Uranium Industry Development of Mongolia Update

Last Sunday, RIA News, a Russian news agency, informed that Mongolia will cooperate with only Russia on uranium development. The news said that the Russian Government presented to the State Duma, the lower house of the Russian parliament, the inter-governmental agreement on establishment of “Dornod Uranium” (Oriental Uranium) Company.

The agreement was signed by Mr. Sergey Kirilyenko, Director of RosAtom Coproration, a state owned company of Russia, and Mr. S.Enkhbat, Head of the Nuclear Energy Authority of Mongolia, on August 29 2010. Mongolia has never signed any agreement on uranium with any country in the world. According to the agreement, JVC will mine 2,000 tons of uranium annually.

The mine will be owned by “Atomredmetzoloto” from the Russian side and MonAtom LLC from the Mongolian side, equally, reported RIA News agency.

Analytics say that this urgency from the Russian side was fueled by the recent development of legal action of Khan Resources on the suspension of its several licenses by the Nuclear Energy Authority of Mongolia at Ulaanbaatar City Administrative Court of Mongolia. Khan Resources won its case at Ulaanbaatar City Court, but the Authority informed that it will continue to the Supreme Court.

Dornod Uranium Company hasn’t established until now even though MOU over the cooperation as signed by Presidents of two countries.

Khan Resources owns 58% of “Tuv Asiin Uran” (Central Asian Uranium) Company, an owner of one of the Dornod uranium mines, but “Atomredmetzoloto” also owns certain share at this company. According to the Nuclear Energy Law of Mongolia, the Mongolian state is entitled to own minimum 51% of the strategic deposits of uranium.

Earlier, “Atomredmetzoloto offered $33 million to Khan Resources for the control package of the company and even CNNC, the Chinese state company in charge of nuclear energy development, offered bid of proposal to buy its share. These offers surely made turbulence in the share price of Khan Resources and business-mongolia.com considers such disclosures and information as a tool to “buzz” share price until the final decision will be made.