Uranium War in Mongolia - УРАН БА ГЕОПОЛИТИКИЙН СОНИРХОЛ

УРАН БА ГЕОПОЛИТИКИЙН СОНИРХОЛ

Хуульч Шагдарын Үнэнтөгс

2009-05-12

Монгол Улс 2008 онд дэлхийн 112 оронтой худалдаа хийж, гадаад худалдааны бараа эргэлт 2007 оныхоос 44.1 хувиар өсч, импортын дүн экспортын дүнгээс 710.1 сая ам.доллараар давсан байна. Гэхдээ энэ тоон үзүүлэлтээс харахад нийт экспортын өсөлтөд эрдэс бүртээгдэхүүн болон алтны экспортын өсөлт голлон нөлөөлсөн байхад импортод мөн л адил эрдэс бүтээгдэхүүн, үндсэн ба төмөрлөг, түүгээр хийсэн бүтээгдэхүүн, машин механик тоног төхөөрөмжийн импортын өсөлт илүүтэй нөлөөлсөн байна. Үүнээс харахад хэрэглээний зах зээлийн бараг 80 шахам хувийг импортын бараа бүтээгдэхүүнээр хангадаг манайд өргөн хэрэглээний барааны эргэлт хэр буурч, түүнийгээ дагаад хэрэглэгчид тулгуурласан эдийн засгаа татан унагаж байна. Хямралаас үнэхээр түргэн гаръя гэж бодож байгаа бол жижиг дунд үйлдвэрүүдээ дэмжээд,

хямралтай байгаа энэ үед хөөсөрсөн эдийн засгаа механикаар буулгах гэж оролдох биш, харин ч Хятад шиг хөөсийг нь тэтгэх замаар хэрэглээг урамшуулах богино хугацааны тактикаар эдийн засгаа дэмжих стратеги үр дүнтэй байх байсан болов уу. Тухайлбал, 90-ээд оны эхэн үеийн Хироно сангийн лекцүүдээс эргэн харахад авах санаанууд их буй биз.

Дэлхийн банкнаас 2009 оны дөрөвдүгээр сард гаргасан дэлхийн эдийн засгийн тоймд Зүүн Азийн эдийн засгийн өсөлт 2007 онд 11.4, 2008 онд найман хувь хүрч байсан бол 2009 онд 5.3 хувь буюу 6.1 хувиар буурахаар тооцоолсон байна. Харин Дэлхийн банкнаас 2008 оны 12 дугаар сард хийсэн тоймдоо Монгол Улсын эдийн засгийн өсөлтийг 2009 онд 7.5 болохоор тооцоолж буйгаа зарлаж байсан. Гэтэл хэдхэн сарын дараа буюу энэ оны дөрөвдүгээр сард Монгол Улсын эдийн засгийн өсөлт нь бүр 2.7 хувь болох прогнозтой байгаа гэж зарлаж байна. Энэ нь өмнөх онуудын өсөлтөөс даруй 7.2 хувиар буурна гэсэн үзүүлэлт юм. Мөн хэдхэн сарын өмнө л Монгол Улсын Засгийн газраас 2009 онд ДНБ-ны бодит өсөлтийг 10,1 хувь хүргэх зорилт тавьж байсан. Гэтэл нөхцөл байдал богинохон хугацаанд маш хурдан өөрчлөгдөж байна. Иймээс хэт холыг харсан бодлого хэрэгжүүлж байна гээд бүр том алдах биш, тухайн нөхцөлд таарсан богино хугацааны тактик авч хэрэгжүүлэх нь зүйтэй юм.

2008 онд манай экспортын барааны гүйцэтгэлийн 64.6 хувь, импортын барааны гүйцэтгэлийн 38.3 хувийг БНХАУ эзэлж байна. Мөн 2008 онд зэсийн баяжмалын экспортыг 100 хувь, молибдений баяжмалын 51.3 хувь, боловсруулаагүй нефть бүтээгдэхүүний болон чулуун нүүрсний дийлэнх хэсгийг өмнөд хөрш рүү гаргасан байна. Үүнээс том эдийн засгийн хүрээнд авч үзвэл манайх өмнөд хөршийн бүх талийн түүхий эдийн хэрэгцээг хангагч стратегийн томоохон сонирхол бүхий бүс болон хувирч байгааг харж болно. Хураангуйлбал, дэлхийн шинэ хэт гүрэн болж буй Хятад улс хямралын дараагаас өөрийн ноёрхлоо бусдаас хамааралт бусаар тодорхойлох боломж бүрдэж, ашиг сонирхлоо гуравдагч этгээдээр хөндүүлэхгүй, эдийн засгийн зохиомол өсөлтөө тэтгэх үүднээс боловсруулах үйлдвэрлэл асар их хүрээтэй өсөх нь тодорхой байна. Манайхан ноос ноолуур, арьс шир гэх мэт малын гаралтай бүтээгдэхүүний экспортын тухайд ярьж, түүндээ ихээхэн ач холбогдол өгдөг байсан үеээс шал өөр нөхцөл байдал өмнө тулгарч байгааг ойлгох нь зүйтэй.

Геополитикийн хувьд Монгол Улс одоо дэлхийн нэгдүгээр дайны өмнөх үеийнх шиг хүчний шинэ хуваарилалтын асар эгзэгтэй үед тулж ирээд байна. Магадгүй манай улс төр, эдийн засгийн нөхцөл байдал биднээс хамаарахаа нэгэнт байсан байж болох бодит бус айдас бүрэлдчихсэн байж болзошгүй. Энэ нь хэн нэгнийг худалдагдсан гар хөл гэж хэлээгүй, хэн байхаас үл хамаараад гадаад хүчний хуваарилалт, тохиролцооноос шууд хамааралтай байдаг түүхэн цаг үеийн асуудлыг хэлж байгаа юм.

Монгол Улс Манай ашигт малтмалын хувьд хамгийн гол стратегийн бүтээгдэхүүн болох ураны нөөц бөгөөд дэлхийд гуравт орж байна. Магадгүй цаашаа тэргүүн байрын төлөө өрсөлдөхийг ч үгүйсгэх аргагүй бөгөөд энэ утгаараа геополитикийн асар том сонирхол бүхий бүс болж байна. Энэ үүднээсээ ч Олон улсын Атомын эрчим хүчний агентлагийн захирал Мохамед Эльбарадай манай улсад айлчилж байгаа биз. Мөн Монгол дахь ураны хамгийн том ордын хайгуулын лицензийг эзэмшдэг Канадын Western Prospector групп хувьцааныхаа бараг бүгдийг нь худалдахаар зарлаад, худалдан авагч тал нь манай урд хөршөөр тодроод байна. Мөн сонирхуулахад өнгөрөгч оноос “World Growth Mongolia” төсөл хэрэгжиж хэд хэдэн судалгаа хийсэн байсан. Хийгээд байгаа бодлогын зөвлөмж хэр чансаатай бол.

