Nomadic Mongolia is rich in mineral resources. The country has a history of uranium mining which began with investment from the former Soviet Union. Currently, Mongolia’s uranium deposits are ranked in the top 10 largest resources in the world. During the Soviet era, Mongolia’s uranium reserves were estimated at 1.5 million tonnes. This must now be verified according to the JORC reporting code.
There are 13 uranium deposits in the country, namely: Dornod, Gurvanbulag, Ulaan, Nemer, Mardain River, Kharaat, Khairkhan, Gurvansaikhan, Ulziit, Dulaan-Uul, Zuuvch-Ovoo, Enger ar, and Dalt) and 192,000 tonnes of geological resources have been identified and registered in the State Reserve Fund.
At present, a total of six enterprises, four with foreign investments and two domestic enterprises, hold 12 special licenses for the exploration and exploitation of radioactive minerals. Those foreign investors are Badrakh Energy LLC (French), Gurvansaikhan LLC (Czech Republic), and; Hunboo LLC, and Xin Xin LLC (both from China).
A long-awaited deal
In January 2025, French company Orano Mining S.A.S. and the Mongolian Government signed an Investment Agreement to collaborate on a uranium mining project. This agreement represents the second major investment accord between Mongolia and its “third neighbour” country. The project will be implemented by the French-Mongolian joint venture Badrakh Energy and Orano Mining.
Laurent Saint-Martin, Minister Delegate for Foreign Trade and French Nationals Abroad, attached to the Minister for Europe and Foreign Affairs of France, said: “Zuuvch-Ovoo is one of the world’s 10 largest uranium deposits, and through the implementation of this agreement, Mongolia will emerge as a major player in the global uranium market. This agreement will contribute to French independence by securing our energy supply.”
Zuuvch-Ovoo is deposit where the ore is concentrated in one place and its structure is very interesting from a geological point of view, and is easy to mine. The project will produce 69,000 tonnes of uranium ore for the nuclear power sector. The deal is worth $1.6 bn. Mongolia will directly benefit from 51% of the project, one of the 14 mega projects being pursued by the Joint Government. The investment agreement is set for a duration of 20 years, with the possibility of a subsequent extension in accordance with the law, provided both parties are satisfied with the terms.
The Mongolian Government has negotiated with Orano a total of 18 times and has agreed on the terms in the economic and investment areas in advance. Specifically, the initial investment amount will be approximately $500m and is planned to be made within four years from the date of entry into force of the agreement.
Orano has been operating in Mongolia in exploration and mining since 1997, and began production trials of the Zuuvch-Ovoo deposit in July 2021. These trials were successfully completed in December 2022. At present, Badrakh Energy’s exploitation license covers three areas: Zuuvch-Ovoo, Dulaan-Uul, and Umnut, located in Dornogovi province. The Zuuvch-Ovoo uranium deposit was discovered by geologists from Kogegovi LLC.
Once developed and operational, the Zuuvch-Ovoo will be the 5th or 6th largest uranium mine in the world with an annual production capacity of some 2,500 tonnes. Once production begins, 1,600 workers will be needed, 100 km of power lines and 160 km of roads will be laid, and the Zuunbayan railway will also be expanded. Uranium from the Zuuvch-Ovoo project will be transported to China by rail and then delivered to France by sea. China will also receive a certain portion of the uranium from Zuuvch-Ovoo.
The investment
For the initial investment, it has been agreed that the financing of the project’s investment and operations will not be financed through loans, but will be financed through equity. If shareholder loans are not approved during the project period and an urgent need for loans arises, it will be decided by a shareholders’ meeting, and the shareholder loans granted to the project implementing company before the date of entry into force of the agreement will be transferred to the project implementing company’s equity.
The 34% state-owned common shares will be replaced with 10% preferred shares and a 5% special royalty, with the possibility of an incremental royalty of up to 9%. This arrangement is expected to generate an estimated $593m in dividends from preferred shares, $2bn in royalties, and a total of $5.2bn in revenue for the state and local budgets throughout the project.
Rather than directly using the financial calculations submitted by the investor, the Mongolian side will develop its own financial calculation model in accordance with the international FAST (Flexible, Appropriate, Structured and Transparent) standard based on the feasibility study, and after verification with the investor, Mongolia confirmed the conditions for receiving the majority of the benefits of the strategically important mineral deposits, or at least 51%, annually in the accumulated amount.
The agreement specifically mentions the income to be calculated as direct benefits for the Government and the investor, and if the direct benefit of the Mongolian side does not reach 51%, the investor and the project implementing company will be obliged to reimburse the Government for the additional benefit adjustment payment necessary to reach that target.
Under the Law of the National Wealth Fund of Mongolia, the project dividends will be directly credited to the savings accounts of Mongolian citizens within the Savings Fund. The project is anticipated to bring significant societal and economic benefits, including increased foreign investment, enhanced state and local budgets, job creation, technology transfer, and strengthened international cooperation.
New technologies will be introduced and a sulphuric acid plant will be established. The feasibility study also includes $2.4m for waste management and $96.2m for the sulphuric acid plant, which will have a daily production capacity of 700 tonnes and will be built starting in 2028. If Mongolia decides to produce and sell elemental sulphur domestically, the project’s implementing company will have the exclusive right to purchase it at a reasonable price.
In addition, the Investment agreement shows that the International Atomic Energy Agency will conduct research and monitoring every three years.
Marc Meleard, General Director of Badrakh Energy, noted: “According to our current plan, the main operation should begin by the end of 2028. Related development and construction works will begin in the second half of 2025. We have already started recruiting new staff.
It was also considered necessary to establish a city where 700 people would work and live in the first phase of the project. To this end, an international open tender will be announced, and a tender of $600m will be announced within the next two years.
Future prospects
From 2030 onward, existing mines will not be able to meet the full demand for nuclear fuel globally. So, the Orano group also plans to resume exploration campaigns in Mongolia to find new deposits and support additional production. The Mongolian Government’s 2024-2028 Action programme states that the Mongolian-French joint uranium project will be implemented along with a foundational study for constructing a nuclear power plant in Mongolia.
CEO of State-owned Mon-Atom LLC, D. Dalaijargal, also highlighted other measures designed to increase exploitation of Mongolia uranium reserves, saying: “Aside from France, we are actively expanding collaboration with the Czech Republic, China, Russia, and Kazakhstan. Notably, in partnership with the Czech Republic, we are preparing to develop three deposits in Dundgovi province, and one in Sukhbaatar province. This is set to be our next major project.”
He added: “For the last two years, Russia has been making offers to our country. The real manifestation of this is that the Russian company Rosatom opened a representative office in our country last year. We are talking about opening an exploration company this month”.
The latest industry development is that the 4th meeting of the Joint Working Group between the Department of Atomic Energy, Government of India and the Nuclear Energy Commission, Government of Mongolia was held on June 09, 2025.
According to the outcomes of this meeting, India will also explore opportunities for cooperation in the mining and export of uranium and rare earth elements in Mongolia. The parties agreed to actively cooperate in strengthening the capacity of the nuclear energy sector through short and long-term training programs in India.
Given current projections for growth in nuclear generation across conventional light water reactors and emerging technologies like SMRs and advanced reactors, it is clear that global uranium demand will also increase. In this scenario the uranium price, which has already soared over recent years, is anticipated to surge to even greater heights. If Mongolia could ultimately supply 2500 tonnes of uranium annually, that would account for just 3% of the total global uranium supply by 2030. However, although this is a relatively small volume in terms of the global market, this does represent further supply chain diversity and would also make a substantial financial contribution to the Mongolian economy by further developing its significant mineral resources.
