In Mongolia, Orano has just obtained a major agreement for the operation of a large uranium mine on the Dulaan Uul and Zuuvch-Ovoo deposits. After complex negotiations with the authorities of Ulaanbaatar, this 20-year concession, potentially extendable by ten years, marks a crucial step for the French company. Orano, present in the country for over two decades, plans an investment of 500 million dollars while maintaining an environmental commitment with an innovative extraction method. Mongolia, benefiting from more than 51% of the profits from this extraction, will become a promising player in the global uranium scene, enhancing the diversification of supplies of this strategic resource.
In December 2024, Orano finalized a preliminary agreement with the Mongolian government granting it a 20-year concession to operate a large uranium mine with the possibility of a ten-year extension. The goal is to produce about 2,500 tons per year, requiring an investment of 500 million dollars until the planned startup between 2028 and 2029. In return, more than 51% of the profits will go to Mongolia.
The construction of the mine will be managed by Badrakh Energy, a joint venture with MonAtom, where the Mongolian state’s stake has been reduced to 10% of preferred shares. In accordance with local law, Orano must also commit to employing 90% Mongolian workers.
Using an in situ recovery method, the operation is expected to have a reduced environmental impact. Mongolia, wishing to diversify its economic partners and undermine its dependence on Chinese and Russian influences, sees this project as a means to develop its uranium reserves.
Orano signs an agreement for a 20-year concession in Mongolia
Orano recently obtained a concession to operate a uranium mine in Mongolia for a period of 20 years, with a possible extension of an additional 10 years. This agreement follows a preliminary announcement in December 2024, marking a significant advancement for the company in the nuclear industry. Orano plans to produce about 2,500 tons of uranium per year as soon as the mine is operational. To achieve this ambitious goal, the company is planning an initial investment of 500 million dollars before the start of operations, projected between 2028 and 2029.
In order to ensure the feasibility of this large-scale project, the total operating costs of the mine will amount to 1.6 billion dollars, which will be fully borne by Orano. This strategic decision allows Orano to strengthen its position in the global uranium market while complying with local profit-sharing requirements. Indeed, according to Mongolian legislation, more than 51% of the profits will be redistributed to the Mongolian government, which includes various taxes and dividends.
Strategic partnership and shared benefits
Orano has chosen to collaborate with MonAtom, a Mongolian company, to form Badrakh Energy, a joint venture that will oversee the construction and operation of the mine. This strategic partnership strengthens the relationship between Orano and the Mongolian state, thereby ensuring an equitable distribution of the benefits generated by uranium extraction. Although Mongolia reduces its stake in the company to 10% of preferred shares, a substantial portion of the gains will be dedicated to local development.
In situ recovery technology and supply diversification
For this new operation, Orano will implement in situ recovery (ISR) technology, a method already tested in the country between 2021 and 2022. This innovative approach, which accounts for nearly half of the world’s uranium production, is valued for its reduced environmental impact compared to traditional open-pit mines. With this project, Orano seeks not only to maximize the efficient extraction of the resource but also to minimize its footprint on the local natural environment.
The current dynamic of supply diversification is crucial for Orano, especially following recent complications in Niger. Mongolia offers a new opportunity to ensure a continuous flow of natural uranium. This development strategy fuels the growing demand for nuclear fuel worldwide. Due to its geographical proximity, Mongolia allows Orano to effectively meet the energy needs of neighboring countries such as China, South Korea, and Japan, while strengthening its own production capabilities.
