An article in the authoritative American publication The Diplomat suggests that Mongolia adopt Kazakhstan's experience in uranium mining. Find out why this experience could be critically important for Mongolia.
Mongolia aims to develop its critical mineral sector to diversify its mining activities, but this process is progressing slowly.
The economy of Mongolia has historically depended on natural resources. Despite having a diverse range of products in the mining sector, including copper, coal, and iron ore, recent emphasis has been placed on uranium and critical minerals. In the context of global competition for uranium and rare earth elements, which can provide strategic advantages, Mongolia's mining industry faces challenges.
The Mongolian government intends to utilize its resources not only to diversify mineral extraction but also to attract foreign investments, particularly in uranium mining, where it can learn from Kazakhstan.
According to forecasts from the World Nuclear Association, global nuclear energy consumption, for which uranium is a key component, is expected to increase by 30% by 2030 and may double by 2040. This growth is linked to countries actively combating climate change and investing in technologies such as artificial intelligence and data centers. However, uranium supplies are responding to these changes more slowly, raising concerns about its long-term availability.
Three countries—Australia, Kazakhstan, and Canada—lead the world in uranium reserves and production, while major consumers such as the USA, Russia, China, and France are actively seeking new reliable suppliers, including Mongolia.
According to the Mongolian Mineral Resources Authority, the country has identified about 190,000 tons of uranium reserves, which accounts for approximately 3% of the world's known reserves. Mongolia's reserves are comparable to those of China and the United States, and 13 uranium deposits have been discovered in the country, several of which are licensed to foreign companies.
Furthermore, the Mongolian government is encouraging both domestic and foreign geological exploration, and total uranium reserves are estimated to potentially reach 1.5 million tons.
Despite these promising figures, Mongolia faces difficulties in transitioning from reserves to sustainable large-scale uranium production.
The legislative framework for uranium mining was established in Mongolia in 2009 with the adoption of the State Policy on Nuclear Energy and the Law on Nuclear Energy.
This law operates in conjunction with the 2006 mining laws, and both local and foreign companies face regulatory and licensing challenges.
Since 2006, numerous amendments have been made to the legislation—more than ten to the Law on Nuclear Energy and several dozen to the Mining Law—creating a sense of instability.
Kazakhstan has chosen a more successful approach in this area, and Mongolia can learn from this.
KAZAKHSTAN AND SUCCESSES IN THE URANIUM SECTOR
During the early 1990s, the French state company Orano began its operations in both Mongolia and Kazakhstan, but these directions developed differently. In Kazakhstan, the joint venture KATCO, established by Orano and the national mining company Kazatomprom, successfully transitioned from exploration to production and began operations in 2006, having produced over 46,000 tons of uranium since then.
Today, Kazakhstan is the world leader in uranium production, accounting for over 40% of global output. Although the pace of uranium extraction in the country has slowed, consistent policy, technological advantages (especially in in-situ leaching), and recent legal reforms have allowed Kazakhstan to increase state participation to 90% in long-term contracts, strengthening its position as a reliable supplier.
Collaboration with Orano in Mongolia has not yielded quick results. The exploration and licensing process has taken over two decades. However, after high-profile diplomatic meetings in 2023 and 2024, Mongolia and Orano signed a major investment agreement worth approximately $1.6 billion for the development of the Zöevch-Ovoo deposit, with production planned to start in 2028. To date, Orano has invested about $250 million in pilot projects and initiatives to develop the local sector.
The Zöevch-Ovoo deposit is expected to contain about 90,000 tons of uranium, making it one of the largest undeveloped deposits in the world. When fully operational, the plant is expected to produce about 2,750 tons of uranium per year, which would account for approximately 4% of global production. This project is also seen as an important step towards restoring foreign investors' trust in the Mongolian mining sector.
However, local attitudes towards uranium mining in Mongolia are mixed. Public concerns are related to environmental and health aspects, such as the risk of radioactive exposure and water contamination. Reports of mutations in livestock have intensified protests. However, international experience shows that the level of radiation exposure during uranium mining is generally lower than in many medical procedures if necessary safety measures are followed.
The geological conditions in Mongolia are suitable for in-situ leaching, and authorities believe that this method could extract up to two-thirds of identified reserves. If in-situ leaching is effectively implemented, it could help address two major issues: protecting groundwater and land use for livestock grazing. The strategic partnership with Kazakhstan until 2024 provides an opportunity for knowledge transfer and the introduction of new methods.
THE MINING SECTOR OF MONGOLIA AND ITS SIGNIFICANCE
The mining industry of Mongolia, especially uranium and critical minerals, holds strategic importance for global partners seeking to ensure reliable supply chains. Mongolia can start with its neighboring countries.
Forecasts indicate that by 2030, China's demand for uranium will become a significant part of global consumption. Mongolia, which already exports coal and copper to China, can expand its export portfolio by adding uranium, leveraging its geographical position and existing trade infrastructure.
Russia is also actively involved in the global nuclear industry and has shown interest in closer cooperation with Mongolia. In 2023, the Russian corporation Rosatom signed a memorandum of understanding to explore the possibility of building a small nuclear power plant in Mongolia and opened an office in Ulaanbaatar. The new city of Kharkhorin could become the first in the country to host a nuclear power plant.
In addition to its neighbors, countries such as France, Canada, Japan, South Korea, the Czech Republic, the United Kingdom, and the USA are also showing interest in Mongolia's uranium sector.
In January 2026, Mongolia participated in the Critical Minerals Development Initiative organized by the USA, aiming to attract American investments. In 2025, the US Geological Survey included uranium in its list of critical minerals. A survey conducted by the Center for Strategic and International Studies showed that critical minerals will become the basis for Sino-American economic rivalry, and Mongolia will find itself at the center of this process.
Mongolia has its reasons for increasing attention to critical minerals. Given the global shift away from coal, the country needs to diversify its resource-dependent economy.
The government of Zandanshatar Gombojav has signed a new memorandum of understanding with four private mining companies, committing to transfer 60% of strategic profits from mining activities to the population through a new Sovereign Wealth Fund. Such measures, combined with effective governance and transparency, could lay the foundation for a mature mining sector in Mongolia and facilitate investment attraction. Stable uranium supplies could also contribute to the development of the national nuclear energy sector.
Responsible development of uranium deposits and critical minerals paves the way for sustainable growth, strengthens energy diplomacy, and allows Mongolia to restructure its resource supply chains, starting with neighbors in Northeast Asia.
author: Bolor Lkhaajav — a researcher specializing in Mongolia, China, Russia, Japan, East Asia, and America. She holds a master's degree in Asian-Pacific Studies from the University of San Francisco.
co-author: Anar Gankhuuyag — a senior analyst in the mining sector specializing in project performance management. His research interests include sustainable development and the integration of sustainability principles into project planning.
translation: MiddleAsianNews
source: The Diplomat
