Source: www.asiaecon.org |
MONGOLIA'S URANIUM RESOURCES
As many countries throughout the world search for new energy sources, nuclear power plants have expanded dramatically around the world. Fueled by the recent spike in oil prices, almost all developed countries have been searching for another form of energy less volatile than today's fossil fuels. Because of the spike in current and planned nuclear power plants, uranium, the main source of fuel, has become in increasingly high demand.
As many countries throughout the world search for new energy sources, nuclear power plants have expanded dramatically around the world. Fueled by the recent spike in oil prices, almost all developed countries have been searching for another form of energy less volatile than today’s fossil fuels. Because of the spike in current and planned nuclear power plants, uranium, the main source of fuel, has become in increasingly high demand.
Mongolia has long been known to possess uranium, but it has not been until recently that extraction projects seemed feasible. Mongolian estimates have put the level of uranium at around 1.3 million tons. However, a study by the OECD Nuclear Energy Agency and the International Atomic Agency has said feasible uranium extraction is only around 46,000 tons. Countries such as Canada, the US, China and Russia have showed interest in mining the uranium.
Mongolia is a large, landlocked country that has the lowest density population in the world, but is rich in natural resources. The fact that Mongolia has been growing its mining sector has been a large reason the country has experienced rapid growth in the in the last 10 years. Traditionally, Mongolia’s economy was based on agriculture in a country with little arable land. Today about 35 percent of the country is below the GDP per capita is around $2,100. Mongolia is now looking towards its uranium resources to drastically improve the economic situation in the country.
The uranium mining industry is controlled mainly by Canada and Australia. Together they account for 44 percent of all uranium mining in the world. The only other countries with sizable contributions are Kazakhstan and Russia with 16 percent and 8 percent respectfully. According to estimates of 1.3 million tons, Mongolia has the 3rd largest reserve of uranium in the world, but zero is being extracted.
Perhaps due to its past diplomatic and economic ties, Russia has been the first country to approach Mongolia about its uranium. In 2008, Mongolia and Russia signed an agreement to cooperate in the production of uranium. The agreement comprises of a plan of joint actions whereby Russian specialists would assist in the uranium exploration, extraction and processing in Mongolia. In addition, Russia would help Mongolia construct its first nuclear power plant.
China, Mongolia’s number one trading partner, has also entered into uranium discussions. China Nuclear Energy Industry Corp last year entered into an agreement to explore and develop uranium resources in Mongolia with a Hong Kong-based property investment company.
Further contradicting the amount of uranium in Mongolia, a feasibility study by Canada has estimated that 25.3 million tons of uranium exist in the country. Khan Resources completed the study for the Dornod uranium project, which indicated that the asset could produce an average of 3-million pounds of uranium a year at a cost of $23.22 per pound. The mine is expected to cost about $333 million to build and could be completed within 36 months from the start of detailed engineering work. The study assumes a long-term uranium price of $65 per pound, and a throughput rate of 3,500 tons per day over a 15 year mine life.
Depending on which country has conducted the research, the discrepancies in the amount of uranium in Mongolia is disconcerting. However, the fact remains that an increasingly valuable resource lies within Mongolian borders and if Mongolia can capitalize on its resources effectively, the country will be in great economic shape for the upcoming decade.
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Source: www.asiaecon.org |