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26 August 2009
Russia and Mongolia Sign an Inter-Governmental Agreement Creating a Uranium Mining JV
On August 25 Sergei Kirienko, General Director of the State Atomic Energy Corporation Rosatom, and S. Enhbat, Head of Mongolian Nuclear Energy Agency, signed an inter-governmental agreement for establishment of Dornod Uranium Limited Liability Joint Venture.
Russian-Mongolian Dornod Uranium Limited Liability Joint Venture is established to mine uranium and associated mineral resources. The key activities of the company will be prospecting and mining uranium ores, transporting, processing and enriching the extracted mineral resources and selling the finished production; creating and operating uranium mining facilities and other industrial infrastructure in Mongolia; attracting investments and financing for the activities of the company in the territory of Mongolia; ensuring nuclear, radiation and ecological safety; carrying out reclamation activities in accordance with the Mongolian legislation and the international standards; executing auxiliary work. The company has been founded by Atomredmetzoloto (the Russian party) and Limited Liability Company MonAtom (the Mongolian party) on a parity basis. Third parties can have stakes in the company’s capital with the approval of the founders. All licenses and permissions required for the company’s operations will be granted by the Mongolian party in compliance with the Mongolian laws.
The agreement reads that the JV should be exempt from the taxes and other obligatory payments stipulated by the legislation of Mongolia in connection with recruitment of employees from the Russian Federation (until the JV is set to full capacity).
Background Information:
On November 14, 2000, the Governments of the Russian Federation and Mongolia signed an agreement for cooperation in the field of peaceful use of nuclear energy.
Mongolia is attractive for the Russian nuclear industry as a country having vast uranium resources. Over the recent years Russia and Mongolia have held intensive consultations on different levels so as to determine the possible scale and format of their cooperation in the field of prospecting, mining and processing of uranium and associated mineral resources in Mongolia.
The parties have decided to jointly develop the deposits of Dornod uranium district. These deposits have been selected as the pilot joint project since they are rich in explored uranium reserves and, as soon as the legislative basis for the project is ready, the parties will be able to get down to work promptly. This project will allow establishing a joint uranium mining venture with total reserves amounting to over 50,000 tons and the annual output of approximately 2,000 tons.
One of the key directions of the Russian-Mongolian cooperation is training of Mongolian specialists, particularly, personnel for the new joint venture. In May 2009 the parties signed the Memorandum allowing them to commence the actual training of Mongolian nuclear specialists. The first ten Mongolian specialists will join four Russian universities as early as in September 2009. Press Centre of the State Atomic Energy Corporation Rosatom
