The uranium miner Orano Group signed a protocol agreement valued at approximately US$1.7 billion alongside the CEO of a Mongolian investment firm for the development and operation of a uranium mine in the Asian country.
The protocol was signed by Claude Imauven, Chairman of Orano’s Board of Directors and Erdenes Mongol LLC’s CEO Sanjaagiin Narantsogt at the Elysée Palace in Paris, France on Thursday. The signing ceremony was held in the presence of Emmanuel Macron, President of the French Republic and Mongolia’s President Ukhnaagiin Khürelsükh.
“I am very proud to sign this protocol today, which extends a relationship we have had with Mongolia for over 25 years. The signature marks a decisive step in this historic partnership,” said Imauven.
Orano is a company based in France that is owned by the French state, the country’s Alternative Energies and Atomic Energy Commission (CEA), Mitsubishi Heavy Industries Ltd (TYO: 7011) and Japan Nuclear Fuel Limited. Erdenes Mongol LLC is a state-owned Mongolian investment firm and major shareholder in a series of mining companies in its home country.
“This cooperation will enable us to develop the uranium sector in Mongolia while furthering the group’s strategy of diversifying its mining activities,” added Imauven.
Following the protocol signing, an investment agreement is expected to be finalized by the end of this year for the Zuuvch-Ovoo uranium project in Mongolia’s southwest. The project is being developed by Badrakh Energy, a joint venture between Orano and the Mongolian state-owned company Mon Atom — which is more than 50 per cent owned by Erdenes Mongol.
The Zuuvch-Ovoo deposit was discovered in 2010 prior to the joint venture receiving a series of mining licenses for it in 2015. Orano says it confirmed the project’s overall feasibility in 2021 and 2022 through pilot studies and the successful extraction of 10 metric tons of natural uranium concentrate.
The JV now aims to commence production at the site by 2028 and anticipates a 30-year mine life. The companies will also be cooperatively searching for lithium deposits in the country.
In recent days the price of uranium has risen to a value not seen since before the Fukushima disaster in 2011. Analysts have predicted that it could be valued at up to US$80 per pound by the end of this year.
Orano has been actively involved with exploration in Mongolia’s Gobi Desert since 1997.
Orano’s mining business generated $294.6 million in earnings before interest, taxes, depreciation and amortization during the first half of this year — a 27.3 per cent drop from 2022 which it partially attributes to inflation and lower production volumes in Kazakhstan.
At the end of June this year the company had a cash balance of $981.6 million.
Erdenes Mongol was founded in 2007 and is involved with the production of steel, uranium, methane, gas, silver and the development of different mineral deposits in Mongolia.