Түүнчлэн саяхан Стратегийн судалгааны хүрээлэнгийн хэсэг залуус болон Австри дахь элчин сайд Жаргалсайханы Энхсайханы шууд оролцоотойгоор “Төв, Зүүн Азийн аюулгүй байдлын орчны өнөө, хэтийн төлөв: Улаанбаатар-Шинэ Хельсинк” сэдэвт олон улсын эрдэм шинжилгээний бага хурлыг ГХЯ-нд зохион байгуулсан. Энэ нь хөндлөнгөөс харахад ердийн эрдэм шинжилгээний хурал юм шиг боловч цаад том агуулгаараа Шинэ Хельсинк гэх томьёоллыг дэвшүүлэн тавьснаар Монгол Улс гадаад бодлогодоо томоохон урхагтай үр дагавар бий болгож байгаагаа анзаарсан болов уу.

Түүнчлэн ОХУ-ын Засгийн газрын дарга В.В.Путин Японд айлчлах завсартаа Монголд өдрийн зоог бариад мордлоо. Гэхдээ энэ нь 2005 оны тавдугаар сард БНХАУ-ын Төрийн зөвлөлийн Ерөнхий сайдын дөрвөн орлогчийн нэг хатагтай У И-гийн Японд хийж байсан айлчлалаа гэнэт хаяж, Улаанбаатарт буугаад "Өөртөө тусалдаг хүнд бурхан тусалдаг" гэж хэлж байснаас шал өөр нөхцөл байдалд байсныг тэмлэглэх нь зүйтэй.

Манай улсад ирэхийн өмнө Японд гурав хоногийн айлчлал хийхдээ Владимир Путин Японы Ерөнхий сайд Таро Асотай цөмийн эрчим хүчний салбарт хамтран ажиллах гэрээг үзэглэсэн. Уг гэрээгээр оросууд цөмийн үйлдвэр байгуулахдаа Наран улсын ноу-хау, технологийг авч ашиглан, хариуд нь Японд цөмийн түлшээ ахиухан нийлүүлэх, уран баяжуулах хүчин чадавхаараа гар сунгах нөхцөл боломжийг бүрдүүлж, нэг үгээр хэлэхэд "харилцан ашигтай гэрээ" болохыг хоёр тал аль аль нь дүгнэж байгаа.

Гэтэл В.В.Путин Монголд "захиалсан" зоогоо барих явцдаа Монголын Засгийн газрын тохируулагч агентлаг Цөмийн энергийн газар, ОХУ-ын атомын энергийн улсын "Росатом" корпораци хоорондын санамж бичигт гарын үсэг зурж, уг асуудлыг цогцоор шийдвэрлэхээ баталгаажуулаа.

Эндээс хөндлөнгийн дүгнэлт хийхэд ОХУ-ын Японтой хийсэн цөмийн эрчим хүчний салбарт хамтран ажиллах гэрээний гол өгөгдэхүүн болох Японд "цөмийн түлшээ ахиухан нийлүүлэх, уран баяжуулах хүчин чадавхаараа гар сунгах" гэх болзолт нөхцөл нь хаана, хэнд байгаа вэ гэдгийг ойлгоход маш хялбар байна. Өөрөөр хэлбэл, Путин Таро Асотай хаанахын, хэний, аль хавьцаа булаастай ураны баяжмалаар хангах талаар том тохиролцоо хийчих вэ?

Аль тэртээх Оросын Хаант улс-Японы эзэнт улс хоорондох Орос-Японы дайнаас хойш тус хоёр улс удаа дараагийн ил, далд хэлэлцээрээр өөрийн нөлөөллийн хүрээгээ тогтоох, тохиролцохдоо Монголчуудын оролцоогүйгээр тухайн нутаг дэвсгэр дэх асуудлыг шийдээд л явж ирснийг түүх бэлхэнээ гэрчилдэг. Мөн ерээд оны эхээр Япончууд манайд Эзэн Чингис хааны онгон хаана байгааг олж өгч туслаж байна гээд бас нилээдгүй жил манай зүүн аймгуудын нутгаар асар нууцлал бүхий хайгуулыг П.Очирбат гуайг Ерөнхийлөгч байх үед билүү хийж байсан шүү.!

Иймээс л энэ муусайн Японуудыг нэг бүрчлэн сайн судлах, зангийн нь мэдэх судалгаатай байх хэрэгтэй гээд байсны учир минь тэр шүү дээ.

Энэ нь сүүлийн арав гаруй жил Япон манайхыг асар их тусалж, дэмжиж байсны учир нь ил болж байх шиг бөгөөд тэд Монгол дахь оросын нөлөөллийг нэгэнт хүлээн зөвшөөрч, түүнд нийцэх бодлогоо баримтлахаар шийдснээ илэрхийлж байгаа гэж хэт яаруу дүгнэж болох л юм... Тухайлбал, Японы Парламентийн Зөвлөхүүдийн танхимын гишүүн бөгөөд шинэчлэлийн клубын ахлагч Мацушито Шимпей Монголын эрдэс баялаг, тэр дундаа ураны нөөцийн талаарх судалгаа байгаа эсэх, хамтын ажиллагааг өргөжүүлэхэд нөхцөл байдлын болоод эдийн засаг, хүний нөөцийн хөгжил бэлэн эсэх талаар Японы Эдийн засаг, худалдаа, аж үйлдвэрийн сайд Никай Тошихиро болон Ашигт малтмал, эрчим хүчний худалдааны агентлагийн дарга Ишида, Худалдааны бодлогын газрын дарга Окада нарт асуулга тавьж, мэдээллийг нь 2008 оны 12 дугаар сарын 11-нд Парламентын хуралдаандаа сонссон гэдэг.

Тэрхүү өндөр ач холбогдол өгч байж хийсэн хуралдааны гол гаргалгаа нь Япон, Монгол орны харилцаа, хамтын ажиллагааг "ойрхон бөгөөд ойрхон" улс болгох, "газрын баялагийн дипломат харилцааг" хөгжүүлэх гэж маш тодорхой "хоржин" томьёолсон нь дөт замаар Монголын уранд хүрэх гарцаа оросоор дайруулж нээх нэг хувилбар байсан байж болох юм.

Мэдээж энэ хийсэн дүгнэлтээ баталгаажуулах ёстой. Тухайлбал, ОХУ-д цөмийн эрчим хүчээ хөгжүүлэх том төлөвлөгөө байгаа. Хуучин ЗХУ-ын үед цөмийн 32 блок барьсан байдаг бол ойрын хугацаанд ОХУ 28 том цөмийн блок нэмж барихаар төлөвлөөд, түүндээ асар их хөрөнгө, ураны баяжмал түүхий эдээр хангах шаардлага байгаа. Иймээс Японд илүүчлэх баяжмал хаанаас эх үүсвэртэй байх вэ?

