It was nearly three a long time in the past that French miners decamped to the southern Gobi Desert seeking hidden riches. By 2006, they discovered what they have been in search of: wealthy deposits of uranium lurking beneath the windswept sand dunes and rusting oil pumps. A collection of pilot initiatives and environmental and financial assessments adopted.
On Jan. 17, Mongolia’s first uranium mine, Zuuvch-Ovoo, was lastly green-lighted with the signing of a $1.6 billion joint funding settlement between its authorities and French majority state-owned vitality firm Orano. “Uranium manufacturing in Mongolia will contribute each to low-carbon electrical energy era and safety of provide for our clients,” mentioned Orano CEO Nicolas Maes in a statement.
The inking of that deal is each an financial boon for Mongolia and a welcome shot within the arm for the worldwide combat towards local weather change simply as returning U.S. President Donald Trump as soon as once more withdraws the world’s high economic system from the Paris Settlement. Whereas nuclear energy stays controversial in some quarters, it has only a quarter of the carbon footprint of even photo voltaic, prompting greater than 20 international locations at COP28 to name for a tripling of the world’s nuclear vitality capability by 2050.
The Orano deal can be important geopolitically, serving to democratic Mongolia to additional domesticate “third neighbor” hyperlinks past the 2 authoritarian goliaths on its borders, China and Russia. However given the landlocked nation of three.5 million is reliant on Beijing for 90% of commerce and Moscow for 90% of imported gasoline and petroleum, the take care of France—a key backer of Ukraine in its struggle with Russia—isn’t with out danger.
Tellingly, Mongolia hosted Russian President Vladimir Putin for a state go to in September, while controversially ignoring the Worldwide Legal Court docket warrant for his arrest over alleged struggle crimes. “It’s unlucky and damages our relationships with third neighbors and likewise our democratic picture,” Tsakhiagiin Elbegdorj, who served twice as Mongolian Prime Minister in addition to President from 2009 to 2017, tells TIME. “I’d have averted it and suggested [Putin] to not come.”
Apart from potential geopolitical blowback, Zuuvch-Ovoo can be a cautionary story given the delays which have blighted it. When TIME visited the site last March, 11 tons of yellow-cake uranium produced by an 2021-2022 feasibility examine have been nonetheless being saved inside dusty transport containers, since Orano hadn’t been granted an export license. Even now, it’ll take one other 4 years earlier than the mine will begin producing uranium, which is estimated at 2,750 tons yearly over its 30-year lifespan.
Mongolian Prime Minister Oyun-Erdene Luvsannamsrai is aware of solely too properly the deleterious price of delays. Regardless of profitable a majority in June’s general elections, he selected to forge a “grand coalition” with minority events. The purpose, he says, is to attempt to construct consensus on essential infrastructure and growth initiatives to forestall them turning into political footballs to be discarded and revived as one administration passes to the following. Nonetheless, critics fear bringing minority events into the bulk tent weakens legislative scrutiny.
On Tuesday, TIME spoke through Zoom with Oyun-Erdene in regards to the Orano deal, constructing relations past Russia and China, and boosting commerce regardless of the anticipated tariffs of Trump 2.0.
This interview has been edited for readability and size.
TIME: How important is the Orano funding settlement in your purpose of turning Mongolia into a serious participant on the worldwide uranium market?
Oyun-Erdene: The Orano settlement is essential as a result of Mongolia’s economic system is predicated on our mining sector. The negotiation course of with the French authorities took greater than 10 years. In fact, there have been some challenges associated to environmental points in addition to assembly some worldwide requirements, however … now Mongolia is among the area’s uranium producers. And I want to emphasize that it represents the second largest international direct funding from a 3rd neighbor nation to Mongolia.
How else are you strengthening Mongolia’s place within the world provide chain for essential minerals, particularly with regard to 3rd neighbors?
