Czechs to mine Mongolian uranium

Czechs to mine Mongolian uranium
17. srpna 2015 • 12:23
Next year, Czech firm Uranium Industry will begin mining uranium in Mongolia. Following three years of efforts, the firm was the only one picked from stiff global competition to be awarded a licence from the government in the capital city Ulaanbaatar.

Other bidders included Russian giant Rosatom, French firm Areva and China’s CNC. While these other firms can limit themselves to seeking out deposits of the precious element elsewhere, Uranium Industry will be able to immediately mine a site estimated to contain USD 500m worth of uranium

Uranium Industry is also negotiating for thee additional exploratory licences. Should the firm also be awarded these additional licences, it would have at its disposal deposits containing around 120,000 tonnes of uranium. Which is roughly the amount that the Czech Republic has extracted during its entire history of mining. “The competition cast aspersions on our company somewhat, but that gave us an even stronger starting point,” said Uranium Industry head Milan Klečka.

The deal was preceded by July’s purchasing of exploratory licences by Canadian mining firm Denison Mines worth USD 20m. “Uranium Industry is targeting uranium deposits in countries with which the Czech Republic possesses traditionally close ties,” said David Cates, head of Denison, whose firm withdrew from Mongolia following the Czech deal with the government.

According to the deal, the Czech Republic possesses first refusal rights on purchasing the extracted uranium. The company plans to first offer the uranium to ČEZ; should they decline, then the substance would be traded on commodity markets. “In such a case, interest would likely be expressed from India or China,” says Klečka.

According to Klečka, besides its years of experience, the Czech Republic was also assisted in its Mongolian bid thanks to the reputation of Czech state company Diamo and its experiences in re-cultivating exhausted mining sites.

Preparation work at the site is expected to begin next spring. The mine’s lifespan is expected to be 15 years, and should earn around USD 250m based on today’s market conditions. Presently, world uranium prices are at a ten-year low.

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