Хамгийн сонирхолтой нь Монгол Улс урандаа түшиглэн ОХУ, Японтой хамтран ажиллахдаа "Шинэ Хельсинк" гэх нэрийн дор Монголын нутаг дэвсгэртээ үйлдвэр барихгүй, зөвхөн ураны баяжмал ухахад хамтрахаар шийдээд байгаа. Хачин хэрэг шүү.

Мөн саяхнаас хятадууд манайд улс төрийн айлчлал хийхдээ ОХУ-аас арай өөр тактик баримталдаг болж эхэлж байна. Тухайлбал, Монголд ОХУ-ын тэргүүд бүгд гурван сар гаруйхан хугацаанд шил шилээ дарж ирдэг болсон бол тэд Ерөнхийлөгчийн тангараг өргөхөөс эхлээд улс төрийн түвшинээ БНХАУ-ын Бүх Хятадын ардын хурлын Байнгын хорооны дэд дарга, Хянан шалгах хорооны дарга гэх мэт зиндааныхан айлчилж, айлчлалынхаа явцад хэт том асуудлууд шийдэх хөтөлбөр тусгагдаж, тэднийг манай Гадаад харилцааны сайд тосч авч, үдэж мордуулах жишээтэй... Түүнчлэн АНУ-ын Сенат Монгол Улсын талаарх баримтлах улс төрийн чухал баримт бичгийг баталсан.

Хэрэвээ зөв стратеги гаргаж чадвал өөр юу ч биш зөвхөн уранаар дамжин Монгол Улс маш богино хугацаанд үсрэнгүй хөгжих гарц байна.

Нөгөөтэйгүүр, Оюутолгой ордыг ашиглах хөрөнгө оруулалтын гэрээг цаад хөрөнгө оруулагчидтай биш зөвхөн Монголд л төлөөлөн ажиллах Айвенхоу Майнз Монголия Инк ХХК гэх субьекттэй Монгол Улсын Засгийн газар гэрээ байгуулж, түүнийг нь УИХ соёрхон батална гэдэг нь үнэндээ тухайн ордыг ашиглахад хөрөнгө оруулагч нь тогтвортой бишээр өөрчлөгдөхөд Монголын талаас хамааралгүй байхаар шийдвэрлэгдсэн гэсэн үг. Энэ нь хууль зүйн талаасаа маш их эрсдэлийг дагуулж болох бөгөөд үндэсний аюулгүй байдалд шууд сөргөөр нөлөөлнө. Магадгүй энэ нь Рио-гийн хувьцааны тодорхой хэсгийг эзэмшигчийн хийсэн тохирооноос хамаарч байж болох юм. Өөрөөр хэлбэл, Оюутолгойн орд ашиглалт, түүний цогцолбор ашиглалтад манай өмнөд хөрш ч юм уу, хэн нэг өөр субьектийг асар их үүрэгтэй байх боломж олголоо гэсэн утгатай. Мэдээж гэрээний эрхийн талаасаа лицензүүдийг эзэмшигч тал гэрээ байгуулах, бусад нь хувьцаа босгох замаар хамтын хөрөнгө оруулалт хийгдэж байгаа гэж тайлбарлах нь тэдний эрхийн асуудал. Гэхдээ гэрээний эрх чөлөөний талаас авч үзвэл гэрээ байгуулагч талуудын үүргийн гүйцэтгэлийг тодорхойлсон нь хэт тэгш бус байгаа юм.

 

Өмнөговь аймаг дахь Оюутолгой, Таван толгойг хоёуланг ашиглаад, тэдгээрийг хойд, урд хөршдөө хувааж өгч эзэмшүүлээд эхэлбэл тус бүс нутаг /монгол/ геополитикийн хувьд дэлхийн бөмбөрцөг дээрх маш халуун цэг болохыг үгүйсгэхгүйгээр барахгүй хэзээ ч тусгаар тогтнохын амт шимтийг хүртэхгүй, гадаад бодлогоо бие дааж явуулахгүй хэмжээнд хүртлээ доройтож магадгүй.Энэ бол бодитоор харагдаж буй хүчин зүйл бөгөөд эдийн засгийн чадавхиа сайжруулах гээд асар том үнэт зүйлээ золиосолж байж ч магад. Зөвхөн нэг өнцгөөс нь авч үзэж харин ч хүчний тэнцвэрийг өмнөд хэсэгтээ бодитоор бүрдүүлж байна гэж харах нь маш аюултай буруу алхам. Эхний стратегийн гэрээ байгуулахад хэр нэгдмэл цул, арга зүйтэй байхаас тусгаар тогтнол урвуу пропорциональ байна.

 

Харин үндэстэн дамнасан корпорацийн хувиар голлох хөрөнгө оруулагч субъектийн анх бүртгэгдсэн улстай нь болон хөрөнгө оруулагч талтай хамт олон талт гэрээ байгуулах нь манай өөрийн оролцооны хувийг нэмэгдүүлэхэд хүндрэл учрах ч стратегийн маш өргөн боломжийг нээх болно.

 

Эдийн засгийн ноёрхлоо тогтоосон цагт хэн улсын эзэн байх нь маргашгүй. Бүх зүйлийн хөдөлгөгч хүч мөнгө байсан, байсаар байх биз. Иймээс ойрын хэдэн жил аль хүчин, хэн тэргүүн байх нь хамаагүй улс төрийн хувьд тогтвортой, залгамж чанартай, улс орныхоо хожмын өдрийн төлөө эв нэгдлийн цул байж, геополитикийн уран дипломат маневр хийх боловсон хүчний сонголттой, мэдээлэл сайтай байх нь туйлын туйлаас чухал байна.

Uranium War in Mongolia

Mongolia-Forward, a United States based company, announced that it is negotiating uranium mining in Mongolia. The Mongolian counterpart is Badamdamdin Ragchaa (photo) chairman and CEO of Mon Atom, Mongolia’s State-owned uranium development company. In a proposed joint venture, the two companies wish to explore, mine and process uranium in Mongolia.

In accordance with the recently enacted Mongolian Nuclear Energy Law, MonAtom would take ownership of 51% of the project.

The original press release published first on May 21, and distributed on May 28, went virtually unnoticed by the Mongolian press. This press release is significant in the Mongolian foreign policy strategy, and is the latest Mongolian move in the uranium-war.

Chairman and CEO of Mongolia-Forward is Leo A. Giacometto (photo). Giacometto is a retired lieutenant colonel of the US army. He was a member of the Northwest Power Planning Council, serves on the board of advisers for Gemnet, a Mongolian-based international telecommunications company, and held several other political, private and public sector positions, in the US and in Mongolia. The most significant position was chief of staff to a United States senator where he helped bridge the gap between American and Mongolian foreign policy goals.

Third Neighbor

The announcement by the American company comes in the wake of the Mongolian foreign diplomacy's delicate balancing act of balancing between Russia and China.

