Badrakh Energy is a JV between Orano and the Mongolian state owned company Mon-Atom LLC. Could you introduce the company to our international audience?

Orano entered Mongolia in 1997, engaging in exploration for uranium, but it was in 2010 that we discovered the world-class Zuuvch Ovoo deposit, which has a reserve of 93,291 t. That same year, Orano performed the first pilot test for our in-situ recovery (ISR) technology. Previously, in 2002 we discovered Dulaan Uul deposit with 6,260 t of reserve. From 2021-2022, we completed the first full pilot test of our technology that goes all the way from extraction to final production. In total, Zuuvch Ovoo yielded 10 t of uranium out of the pilot test, proving the reliability of our ISR technology. 

Could you comment on the significance of the recent protocol between Orano and the Government of Mongolia for the development of the Zuuvch Ovoo project?

The investment agreement is intended to provide stability and certainty over the project lifetime to ensure the project stability and its profitability, also to be able to forecast with accuracy our tax obligations in the next 3, 10, or 15 years, given that Zuuvch Ovoo is predicted to stay in production for 33 years or more. Also, the agreement is necessary to settle the irregularities that we are currently subjected to by adhering to two different and inconsistent laws: the Mineral Law, and the Nuclear Energy Law. For instance, the government required higher royalties, which would mean a lower interest in the shares of the company, yet the Nuclear Energy Law stipulates at least 34% of shares must belong to the state. In the future, we expect the Minerals Law to be amended to mention that uranium mining will be governed by the Minerals Law only. 

Could you walk us through what would come next?

The target is to bring the project into production by 2028; we have already begun engineering design works and we will then need to secure permitting, before launching into construction and proceeding to all the road, electrical, piping, camp infrastructure, and acid plant. Training is also an important part of the workflow. We signed an MoU with the main university in the region and we allocated a budget to train both professors and students from various institutions to build capacity in the ISR (in-situ recovery). The initial investment of the project will be in the range of US$450 million, but the full CapEX for the lifetime of the project nears US$1.6 billion, fully covered by Orano. The first tranche would be enough to bring us to a Phase 1 production, which would then be ramped up throughout the following four years to reach the nominal capacity of 2,500 t/y production. 1,600 people will be working on the site, half of which are directly under Badrakh Energy and the other half as subcontractors.

What have been the most important aspects of your ESG strategy?

The proposed project has been well-received because we communicated in a simple yet detailed fashion. The drawback, if I may call it like this, of our technology, is that it is not visible like a standard open-pit operation may be, so the work we do cannot be noted from the outside.

As a uranium producer, we are in the decarbonization business, so our energy mix must also be consistent with decarbonization goals. We plan to co-generate 40% of our energy needs from the exothermic acid plant. For the remaining 60%, we can either draw from existing renewable energy, the Sainshand Wind Farm having the right capacity to meet our needs, but we would need to buy green certificates to offset emissions, or we could build our solar farm. Additionally, Badrakh Energy is was one of the first companies in Mongolia to sign the Responsible Mining Codex.

Do you have a final message?

Mongolia does not yet have a nuclear power plant, but the new business of uranium is an important step for the country because it brings new knowledge while serving a growing market, especially with many nuclear plants under construction in China. Nuclear power works in conjunction with renewables to feed a cleaner grid where neither solar nor wind can suffice.