Mining is the primary industry of the Mongolian economy and lets see what is expected to accomplish in 2010.
Oyu Tolgoi project will invest in construction, worth of $758 million
John Macken, the General Director of Ivanhoe Mines, reported that it adopted construction budget of $758 million.
Work in 2010 is planned to include:
- Resumption of the sinking of the 10-metre-diameter Shaft #2, which will be used to hoist ore to the surface from the deep, underground, copper-gold-rich Hugo Dummett Deposit.
- Construction of a 97-metre-tall (approximately 31 storeys), reinforced-concrete headframe for Shaft #2.
- Pouring the concrete foundation for the 100,000-tonne-per-day concentrator and deliveries of building materials for the concentrator and infrastructure.
- Installation of a 20-megawatt power station and 35-kilovolt distribution system.
- Initial earthworks for the open-pit mine at the Southern Oyu deposits.
- Continuation of lateral underground development off Shaft #1 at the Hugo Dummett Deposit.
- Construction of a 105-kilometre highway link to the Mongolia-China border, which will be fully paved by the time production begins.
- Construction of a regional airport, with a concrete runway to accommodate Boeing 737-sized aircraft.
Mongolia will become producer of crude oil
The vital step was achieved in the sector of oil industry of Mongolia. It will start producing crude oil rather than exploring it. Most of the Mongolian oil deposits are located in the border zone between Mongolia and China. Since it launched the first oil drilling in 1997, Mongolia produced over 30,000 crude oil and exported to China. Mongolia has issued oil and gas exploration licenses to foreign companies in 26 areas. 6-8 billion barrels of crude oil in over 22 deposits is explored. Alone, Tamsagbulag deposit in Dornod aimag has reserve of 1.65 billion tons. Also Zuunbayan deposit has reserve of 700 million tons. Production will start in these two deposits and processing factory is scheduled within three years. The first Mongolian oil company, “Magnai Trade” has established its oil subsidy and will kick off its operation in 2010.
State owned “Mongol Erdes” Company will be established
With purpose of fundraising in the mining sector, the Government of Mongolia will establish a state owned company “Mongol Erdes”, to cooperate with foreign and domestic companies based on its acquisition in the strategic deposits. In other word, “Mongol Erdes” LLC will be established on the profit from Erdenet and Oyu Tolgoi depsoits. The first 100% Mongolian Company will raise fund, allowing its shares to the Mongolian people. The company will be led by a reputable team of professionals from abroad, for the initial period.
“Dornod Uranium” needs $400 – 500 million
“Dornod Uranium” is established during the official visit of the Russian President Medvedev to Mongolia. The company is not officially established, because counterparts have different view towards the acquisition and investment commitment. According to the Nuclear Energy Law of Mongolia, Mongolia shall own 51%, but the Russians requests ownership of 50%.
Also $400 – 500 million is required to establish “Dornod Uranium”. Its investment commitment is under disagreement. However, the Ministry of Mineral Resources and Energy planned an ambitions plan to kick off research and study of building a nuclear power plant. 1,203 trillion MNT is planned for the construction of the plant. The Government developed a 12-year plan to uranium exploitation and development of nuclear science in Mongolia. Another 4,394 trillion MNT is required to implement policy on radioactive mineral and nuclear energy. According to the Government estimation, 1,17% of the total fund will be provided by the state budget, 98,11% from private sector and 0,71% from foreign loan and aid, respectively.