Mongolia with a population of only 2.7 million is wedged between the two neighboring giants, Russia and China.

The Mongolia-Forward announcement introduces the USA as a "third neighbor" (in Mongolian geopolitical terminology) into the recent uranium-war going on in Mongolia.

Mongolia has a vast amount of natural resources. Mongolia holds uranium reserve estimated at 1.2 million tons, worth billions of dollars. China and Russia are in desperate need of uranium to fuel their existing and planed nuclear reactors to supply the increasing electricity demand by their ever-growing population and industry.

Mongolia's balancing act is an attempt to prevent the uranium sector from being dominated by either neighboring country, while ensuring the state gets a fair share of the revenues.

Dornod - Uranium War Zone

Khan bought the abandoned Russian owned property of Dornod uranium in Mongolia about a decade ago.
This did not stop T. Bayarbayasgalan, the head of licensing at the country's Nuclear Energy Agency ("NEA") from invalidating Khan's mining license 237A for the Dornod uranium property. The invalidation was based on infringements of Mongolian law, including the Mineral Law and the Law on Mineral Energy.

Bayarbayasgalan said: The Khan license was invalidated because it had violated many of our laws," he said, "In particular, Khan violated an article in the new Nuclear Energy Law which stipulates that a company needs the permission of Ulan Bator if it intends to transfer its shares".

Clause 7.1 of the Law on Nuclear Energy states clearly that approval of NEA is needed in case of: - "Selling, bestowing as gift, using as a collateral and otherwise transfer into ownership, possession and utilization by others more than 5 per cent of shares of the company"

The NEA statement to Khan stated: "We learned from the Internet that CNNC Inc offered to buy the share of Khan resources"

Khan Resources through its 58%-owned Mongolian joint venture subsidiary, Central Asian Uranium Company, LLC ("CAUC") has filed a formal claim in the Administrative Court in Mongolia challenging the legal basis for the notice received from the Mongolian Nuclear Energy Agency.

Uranium-War Casualties

Khan Resources, the Canadian based company, is the major "casualty" in the uranium-war.

The first to coin publicly the term "war" was Grant A. Edey (photo) who serves as Khan's Chairman of the Special Buy Out Committee. "We are right in the middle of a geopolitical war," said Grant Edey, the Khan company director, speaking to Reuters.

The Russians - ARMZ

Russia's entry into the Mongolian uranium sector, was announced during a visit by Russian president Dmitry Medvedev in August 2009.

In the Russian eyes it is in many ways a return to deposits originally developed by Russians, and abandoned when the Soviet Union collapsed.

Mardai township close to Dornod was built by the Soviets in the 1970s and was reported to house 10,000 Russian workers at the uranium mines with a very high standard of living and commerce. Mardai which was abandoned after the collapse of the Soviet union, is now in ruins. (photo).

The first move in the uranium-war was taken by the Russians in August 25, 2009 when an inter-governmental treaty between Mongolia and Russia was signed. The treaty stipulates the creation of a joint limited liability company, Dornod Uranium, through which the Dornod Uranium Property would be jointly developed by Mongolian and Russian interests.
The uranium agreement was signed by the Mongolian chief of Nuclear Energy Commission, Sodnom Enkhbat and the head of Rosatom Russian Nuclear Energy State Corporation, Sergey Kiriyenko, in the presence of the two state leaders, Russian president Dmitry Medvedev, and Mongolian president Elbergdorj. (photo).

In order to exercise the treaty, ARMZ Uranium (Atomredmetzoloto) was sent to the battlefield. ARMZ is the Russian company in charge of all post Soviet uranium mines. ARMZ made an unsolicited take over bid of Khan by offering on November 30, 2009 to acquire all of the outstanding common shares of Khan Resources for C$0.65 per Khan Share totaling about $33 million buyout offer.

This bid was regarded by Khan as a hostile takeover, and Khan neglected to cooperate, describing it as "inadequate, failing to recognize the full value of the company"

The Chinese - CNNC

China sent "China National Nuclear Corporation" ("CNNC") to take advantage of the delicate situation.
CNNC negotiated a friendly take over for a higher price of C$0.96 . Khan's directors recommended that shareholders take up the CNNC bid.
The offer was conditional upon the receipt of all necessary Chinese governmental and regulatory approvals.
The Russians pushed the Mongolians to make sure the bid is not approved by the Chinese authorities. Several Mongolian officials paid a visit to China.

CNNC was notified on 21 May 2010 by the Chinese National Energy Administration, that the offer had not been approved. A few days later CNNC declared that its cash offer to acquire all Khan's common shares would be allowed to expire at the scheduled expiry date on 25 May following its failure to obtain regulatory approval.

The Americans - Mongolia-Forward

Khan, failed to negotiate its way through the complex political challenges that face Mongolia, specifically the delicate Mongolian balancing act between Russia and China. Khan is therefore squeezed out of the Uranium game, paving the way for Mongolia Forward a US company to take over the role of the balancing "third neighbor".

http://www.openforum.mn/old//contents.php?coid=2311&cid=130
Sources:
NEA http://nea.gov.mn
ARMZ http://www.armz.ru/eng
KHAN http://www.khanresources.com
CNNC http://www.cnnc.com.cn/english/index.htm

Uranium in Mongolia

• Uranium was produced from the Dornod deposit in Mongolia by Russian interests to 1995.
• Mongolia has substantial known uranium resources and geological prospectivity for more.
• Since 2008 Russia has re-established its position in developing Mongolian uranium.

According to the 2009 Red Book, Mongolia has 49,000 tU in Reasonably Assured Resources plus Inferred Resources, to US$ 130/kg U.
The mining sector is Mongolia’s single largest industry, accounting for 55% of industrial output and more than 40% of export earnings. The new $4.5 billion Ivanhoe-RioTinto Oyu Tolgoi copper-gold project will boost this.
However, the country has been considered to have relatively high political risk associated with investment. One aspect of this was the existence of an eminent domain provision for strategic minerals which involved the possibility of claw-back at the discretion of the government, applied where new exploration covered areas which were previously explored or developed, such as Dornod and Gurvanbulag. Originally this was understood to involve compensation if it were invoked, but this provision was abolished in the July 2009 Nuclear Energy Law.
Coal provides 80% of its electricity (3 billiion kWh in 2009), from less than 1 GWe capacity, and 13% of electricity is imported from Russia. Air pollution is a major problem in Ulaan Baatar, from domestic combustion, cars, and power generation.

Background

Mongolia has a long history of uranium exploration commencing with joint Russian and Mongolian endeavours from 1950s involving investment of some US$ 200 million. Initial success was obtained in the Saddle Hills area of northeastern Mongolia (Dornod and Gurvanbulag regions) where uranium is present in volcanogenic sediments.

