Battery Minerals (Continued)
A bout of international interest
The geological and geophysical data gathered is hoped to help entice further investment by lowering the risks. Already, multiple countries have shown gestures of interest in Mongolia’s battery minerals space. Late last year, France signed a deal with Mongolia to explore a lithium rich basin via the French Geological Study, also committing to investing over US$400,000. German chancellor Olaf Scholz also pledged to increase Germany’s involvement in the development of Mongolia’s critical minerals, especially copper and rare earths, back in 2022, but no further news has been heard since.
Rare earths have attracted the most attention, especially from the US and South Korea, which agreed with Mongolia to establish a Rare Metals Cooperation Center in Ulaanbaatar. South Korean telecommunications giant KT Corp signed an MoU with Mongolia to secure a stable supply of mineral resources, including REEs, and then signed another MoU with one of Mongolia’s largest corporations, Monnis Group, to cooperate on REE mining. Unfortunately, except for the French US$400,000 investment, these gestures of interest and formal memorandums remain just that – gestures – and some fear they are made to simply unnerve China, which controls the battery minerals value chain, a control that poses a great threat to global demand.
China seems unconcerned and is reassured by its power over battery minerals. In battery minerals supply chain speak, all roads lead to China, not just because China geographically bounds Mongolia’s borders to the south, but also because it has most of the knowledge and technology of battery minerals production. The US itself, so eager to unfasten itself from China, sources most of its REEs, graphite, and lithium from China. The Americans are looking at Mongolia as an alternative supply partner, but also at South Africa, the DRC, or Mexico, countries where Jose W. Fernandez, the US Assistant Secretary of State for Economic Energy & Business Affairs, has pilgrimaged recently, as well as in Mongolia.
“The Mongolian government seems to encourage investors from the US, Japan and Korea to come to Mongolia and secure the supply chain outside of China, yet it fails to consider that if the material is being processed in China, the whole point of a resilient supply chain that is independent of China is defeated. Also, producing oxide or carbonate of high content reduces the overall mass of the product, whereas bulk concentrate is, of course, much more voluminous, and costlier to transport,” said Purevtuvshin Tsooj, Project Leader at Mongolian National Rare Earths Corp (MNREC), the explorer advancing the Khalzan Buregtei project in Western Mongolia.
Better too early than too late
The obstacles to seeing a rare earths mining operation in Mongolia are many and needless to examine in detail. The development of battery minerals production in Mongolia would require the kind of investment environment, infrastructure, and specialist skills that Mongolia does not currently have. Investment coming in the form of offtake agreements would be unlikely for the early-stage projects, which is where most of Mongolia’s assets are at now. The potential backlash on mining REEs, which contain radioactive waste, would likely be fiercer than it has been for copper and other metals. Even if Mongolia succeeds in developing its first mine in lithium, rare earths, or graphite, the material produced would likely be sent to China for processing.
Solutions around these challenges exist. For instance, MNREC is considering producing 90% purity mixed rare earths dioxide or carbonate, rather than concentrate, which would both increase the value of the final product and allow the material to be shipped or flown further away, less constrained by the logistics cost. A joint processing plant fed by similar carbonatite-hosted deposits, like Khotgor (Temarise), Mushgai Khudag, and Lugiin Gol in the South Gobi, could also be a potential solution down the line. For now, lithium appears to be the most promising stride in the battery space, contingent on Ion Energy’s expected deal for an earn-in partner for Urgakh Naran.
"Mongolia has rare earths, lithium, huge potential in renewable energy resources, and much more. This is the bright future that the hard-working people of Mongolia deserve, but few legislators are ‘walking the walk’ besides just ‘talking the talk’."
Oliver Schnorr, CEO, Euro Khan
To be part of the value chains of critical minerals, Mongolia has much work to do, from regulation to infrastructure and beyond. Or perhaps, it would take for China to do what the West fears it could – pressing the stop button on exports of critical materials like REEs. Nevertheless, Mongolia should insist on looking at its battery prospects to stay relevant. “Within the current mining sector, one big chunk is metallurgical coal, and the other big chunk is copper, with the remaining 10-15% of it being a mix of other metals, including gold. The energy transition risks putting about half of our industry at peril in the next few decades. Contradictorily, the country’s Vision 2050 sees the mining industry expanding up to four times its current value. So how are we to grow the industry from a base that is supposed to be phased out? The future lies in those critical minerals that we know exist in Mongolia, yet we have little visibility of their extent,” summarized Dagva Myagmarsuren the CEO of QMC (Qualified Management Consulting).
In an evolutionary line, if coal represents Mongolia’s beginning in mining, and copper and gold its most dynamic present, battery minerals could be its future, as distant as this may be now. The country has yet to develop a comprehensive critical mineral policy, strategy, and list. Dagva Myagmarsuren from the Critical Minerals Association said the Association drafted these documents and submitted them to the government. “Things move slowly, while the world is changing very fast for critical minerals. The question is, are we going to be too late?” he asked, mentioning other countries that are way ahead.
Before looking at mining the resources on Mars on the Moon, Mongolia has ready materials sleeping in the Gobi. Since the ‘easy’ resources have already been found in mature jurisdictions, investors are likely to take the risk and look at the least explored ones. Richard Bennett, executive chairman of London-listed Getech, which offers a geoscience knowledge platform (Globe), helps mining companies to answer “where in the world” questions, and it collaborated with Asian Battery Minerals in Mongolia. “Getech is particularly interested in people who are looking for new exploration areas. In the search for the best risk-reward ratio, companies will either go looking for low-hanging fruits in the more challenging jurisdictions or pursue more expensive resources in the tried-and-tested, less risky jurisdictions,” said Bennett.
Mining for battery minerals in Mongolia will not be easy, but, to quote Robert Friedland, who himself quoted President John F. Kennedy: “We choose to go to the moon not because it’s easy, but because it’s hard.”
Article header image by Yols at Adobe Stock