. Let’s travel through the 5 days of Mongolian Mining Week 2023.

Robert Friedland is BACK!

The mining billionaire Robert Friedland, who first discovered Oyu tolgoi deposit, brought it to the global market, and brought Rio Tinto to Mongolia, gave a speech on the first day of "7 Days of Mining". What did he say?

The world is turning fast

Time passes quickly. It's been 58 years since the Japanese bullet train, right? As the world develops and the world warms, the backwardness of the global energy system is felt strongly. We humans have mined 700 million tons of copper so far. And, in the next 22 years, we need to mine the same amount of copper. In addition, by 2035, the demand for copper will increase by 82%. To meet this huge demand, the world needs 20 mines like Oyu tolgoi.

Gobi has a lot to offer

It is stupid that there is no exploration in Gobi at a time when copper is in Mongolia and copper is used worldwide. Mongolians have discovered only one-thousandth of their mineral wealth. The Gobi should be explored extensively and seriously. If you start exploration now, you will open the field in 5-10 years, and your children, grandchildren, and great-grandchildren will benefit from it in 20 years. Yes, it takes a lot of time and money to build a mine and get the benefits from it. That is why foreign investment is so important.

Love your next foreign investor!

While discussing how to manage foreign investment in Mongolia for 10 years, we got frustrated and built a copper mine in Africa. Oyu tolgoi was about to go 10 years faster. This is a lost 10 years for Mongolia. Now, a new competitor for copper has emerged in Africa, Mongolians.

So, be friendly to your foreign investors by creating a stable environment. Then, they will make Mongolia as rich as the next Kuwait. The technology and skills imported by companies like Rio Tinto are priceless.

All kinds of fossil fuels

The forum’s day 3 was all about the coal and oil sector.

In the opening speech of Mongolian parliament speaker Zandanshatar. G said that, within the framework of the New Revival policy, mining income will be increased by 3-4 times in the future.

Also, last June, the Law on Mining Products Exchange came into force, within 4 months $885 million worth of products and 7 million tons of coal were traded. Currently, coal and iron concentrates are traded on the exchange, yet in the future, fluoride and copper concentrates will be traded as well.

Coal: Coal export is the main component of Mongolia's state budget. Coal export is expected to exceed 50 million tons this year. Next year, Mongolia has set a goal of exporting 60 million tons of coal.

  • Michel Manuk, Director General of the World Coal Association, said coal is a promising industry for the next 10 years and beyond. In general, it is clear that the demand for coking coal will be high because metallurgical and steel production is expected to expand globally. Also, It is possible for Mongolia to increase its position in the global coal market.

Oil: The Mongolian government is building an oil refinery, which is expected to be operational by 2025. However, in the first 7 months of this year, $1.1 billion was spent on imported oil, highlighting the country's continued reliance on foreign fuel

  • During the forum, the possibility of intensifying oil exploration was discussed as a potential way to reduce Mongolia's dependence on imports.

Oyu Tolgoi introduced a new strategy.

On day 4 of the event, Oyu Tolgoi's CEO Deirde Lingenfelder introduced the brand new strategy of Oyu Tolgoi.

Oyu Tolgoi’s ambition

Oyu Tolgoi’s, one of the world's largest copper-gold mines, new strategy focuses on people, partnership, earth, and profit. The new strategy is aligned with the company's ambition to become the 4th largest copper mine in the world.

The timing was just right

It has been 10 years since Oyu Tolgoi’s first operation in Mongolia. According to the interview ​Deirdré Lingenfelder gave Lemon Press, the company needs to map the next 10 years to help them shift from a surface mine to an integrated copper business.

Is it a possible goal to achieve?

Last March, the Oyu Tolgoi underground mine officially commenced. Consequently, they are expected to produce an average of 500,000 tonnes of copper per year from 2028 to 2036. That is enough to produce approximately 6 million electric cars or 60 large wind farms.

The 4 strategic priorities

  • People: Oyu Tolgoi aims to be the best employer in Mongolia, with employee satisfaction of 80%-100% and 50% of employees being women in the long term.

  • Partnership: The company aims to be a partner in development, strengthening its supplier network and supporting domestic enterprises. It has also approved a strategic plan for the development of Hanbogd Sum, investing $50 million by 2027.

  • Earth: Oyu Tolgoi is committed to protecting the environment with an ambitious goal of zero greenhouse gas emissions and dilution by 2050. It has also restored 398 hectares of land in Yalbag, Selenge province.

  • Profit: Lastly, Oyu Tolgoi aims to create sustainable value by selling up to 5% of its total production to new markets by 2030.

Mongolia and France to mine uranium.

Uranium was the highlight of the last day of Mining Week in Mongolia, coincidentally on the same day that Mongolian President Khurelsukh U. inked a $1.7 billion contract for uranium mining in Paris.

Why did France and Mongolia get involved? 

Well, uranium is a special material used to make electricity in nuclear power plants. So, the demand for uranium comes from countries with big nuclear power plants like the U.S., France, and China. Also, the price of uranium has gone up a lot in the past 5 years, now it's $69 for every pound. So, France wants to get uranium from Mongolia because France needs to diversify and secure supplies of raw materials.

  • The contract: Orano will operate the Zövch-Ovoo mine in Mongolia's Gobi desert. They plan to start building it next year and begin mining in 2028. This means in the future, Orano's project will make up about 4% of all the uranium in the world.

  • But, here's the thing: The uranium project has 3 parts - getting ready, making uranium, and rehabilating. This whole project will last for 47 years. They will finish getting ready from 2024 to 2027, make uranium from 2028 to 2060, and then rehabilitate from 2061 to 2070.

What's for Mongolia?
The deal with France states that Mongolia will not have any share or will only receive royalty up to 19%. Specifically, the royalty's income from the uranium project is estimated to be $47 million per year.

Either way, Mongolia will soon be a big supplier of uranium. Now it is necessary to move forward with the project and speed up the next contracts.

⭐ TOP NEWS

  • Green: Mongolia helps bring Nepal’s Inclusive Green Finance ambitions to life (AFI)

  • Partnership: U.S.–Mongolia CPC Partnership 3rd Annual Bilateral Dialogue (U.S.EmbassyinMongolia)

  • Ecology: Chinese experience helps ecological restoration efforts in Mongolia (CGTN)

  • Culture: Pioneering the coffee culture in Mongolia (EBRD)

  • Export: Investing in China’s Multi-Billion-Dollar Pet Industry – Mongolia’s Opportunity to Shine (China Briefing)

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Editor: E.Zolbayar
Writer: M.Khulan & Skh.Angirmaa & G.Aminaa

Disclaimer: The information Inside Mongolia provides is for educational and informational purposes only. It is not intended to be and does not constitute financial advice, trading advice, or any other advice. The decision whether to consider the information we provide is solely our readers' independent decision.