The main uranium prospect is the Dornod open cut mine and undergound orebody, with the surrounding area containing a number of deposits in the Dornod aimag (province) in the far northeast of the country. The main deposit was mined by the Erdes Mining Enterprise, a subsidiary of Priargunsky Industrial Mining & Chemical Union from 1988 to 1995. The ore was railed 400 km to Krasnokamensk in Siberia for treatment by Priargunsky. About 535 tU was produced, all from open pit mining.

Mardai township close to Dornod was built in the 1970s and was reported to house 10,000 Russian workers at the mine with a very high standard of living and commerce. It is now in ruins, also the railway north has been removed and the materials sold.
Atomredmetzoloto (ARMZ) says that Russia spent the equivalent of $600 million (in 2009 dollars) on uranium exploration and development in Mongolia to 1995.
In April 2008 Russia and Mongolia signed a high-level agreement to cooperate in identifying and developing Mongolia's uranium resources. This aimed to restore and consolidate Russia's involvement in Mongolia's uranium sector, notably Dornod. This was taken forward by further bilateral agreements in August 2009 and December 2010, and in Russian legislation signed into law in January 2011 ratifying establishment of the joint limited liability company Dornod Uran, 49% owned by ARMZ.
Legislation and government entities
Since 1956 the Joint Institute for Nuclear Research (JINR) at Dubna, near Moscow, has trained Mongolian scientists. A Nuclear Energy Commission was set up in the 1980s.
In 2008 the government established a new Ministry of Minerals and Energy. Then the Nuclear Energy Agency (NEA) was set up about the beginning of 2009 as a policy and regulatory body and government line agency directly accountable to the Prime Minister. In February 2009 the government set up MonAtom LLC to undertake uranium exploration and mining on behalf of the state, as well as pursuing nuclear energy proposals. It will hold the state's equity in uranium and nuclear ventures and so comes under the Nuclear Energy Agency and the State Property Committee. The Radiation Control Authority is a part of this Agency, along with MonAtom. The existing Mineral Resources Authority of Mongolia (MRAM) is expected to work closely with MonAtom and the Nuclear Energy Agency.
In mid July 2009, after consultation with the International Atomic Energy Agency, parliament passed a Nuclear Energy Law to regulate the exploration, development, and mining of uranium and give the state a greater degree of ownership and control of uranium resources. It included transitional provisions dealing with existing mining and exploration licences. The new Law gives the government the right to take ownership without payment of not less than 51% of the shares of a project or joint venture if the uranium mineralisation was discovered by state funded exploration, and not less than 34% if state funding was not used to find the mineralisation. It gives the State Administrative Authority the responsibility to implement and enforce state policy on the exploration and development of deposits of radioactive minerals and establishment of nuclear energy, including the power to grant, suspend or revoke any licences granted pursuant to the Nuclear Energy Law. Licences to conduct uranium exploration and production of any radioactive minerals must be obtained under this law.

Parliament also passed legislation regarding the re-registration of existing exploration and mining licences. Existing licence holders had to apply to the State Administrative Authority by 15 November 2009 and comply with all of the conditions and requirements set out in the Nuclear Energy Law, including acceptance of the state’s 34% or 51% share participation in the licence holder.

A new law on Radiation Protection and Safety was enacted in 2001, replacing 1977 and 1983 provisions.
Dornod

During the visit of the Mongolian Prime Minister to Russia in mid 2009, an agreement was signed between the Mongolian Nuclear Energy Agency and Russia's Rosatom corporation. This agreement envisaged creation of a joint venture company between MonAtom and ARMZ to develop two uranium projects in Mongolia in which Russia retains an historical stake: Dornod, and exploring East Gobi further south. Rosatom said that the new JV is of particular interest due to its proximity (350 km direct) to Priargunsky operations, allowing creation of a "single infrastructure". Russian aid is expected for railway upgrades throughout Mongolia.

The final intergovernmental agreement to set up the Dornod Uranium LLC joint venture was signed on 25 August 2009 and ratified by the Duma in 2010. In January 2010 an economic protocol related to this was signed. The joint venture is to be relieved from taxes and other compulsory payments imposed by Mongolian legislation, because Russian labour is to be used initially.

Meanwhile, Canada-based Khan Resources Inc. (KRI) had a 69% share in the Dornod project, mostly through a 58% subsidiary Central Asian Uranium Co. Ltd (CAUC), a Mongolian stock company set up by World Wide Minerals at the behest of the government in late 1990s. Russia's Priargunsky Mining & Chemical Enterprise (a subsidiary of ARMZ and Rosatom) and Monatom each owned 21% of CAUC, which claimed to have the only uranium mining licence in Mongolia. Khan's definitive feasibility study released in March 2009 showed that the project was sound, on the basis of 24,780 tU indicated resources (NI 43-101 compliant), including 20,340 tU probable reserves. Annual production of 1150 tU over 15 years was envisaged. After that various corporate arrangements were proposed involving Monatom and ARMZ, but when in February 2010 Khan recommended that its shareholders accept a full takeover by a Chinese government entity, Monatom and NEA proceeded to exclude Khan from any role with Dornod. This remains subject to legal appeals.

After suspending and then canceling Khan's licences, the NEA announced in August 2009 that Monatom would develop Dornod in a joint venture with ARMZ and possibly Japanese or Chinese partners, and would hold at least 51% of the new entity Dornod Uranium LLC.

In May 2010 Rosatom said that all disagreements related to the project had been settled and it awaited final signing of new joint venture agreements between ARMZ and Monatom, under the terms of this intergovernmental agreement. ARMZ looked forward to having access to 50,000 tonnes of uranium reserves from which it could produce about 2000 tU/yr. ARMZ estimated that launching the Dornod project would require more than US$ 200 million. The final agreement was signed in mid December 2010, between Rosatom and ARMZ as one party (49%) and Monatom and NEA (51%) as the other. The Mongolian prime minister said that the government decision on this project had been vexed, which relates to Rosatom's impatience with the delay in finalizing it.

The parties will contribute their stakes in existing Mongolian joint ventures into the new JV, as well as rights and other assets relative to their equity interests. Russia's JSC Priargunsky Industrial Mining & Chemical Union based just over the border at Krasnokamensk will be the operator for Dornod Uranium.

Plans are unclear but there is some expectation of 1000-1200 tU/yr from Dornod from about 2015.

In January 2011 Khan announced it was suing the Mongolian government "for its expropriatory and unlawful treatment of Khan in relation to the Dornod uranium deposit" and sought over US$200 million in compensation for losses and damages. See also Appendix.

Gurvanbulag

Gurvanbulag, about 30 km west of Dornod, had extensive underground development down to 560 metres in the Soviet era, and was readied for production. The Canada-based Western Prospector Group Ltd has had Gurvanbulag as the main focus of its Saddle Hills project since 2004. A recent NI 43-101 inferred resource figure based partly on Russian exploration to 1989 is 9000 tU. Western Prospector and its Mongolian subsidiary, Emeelt Mines, undertook a definitive feasibility study which showed that the project was barely economic, on the basis of 6900 tU reserves averaging 0.137%U. With radiometric sorting the head grade would be 0.152%U and the mine could produce 700 tU/yr for 9 years. Mine development cost would be about US$ 280 million. It is only 100 km from the Chinese border.