In fact, minerals are essential for Mongolia, as we now have considerable sources, particularly essential minerals. And in addition to the uranium undertaking, we’re additionally in collaboration with the German and South Korean governments on exploration initiatives for essential minerals. Sooner or later, we’re very eager to cooperate with different third neighbors and we’re very open to share knowledge about Mongolia’s deposits. The federal government of Mongolia is planning to attend the PDAC Conference, which is able to happen in Toronto, Canada, in March. At the moment, we can even have alternatives to speak with traders and share details about Mongolia’s mapping and deposits of essential minerals.
Mongolia is landlocked and uranium exports rely not solely in your authorities retaining good relations along with your two neighbours, Russia and China, but additionally France doing so. Are you frightened that this boon could find yourself turning into hostage to geopolitics?
Certainly, there have been some challenges up to now 10 years negotiating this settlement. In fact, as you’ve gotten talked about, geopolitical tensions and transport challenges have been the principle points and causes of this delay. However now we now have efficiently agreed on this funding framework settlement, and we estimate that we received’t have any transportation or logistic challenges. And I want to commend the French authorities on resolving this difficulty.
Putin visited Mongolia in September regardless of an Worldwide Legal Court docket warrant for his arrest over alleged struggle crimes. Does this imply your authorities now rejects the jurisdiction of the ICC, and what message ought to third neighbors take?
The world has modified very quick over the previous couple of years. However Mongolia’s place may be very agency that we’re a peace-loving nation, and we all the time stand for peace not struggle. So we imagine that each one conflicts and disputes and tensions ought to be resolved by way of negotiations and diplomatic talks. And we have been agency on this place, particularly through the COVID-19 pandemic, in addition to the Russia-Ukraine struggle.
The governments of Mongolia and the Russian Federation have had pleasant relations and historic ties since 1921. Each 5 years, the top of state of the Russian Federation pays a go to to Mongolia to have a good time the anniversary of our joint victory on the Khalkhin Gol battle. So we have been explaining this example to our companions, third neighbors, in addition to to the ICC, within the run as much as this anniversary, in addition to the challenges and the financial dependency that we now have relating to the Russian Federation. Additionally throughout and after the go to, our Ministry of International Affairs labored very intently with our companions and the ICC to supply this rationalization, and we do imagine that we now have made clear that we now have some challenges on this regard.
We’ve spoken earlier than about your efforts to fight corruption. In December, Orano agreed to pay a €4.8 million [$5 million] tremendous to settle a bribery investigation in relation to its mining operations in Mongolia. Is that this not a priority given your agency stance on corruption?
We’re conscious of the bribery case, and the federal government of Mongolia needs to be as clear and open as potential. So we now have overtly mentioned this difficulty throughout our Cupboard conferences and we’re additionally in talks overtly with our prosecutor’s workplace. However we don’t imagine that we now have to lose time as a result of this settlement is useful to each the federal government of Mongolia and the French authorities. So we imagine within the judicial course of. The judicial course of will go on individually, however the funding framework settlement will probably be applied as agreed.
Additionally, I participated within the One Water Summit in Saudi Arabia in December. I met with President Emmanuel Macron and mentioned this difficulty, and we had extreme talks on how the 2 sides can cooperate intently. So we’re assured that this bribery case will probably be solved in keeping with the legal guidelines and guidelines, and the funding settlement will proceed easily.
Mongolia not too long ago established a sovereign wealth fund. What steps have you ever taken to make sure investments meet worldwide ESG [environmental, social, governance] requirements?
Sure, Mongolia has accepted the legislation on the sovereign wealth fund, which has three funds: a financial savings fund, future heritage fund, and the event fund. As of December 2024, we now have amassed $1.3 billion, and this income will improve as these mining initiatives proceed efficiently. In our E-Mongolia digital platform we now have opened accounts for every citizen who will obtain revenues from mining initiatives [as part of the saving fund]. So when the [Orano] undertaking begins and revenues begin coming, individuals’s accounts will get cash from this undertaking [which they can spend in critical areas such as health care, education, and housing.] It’s essential that the Mongolian individuals can truly really feel and see the advantages of our pure sources.
