Russia and Mongolia on Tuesday signed a deal to form a joint venture to
exploit the Dornod uranium deposit in the resource-rich former Soviet
satellite state.
The deal comes at a sensitive time for foreign companies
operating in Mongolia as Ulan Bator, seeking to assert greater control
over its vast mineral deposits, has temporarily suspended mining
licenses.
The agreement between Russia's state-owned nuclear energy
giant Rosatom and Mongolia's Mon-Atom is also potentially controversial
as a Canadian company, Khan Resources Inc. (KRI.T), still has a 58%
stake in the license to the Dornod area.
Rosatom chief Sergei Kiriyenko said it marked the first time
Mongolia has agreed to create a joint venture with a foreign company to
mine and process uranium.
"Russia will be the first. It's an important political signal," Kiriyenko told reporters.
Under the deal, Atomredmetzoloto, a unit of Rosatom, and
Mon-Atom will create a 50-50 joint venture that should be launched by
year's end, he said.
The deal so far only covers the Dornod deposit, but could cover another area in the future, Kiriyenko added.
He declined to give an exact figure for the deal, but said Russia would invest "hundreds of millions" of dollars.
The deal was signed in the presence of visiting Russian
President Dmitry Medvedev, who arrived in Ulan Bator on Tuesday, and
his Mongolian counterpart Tsakhiagiin Elbegdorj.
Kiriyenko estimated uranium reserves at the Dornod deposit
to be around 28,000 tons, but said those could be "significantly"
increased through further exploration.
The Rosatom chief also said Moscow wasn't against other
countries cooperating with the new venture, suggesting Japan could join
in the future.
"We don't lay claim to monopolizing all mining, but the Dornod deposit is of interest to us," he said.
Japan and Russia signed a nuclear energy agreement in May.
Kiriyenko said at the time that it could open the door to joint uranium
mining in third countries, such as Mongolia.
The Dornod deposit is located just 200 kilometers from Russia's largest uranium enterprise, Priargunsky, across the border.
Kiriyenko called Tuesday's agreement "the last missing link in order to start our economic activity" in Mongolia.