In mid 2008 KRI made a bid to take over the Western Prospector Group so as "to consolidate its position in the Saddle Hills district" but was outbid by Tinpo Holdings, who subsequently withdrew the offer due to political uncertainty. In March 2009 Western Prospector agreed to a US$ 25 million takeover by China's CNNC International, a 74% subsidiary of CNNC Overseas Uranium Holding Ltd and through it, of SinoU. In August 2009, the amalgamation with CNNC was complete and the company delisted in Canada.

In July 2009 MRAM suspended for three months all of the company's uranium exploration licences due to alleged violations of Mongolian laws. In October 2009 it said that CNNC's equity "would be decided soon", but it would evidently be less than 50%. This whole CNNC prospect now appears be dead, and ARMZ is positioned to take up Gurvanbulag.

Other deposits and interests

Canada's Denison Mines has a 70% interest in the Gurvan Saihan Joint Venture (GSJV), with Monatom 15% and a Russian partner Geologorazvedka 15%, and also holds some leases though its Mongolian affiliate International Uranium Mongolia XXK (IUM). GSJV has focused on defining ore which is amenable to ISL mining, and it holds interests in several Mongolian properties in Omnogovi (Soputh Gobi). In 2007 and 2011 NI 43-101 resource figures were published for some of these. Indicated resources are 7600 tU and inferred resources are 2200 tU for Hairhan/ Khairkhan, and 2400 tU for Haraat/ Kharaat, due west of Sainshand. Denison notes that the 2009 Nuclear Energy law has raised questions about the ownership and structure of GSJV.

Areva has been conducting exploration since 1996, lately through 100% subsidiary Areva Mongol LLC which holds extensive tenements in Dornogovi and also Sukhbaatar provinces (Sukhbaatar is between Dornogovi and Dornod). In 2007 it took over East Asia Minerals Energy Co. It signed agreements in about 2006 regarding prospects near Sainshand in Dornogovi. An Areva Mongol subsidiary, Cogegobi or Kojegobi LLC, is trialling in situ leaching at Dulaan Uul in the Ooshlin Govi Basin of Dornogovi province. Cogegobi was originally (1996) a JV with 30% held by Gobigeo, but this share passed to Areva Mongol in 2008. Areva projects some 1000 tU/yr production as possible after 2016 from Sainshand uranium province in Dornogovi.

Solomon Resources of Canada is exploring on its Baruunbaayan uranium project in the west of Dornogovi province, and following the new 2009 Nuclear Energy law its main exploration licence immediately west of the Areva tenements in the Ooshlin Govi Basin was granted.

In 2007 Century City International of Hong Kong entered into an agreement with China Nuclear Energy Industry Corp (CNEIC), a subsidiary of CNNC, to explore and develop uranium resources on its leases in eastern Mongolia.

Red Hill Energy holds a number of exploration licences including the Emeelt deposit in the Ulaan Nuur fault zone of Dornogovi, Khashaat in Omnigovi and Baganurat 350 km southeast of Ulaan Baatar, and Jargalan, 500 km west of the city

In December 2008 Japanese trading company Marubeni acquired rights to conduct feasibility studies on three uranium deposits, including Dornod and Gurvanbulag, developed by KRI and Western Prospector. The company planned to invest US$ 430 million and had signed a letter of intent with Khan. Since it was perceived that the laws of the mining-dependent country had become increasingly protectionist in recent years, Khan Resources then commented that “We are excited by Marubeni’s interest in Khan’s Dornod uranium project and are optimistic about the positive influence Japanese investors have on the Mongolian mining investment environment. Marubeni will work to improve the mining investment climate in Mongolia." MonAtom and Rosatom have both said that a Japanese company, presumably Marubeni, may be involved with the Dornod project JV.

In September 2009 India signed a uranium supply and nuclear cooperation agreement with Mongolia.

Nuclear power proposals

Russia is examining the feasibility of building nuclear power plants in Mongolia.

The Nuclear Energy Agency has tentative plans for developing nuclear power, using either Korean Smart reactors or Toshiba 4S types, from 2021. Three sites under consideration are Ulaan Baatar, western Mongolia and Dornod province.

Non-Proliferation

Mongolia joined the IAEA in 1993, though it has applied safeguards under the NPT since 1972. A law on nuclear weapons-free status was passed in 2000. The Additional Protocol to its safeguards agreement with IAEA has been in force since May 2003.

Appendix: Khan Resources and Dornod

The Canada-based Khan Resources Inc. (KRI) has had a 69% share in the Dornod project, mostly through a 58% subsidiary Central Asian Uranium Co. Ltd (CAUC), a Mongolian stock company set up by World Wide Minerals at the behest of the government in late 1990s. Russia's Priargunsky Mining & Chemical Enterprise (a subsidiary of ARMZ and Rosatom) and Monatom each own 21% of CAUC, which claims the only uranium mining licence in Mongolia. A bankable feasibility study undertaken for Khan had confirmed the viability of the project, the capital cost estimate being US$ 333 million and first production possibly in 2012. A definitive feasibility study released in March 2009 showed that the project was sound, on the basis of 24,780 tU indicated resources (NI 43-101 compliant), including 20,340 tU probable reserves. Annual production of 1150 tU over 15 years was envisaged.

In July 2009 MRAM suspended, it said for three months, the CAUC mining licence due to alleged violations of Mongolian laws. Then in late August the Nuclear Energy Agency announced that the Dornod Uran joint venture of MonAtom with Russia's ARMZ would develop the project to produce about 2000 t/yr. Uranium would be exported but not necessarily to Russia. In mid January 2010 CAUC's mining licence was restored by MRAM. Khan's exploration licence was unaffected.

Khan had been granted a 3-year exploration licence from MRAM early in 2008 covering part of the Dornod orebody, and was applying to have this converted into a mining licence contiguous with that held by CAUC. In addition, subsidiary Khan Mongolia holds 100% of an exploration license covering an adjoining "Additional Dornod property". In March 2009 Khan was reported as holding 58% of the No.2 deposit (open cut mine) and two thirds of the deep No.7 deposit (via CAUC?), and 100% of the remaining third of the No.7 deposit, which would give it 69% of the overall uranium resource. The company was aiming to negotiate an investment agreement with the government as soon as possible, and engineering was then likely to take three years to mine start up.