The U.S. has a brand new President who has campaigned on elevating tariffs on many countries, together with a potential 60% tariff on Chinese language exports. Mongolia’s personal economic system may be very a lot depending on China, so are you frightened about this new time period of Trump and potential trickle down results on Mongolia’s economic system? In addition to the impact of tariffs on the broad world commerce panorama?
The Mongolia-U.S. relationship may be very strong. I’m additionally assured that the connection will probably be expanded as a result of President Trump personally is aware of about Mongolia. In 2019, throughout President Trump’s first administration, the Mongolia-U.S. relationship was elevated to a strategic partnership, and President Trump is definitely one of many few U.S. Presidents who’ve acquired our President for a go to. Additionally, President Trump’s household has paid a number of visits to Mongolia on private journeys to get acquainted with our nomadic life-style and delightful panorama. So I’m assured that in his second tenure, our relationship will deepen additional, as his administration understands the scenario and challenges of Mongolia and can prolong its assist for our parliamentary democracy.
Almost about China, in fact, we export our coking coal to the Folks’s Republic, and there is a matter that the value may lower due to the tariffs on electrical automobiles [owing to reduced demand for steel]. However we’re cooperating very intently with the Chinese language authorities on increasing our cooperation, particularly on exports. We’re working to determine a railway connecting agreement with China Power Group in order that we are able to export extra coking coal to China. So we do imagine that by growing exports of our coal, we’d not have any massive disadvantages by way of lack of financial revenues. Additionally, throughout my current go to to Abu Dhabi, I met with Eric Trump, and we had an alternate about potential results on Mongolia’s coking coal exports from this electrical car tax.
After final June’s election you entered a “grand coalition” with the [Mongolian] Democratic Occasion and HUN Occasion regardless that you had a parliamentary majority. Why was that, and are you glad with the outcomes?
Within the historical past of Mongolia, there have all the time been greater than 10 mega growth initiatives that have been mentioned however have been by no means truly realized. So this authorities has launched 14 mega growth initiatives that we purpose to implement inside our time period of workplace. And the [parliament] accepted a constitutional amendment [to expand the legislature and adopt a mixed electoral system]. So these have been all catalysts to type this coalition authorities, as a result of I noticed that Mongolia was too politicized. As a small child, I regarded ahead to my nation’s growth, and there have been some initiatives that individuals mentioned at the moment, however nonetheless no progress has been made due to political divisions.
As everyone knows, the world is getting very polarized, particularly with these wars, and the scenario may be very unpredictable. So we need to be prepared, and we need to stand for our basic values, which is essential for our financial stability and resilience going ahead. And in addition, I want to emphasize that this new authorities has seen a drastic change in Mongolian politics, as a result of now we now have representatives of 5 political events, and 70% are completely new MPs, and 25% are girls. So we now have truly turn into the chief by way of [female representation] in Asia. So the underside line is that consensus is essential on this parliament, on this authorities, and Mongolia.
Anti-government protests have flared up in current weeks in Ulaanbaatar. What’s the takeaway in your authorities?
One of many most important causes for these protests was the energy price liberalization that our authorities enacted not too long ago. In fact, this was a troublesome resolution for our residents, however it was essential as a result of prices weren’t mirrored by the value that we have been truly promoting vitality. And to advance our vitality initiatives, it is necessary for us to reform our vitality sector. In fact, there are numerous initiatives, particularly mega growth initiatives, ongoing, together with the Orano undertaking. Not everybody could be content material with the whole lot that is occurring.
There may be additionally a lot discontent among the many public relating to the judiciary system, as a result of there are nonetheless ongoing circumstances associated to the coal theft issue that occurred two years in the past, and likewise some points associated to the event financial institution, so the individuals have been asking about these processes. We met with representatives of the protesters to take heed to their calls for. That is a part of the democratic course of, and it is rather vital for us to know our individuals’s wants and to make info out there and clear to the general public.
