Mongolia has signed a preliminary agreement with French state-controlled miner Orano Mining for the development of a $1.6bn Zuuvch Ovoo uranium mining project in Dornogovi province, reported Reuters citing the Mongolian government.

The draft deal is currently under review by the Mongolian parliament.

This project is set to begin its preparatory phase from 2024 to 2027, entailing an initial investment of $500m.

Mongolian Prime Minister Oyun-Erdene Luvsannamsrai was quoted by the news agency as saying: “This agreement is a significant step forward in boosting inward investment and employment opportunities for the Mongolian people.”

Production is expected to start in 2028, with peak output projected to reach 2,600 metric tonnes of uranium by 2044.

Orano, a uranium producer with operations in Canada, Kazakhstan, and Niger, has been conducting exploration activities in Mongolia for over two decades.

In 2023, Orano signed a protocol outlining the development and operation of the uranium mine project in Mongolia.

This protocol provides a framework for an investment agreement for the establishment of a partnership between Orano and the Mongolian government for the Zuuvch-Ovoo uranium mine project

The Zuuvch-Ovoo project is being developed by Badrakh Energy, a joint venture between Orano Mining and MonAtom, a Mongolian state-owned enterprise.

Last month, Rio Tinto announced plans to trial battery swap technology for electric haul trucks at the Oyu Tolgoi copper mine in Mongolia through an alliance with China’s State Power Investment Corporation (SPIC).

The project will include eight haul trucks, 13 batteries with 800kWh of capacity, along with a robotic battery swap and charging station.