On 27 November 2009 ARMZ announced a cash offer to buy all Khan's shares, at a substantial premium on the market. ARMZ said that it believed "the offer represents full and fair value for the Khan shares and provides Khan shareholders with an opportunity to receive liquidity at a significant premium to the current market, as well as value certainty today, relative to the significant political and licensing risks associated with the development of the Dornod property in Mongolia." On 15 December Khan's board of directors unanimously recommended its shareholders reject the offer, describing it as inadequate, failing to recognize the full value of the company, and containing "objectionable" terms and conditions, as well as being "highly prejudicial and opportunistic" and exposing Khan to serious risks.

On 25 January 2010 Khan announced that it had signed a memorandum of understanding with MonAtom to set up a joint venture and resolve the ownership of Dornod. It also creates a framework for developing the deposit and bringing it into production. The proposed corporate structure had MonAtom acquiring a 51% interest in both CAUC and Khan Mongolia, then after a share issue Khan would end up with 65% of the joint venture company, which in turn would own 74% of CAUC and 100% of Khan Mongolia, while MonAtom would own up to 20% of Khan.

But a week after this, on 1 February 2010, the Khan directors recommended a full takeover by a China National Nuclear Corporation subsidiary, CNNC Overseas Uranium Holding Ltd. The price was 118% higher than before Russia's unsolicited bid in November 2009, and 48% above what they offered with some implied duress. The Khan CEO said: "We look forward to working with CNNC to build upon the progress we have made in Mongolia towards establishing a stable platform for developing the Dornod uranium project and bringing it into operation." The CNNC bid was extended to 25 May 2010, apparently to allow time for Chinese government approval, but possibly also due to Mongolian government hostility.

However, ARMZ then extended its takeover offer for Khan, citing a Nuclear Energy Agency statement that some provisions of the Khan-Monatom agreement were contrary to Mongolian law and policy. ARMZ asserted that the agreement, "including its provisions on revising and granting a mining license to CAUC, as well as exploration licenses of Khan Mongolia, cannot be properly approved and do not comply with the existing legislation in Mongolia.” ARMZ also said that the agreement contravened Mongolia's international obligations under the intergovernmental agreement between Mongolia and Russia of August 25, 2009, which provides for setting up the JV Dornod Uran to develop the Dornod uranium deposit.The ARMZ bid expired on 1 March 2010.

On 13 April 2010 Khan announced that it had received notice from the NEA that CAUC's mining and exploration licences had been invalidated as of October 2009, purportedly due to the company's failure to address issues identified in July 2009. Khan said it intended to challenge the ruling, and that "The NEA's intention appears to be to invalidate our licenses, as well as potentially those held by other foreign companies operating in the region, with a view to transferring all of the mineral rights and interests in the entire Dornod uranium region to a 'Dornod Uranium joint venture' that is purportedly being established between the Russian and Mongolian Governments."

On 21 April Khan announced that CAUC had filed a formal claim in the Capital City Administrative Court in Mongolia challenging the legal basis for the notice received from the Mongolian NEA purporting to invalidate CAUC's mining license 237A and seeking a declaration that NEA's action was invalid. It said that Khan Mongolia was preparing to file a similar claim in relation to exploration licence 9282X, and it had written on 15 April to the Prime minister of Mongolia appealing for his help.

Khan then said that the CNNC takeover remained ongoing and should not be affected by "any expropriation of Khan's properties or assets". However, on 24 May CNNC Overseas Uranium Holdings informed Khan that its cash offer to acquire all Khan's common shares would be allowed to expire following its failure to obtain regulatory approval from the Chinese government. The National Energy Administration, an arm of the Chinese National Development Reform Commission (NDRC), said that the offer was not approved.

In November 2010 the NEA announced that would not reinstate Khan's licences.

On 10 January 2011 Khan announced it had "formally commenced an international arbitration action against the Government of Mongolia for its expropriatory and unlawful treatment of Khan in relation to the Dornod uranium deposit". The arbitration brought by Khan and several of its subsidiaries will take place under the Arbitration Rules of the United Nations Commission on International Trade Law, and asserts claims under the Energy Charter Treaty, the Foreign Investment Law of Mongolia, and the Founding Agreement between Khan and the Mongolian Government. The claim was served on various officials of the Mongolian government, and seeks over US$200 million in compensation for losses and damages.

Grant A. Edey, President of Khan Resources: The Nuclear Energy Authority cancelled our license without legal groundings

September 17, 2010

Grant A. Edey, President and CEO and Director of Khan Resources: The Nuclear Energy Authority cancelled our license without legal groundings

It is an interview made by Daily Newspaper on July 31 2010. However, the legal sue is still undergoing. Therefore, business-mongolia.com decides to deliver this interview to its readers.

Q: Can you share with us on Khan Resource’s background and its operation in Mongolia?

G.Edey: Khan Resources is an open and publicly listed company deals with uranium exploration and mining. Khan Resources has been developing uranium deposit in Dornod aimag in last 14 years.

Q: Can you update us with current developments at Khan Resources?

G.Edey: Right at the moment we stopped our mining operations due to cancelation of our mining and exploration licenses by the related authority claiming that we breached laws and regulations of Mongolia

Q: So did Khan Resources breach the law?

G.Edey: Of course not. Khan Resources hasn’t breached any laws and regulations of Mongolia.

Q: So why the Nuclear Energy Authority canceled your licenses? What are the main reasons or explanations of such act?

G.Edey: The accusations are not well reasoned. In 2007, Khan Resources raised fund to invest in uranium deposit in Dornod, but this act breached legal provisions of Law on Nuclear Energy which was adopted only in 2009. Another accusation is that storage for drill cores is located in the territory of special protected area. Actually, these drill cores were dumped by Russians in Dornod and we offered to remove these drill cores to safer place. We can’t accept these wrong accusations.

Q: What was the key factor to cancel you licenses?

G.Edey: Our licenses were suspended in summer of 2009. In summer of 2009, Russia and Mongolia made agreement on joint exploitation of radioactive minerals in Dornod region. Later on we found out that this agreement was built to start joint exploitation on the licensed areas where Khan Resources has been developing for last 14 years. We don’t believe that it is just an accident.

Q: Who owns Khan Resources?

G.Edey: Khan Resources Inc. is listed at TSX and owned by around 3500 shareholders. Khan Resource management and its Board controls its one third of interest.

Q: Did Khan Resources try to sell its shares to the Russians?

G.Edey: No. Russians made their offer directly to our shareholders. In market economy, anyone can offer their proposal to buy certain shares

Q: Did CNNC Corp. offer to buy your shares?

G.Edey: Yes. CNNC bid was 50% higher than offer of the Russian ARMZ. But any of them buy our shares. They wouldn’t offer to buy our shares if licenses of Khan Resources weren’t canceled.

Q: What is your next plan or what is your intention in the future?

G.Edey: We want to exploit Dornod uranium deposit together with the Mongolian Government and its MonAtom LLC.

Q: Did Russians and Khan Resources agree to accept the resolution of acquiring 51% of uranium properties according to the Law on Nuclear Energy?

