Parliament’s Standing Committee on Security and Foreign Policy asked the government to cancel 12 exploration’s licenses issued on uranium deposits in Bayandun, Gurvanzagal and Dashbalbar soums of Dornod Aimag.

Z.Enkhbold argues that licenses were unlawfully issued

Mineral Resources Authority had issued exploration and mining licenses on deposits whose reserves were already identified and were already being mined breaking of relevant clauses of the Minerals Law.

Parliament adopted a law on Atomic Energy for the purpose of coordinating and eliminating such illegal actions. The Nuclear Energy Agency must have control over actions of extraction and the use of radioactive materials in accordance with its own authority. However, the Standing Committee’s members considered that it was unlawful for companies such as Emeelt Mines LLC, Western Prospector Mongolia LLC and Adamas Mining LLC to be issued exploration licenses.

The then-Soviet Union’s geologists conducted geological prospects in the uranium deposits covering territories of three soums in Dornod Aimag from 1971 and discovered uranium three years later in 1974. As the then-Soviet and Mongolian governments concluded an agreement on exploiting the uranium deposit in the territory of Mongolia on December 23, 1981, 510.6 thousand tonnes of ore were extracted in 1988-1995.

Once a thriving mining town, Mardai is now ruined and vacant

A working group of the Standing Committee carried out an inspection to Mardai deposits last August 28, finding that infringement still exists. The standing committee recently made a conclusion for its elimination.

“Mongolia’s government established an agreement with Russia and conducted an extraction. Later, the deposit was used by Russia under a concession agreement. As the concession agreement term finished early in the 1990s, the deposit came under Mongolia’s authority. Issuing a license on the deposit where an extraction is being conducted is forbidden by law. Because, prior to companies taking the licenses later, the company conducts its exploration, bears its risk, and extracts.

However, it is perilous to issue an exploration license despite knowing what lies underground by ignoring law clauses. Therefore, the working group submitted its proposal to government to cancel licenses that were issued by breaking laws, give the licenses back to the State and hold officials responsible who broke the law,” said Z. Enkhbold, head of the standing committee’s working group.

Geological works, prospects and establishment of a mine in Gurvanbulag, Mardai Gol and Dornod deposits have currently taken USD 450.6 thousand. The standing committee believes that it should be considered while establishing a joint-invested company. To compare scientific studies on reserves at Gurvanbulag, Mardai Gol and Dornod deposits by Russian geologists with results of presentlyconducted drillings, it was noticed that the uranium content was lower and the reserve size was intentionally lowered in size as poor content ore was not included in the reserve in ore tangible boundary. Thus, the committee instructed the government to re-identify and re-evaluate reserves of the deposits, restore infrastructure of the mines and calculate expenses for creation. A 130 km railroad was in use for the deposit during the period of Russia’s extraction and was transferred to the Mongolian side free of charge. Over 100 km of the railroad was privatized to a private company. The committee expressed its position to invalidate the privatization.

The committee also proposed to re-check the volume of Canadian investment in Central Asia Uranium LLC, and take back a 237A license which is now on delay from this company in case of not having fulfilled its given duties.

In 1994, a license of 237A special permit on utilizing Dornod’s deposit was issued to Mongolia-Russia-America joint company ‘Central Asia Uranium’ LLC for 58 percent possession to Canada’s Khan Resources LLC; 21 percent to Russia’s Atomredmetzoloto LLC, and 21 percent to the Mongolian side. It is doubtful that Canada’s Khan Resources LLC has fulfilled its duties, which promised when it took 58 percent and the Government has not yet checked and made any certain conclusions.

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