Mongolian mining still in infancy

Mongolia is a vast highland country, land-locked between Russia to the north and China to the south. The breakup of the Soviet Union in 1989 ended some 70 years of influence over Mongolia, which has emerged as a fully democratic country with a free market economy.

With a population of just 2.3 million, the country measures nearly 2,400 km from east to west, and 1,250 km from north to south. Almost one-quarter of Mongolia’s citizens live in the capital city of Ulaanbaatar, and nearly half of the country’s population is under the age of eighteen.

The country is largely homogeneous in terms of ethnicity, religion and language. Buddhism is the main religion, and Mongolian is the official national language.

During the past 50 years, mineral exploration was carried out with the assistance of Soviet and Eastern European expertise. Geological mapping, geochemical sampling and geophysical surveys over portions of the country generated a database of more than 500 deposits and 6,000 mineral occurrences of 80 different mineral commodities.

Mining is dominated by large-scale development of coal, copper, fluorite and molybdenum. Gold production, which is centred mainly on placer operations, has surged in recent years, rising from just over 1.1 tonnes in 1993 to 4.5 tonnes in 1995.

Of the nearly 200 mines in operation, most are either owned outright by the Mongolian state or are joint ventures between the Mongolian and Russian states.

The Erdenet copper-Molybdenum mine is viewed as the country’s most significant producer.

Situated 440 km northwest of Ulaanbaatar, the open-pit project is operated by Erdenet Corp., a 51-49 joint venture between the Mongolian and Russian governments, respectively.

In 1996, the partnership earned US$58.3 million on revenue of US$190.8 million, compared with US$114.1 million on US$268.1 million in the previous year.

Production in 1996 amounted to 123,039 tonnes of copper concentrate and 21,193 tonnes of copper cathode, plus 2,201 tonnes of moly concentrate, as well as byproducts of gold, silver, selenium, tellurium and tungsten. The concentrate is transported by rail to Russia for smelting and refining.

Erdenet is estimated to contain reserves exceeding 900 million tonnes grading 0.8% copper and 0.018% moly.