G.Edey: Russians didn’t, but Khan Resources, principally, agreed on November 2009 and accepted the Mongolian State ownership of 51% during its signature of MOU in January 2010.

Q: How big difference exists between plans prepared by Russians and Khan Resources?

G.Edey: It has big difference for Mongolia. Khan Resources developed feasibility study for Dornod uranium deposits and planned to pay $337 million tax income to Mongolia during its 15 years of exploitation. But Russians plan to transport its ore to its factory located in 200 kms from this deposit via railway. According to this plan, it will create far less workplaces in Mongolia.

Q: If Mongolia grants licenses which were owned by Khan Resources to Russians, what outcome is expected?

G.Edey: Mongolia would lose its reputation to the world business community, leading decrease in the size of investment and number of workplaces. Since the cancelation of Khan Resources licenses from the Nuclear Energy Authority, negative articles and columns on Mongolian investment environment were appeared on the international media channels. Will you invest in house project where the Government wants to ruin that building?

Q: How Canada supports foreign investment?

G.Edey: Canada has open door policy and freely allows foreign companies to deal with uranium exploration and exploitation. Foreign companies can offer bid for the Canadian companies. Through supporting all types of investment, Canada exploits 30% of world uranium mines and has strong uranium development companies.

Q: There are some news floating around that Khan Resources would sue against the Mongolian Government at the International Arbitrage Court on cancelation of its licenses. How certain is it?

G.Edey: Khan Resources has started legal actions to solve this issue according to the law and it may bring us to the International Arbitrage Court. We are approaching to the court with purpose of gaining fair evaluation on our expenses spent on the canceled licenses. This evaluation is $150 million and even could reach $200 million. We are confident that we will win the case.

Q: Do you have any comments to add?

G.Edey: Khan Resources has been operating in Mongolia for 14 years and invested $20 million to Dornod uranium deposits. But we were mistreated for breaching the Mongolian laws and regulations and lost our licenses. We think that this cancelation was committed with clear intention and purpose of granting the mentioned licenses to the Russians. It is faulty acts that Mongolia breaches international laws and conventions. Also, Russia will gain more than Mongolia from it.

Grant A. Edey, President and CEO of Khan Resources: The Nuclear Energy Authority cancelled our license without legal groundings
It is an interview made by Daily Newspaper on July 31 2010. However, the legal sue is still undergoing. Therefore, business-mongolia.com decides to deliver this interview to its readers.

Q: Can you share with us on Khan Resource’s background and its operation in Mongolia?

G.Edey: Khan Resources is an open and publicly listed company deals with uranium exploration and mining. Khan Resources has been developing uranium deposit in Dornod aimag in last 14 years.

Q: Can you update us with current developments at Khan Resources?

G.Edey: Right at the moment we stopped our mining operations due to cancelation of our mining and exploration licenses by the related authority claiming that we breached laws and regulations of Mongolia

Q: So did Khan Resources breach the law?

G.Edey: Of course not. Khan Resources hasn’t breached any laws and regulations of Mongolia.

Q: So why the Nuclear Energy Authority canceled your licenses? What are the main reasons or explanations of such act?

G.Edey: The accusations are not well reasoned. In 2007, Khan Resources raised fund to invest in uranium deposit in Dornod, but this act breached legal provisions of Law on Nuclear Energy which was adopted only in 2009. Another accusation is that storage for drill cores is located in the territory of special protected area. Actually, these drill cores were dumped by Russians in Dornod and we offered to remove these drill cores to safer place. We can’t accept these wrong accusations.

Q: What was the key factor to cancel you licenses?

G.Edey: Our licenses were suspended in summer of 2009. In summer of 2009, Russia and Mongolia made agreement on joint exploitation of radioactive minerals in Dornod region. Later on we found out that this agreement was built to start joint exploitation on the licensed areas where Khan Resources has been developing for last 14 years. We don’t believe that it is just an accident.

Q: Who owns Khan Resources?

G.Edey: Khan Resources Inc. is listed at TSX and owned by around 3500 shareholders. Khan Resource management and its Board controls its one third of interest.

Q: Did Khan Resources try to sell its shares to the Russians?

G.Edey: No. Russians made their offer directly to our shareholders. In market economy, anyone can offer their proposal to buy certain shares

Q: Did CNNC Corp. offer to buy your shares?

G.Edey: Yes. CNNC bid was 50% higher than offer of the Russian ARMZ. But any of them buy our shares. They wouldn’t offer to buy our shares if licenses of Khan Resources weren’t canceled.

Q: What is your next plan or what is your intention in the future?

G.Edey: We want to exploit Dornod uranium deposit together with the Mongolian Government and its MonAtom LLC.

Q: Did Russians and Khan Resources agree to accept the resolution of acquiring 51% of uranium properties according to the Law on Nuclear Energy?

G.Edey: Russians didn’t, but Khan Resources, principally, agreed on November 2009 and accepted the Mongolian State ownership of 51% during its signature of MOU in January 2010.

Q: How big difference exists between plans prepared by Russians and Khan Resources?

G.Edey: It has big difference for Mongolia. Khan Resources developed feasibility study for Dornod uranium deposits and planned to pay $337 million tax income to Mongolia during its 15 years of exploitation. But Russians plan to transport its ore to its factory located in 200 kms from this deposit via railway. According to this plan, it will create far less workplaces in Mongolia.

Q: If Mongolia grants licenses which were owned by Khan Resources to Russians, what outcome is expected?

G.Edey: Mongolia would lose its reputation to the world business community, leading decrease in the size of investment and number of workplaces. Since the cancelation of Khan Resources licenses from the Nuclear Energy Authority, negative articles and columns on Mongolian investment environment were appeared on the international media channels. Will you invest in house project where the Government wants to ruin that building?

Q: How Canada supports foreign investment?

G.Edey: Canada has open door policy and freely allows foreign companies to deal with uranium exploration and exploitation. Foreign companies can offer bid for the Canadian companies. Through supporting all types of investment, Canada exploits 30% of world uranium mines and has strong uranium development companies.

Q: There are some news floating around that Khan Resources would sue against the Mongolian Government at the International Arbitrage Court on cancelation of its licenses. How certain is it?

G.Edey: Khan Resources has started legal actions to solve this issue according to the law and it may bring us to the International Arbitrage Court. We are approaching to the court with purpose of gaining fair evaluation on our expenses spent on the canceled licenses. This evaluation is $150 million and even could reach $200 million. We are confident that we will win the case.

Q: Do you have any comments to add?

G.Edey: Khan Resources has been operating in Mongolia for 14 years and invested $20 million to Dornod uranium deposits. But we were mistreated for breaching the Mongolian laws and regulations and lost our licenses. We think that this cancelation was committed with clear intention and purpose of granting the mentioned licenses to the Russians. It is faulty acts that Mongolia breaches international laws and conventions. Also, Russia will gain more than Mongolia from it.