Battery Minerals
Reaching for the moon?
“Stepping into the Gobi feels like stepping on the surface of the moon,” this is how most people describe the cold Gobi Desert in southern Mongolia, home to most mines in the country. Others have compared it to Mars. In a recent encounter with Elon Musk, Mongolia’s Prime Minister Oyun-Erdene Luvsannamsrai encouraged the Tesla billionaire to study the arid land as a casebook for Mars, given Musk’s personal goals of eventually colonizing the red planet. They also talked about a potential joint research venture on the use of rare earths and other minerals needed in electric vehicles that Mongolia is believed to host. Both lines of conversation – going to Mars or extracting the earth’s rare elements from the Gobi – somehow feel equally far-fetched.
Many questions – and theories – arise when it comes to Mongolia’s battery metals potential. The Gobi is widely thought to hold lithium, graphite and rare earth elements (REE), among others. How much of these is not fully known. According to a 2009 estimation by the US Geological Survey, Mongolia should have 31 million tons of REE reserves, second only to China (44 million tons). Considering that Inner Mongolia, a Chinese autonomous territory, is the main global supplier of rare earths, with the Bayan Obo mine alone supplying up to 45% of the world’s 17 REEs, even a non-geologist will be tempted to guess at similar characteristics for Outer Mongolia. On the graphite and lithium reserves, there were no official estimates we could find.
Out of Mongolia’s 80 REE occurrences and more than 280 mineralizations, as counted by Germany’s Federal Ministry for Economic Affairs and Climate Action (BMWK) in 2021, only three active explorers are looking at these, to our knowledge. One is Khotgor, which former Australian owner Parabellum Resources sold to Temarise in February 2024 for US$15 million. Located in the South Gobi, Khotgor is the only one, as far as we know, with a mineral resource estimate, completed earlier in 2023, which delineated a resource of 2 million tons with average NdPr grades of 20% REO. The other explorer actively advancing an early-stage light rare earths project is MNREC (Mongolian National Rare Earths Corporation) owned by the Trade and Development Bank (TDB). The Khalzan Buregtei project, in the far west of the country (Khovd province) was drilled back in 2012-2013 by its previous owners, an Australian company, and was taken over by TDB in 2015. The current owners completed another 20,000 m of drilling last year and expect to release a PFS in 2024.
Meanwhile, in lithium, one company carries the first-mover responsibility of proving Mongolia’s potential. Canada listed Ion Energy has two projects in the country, the clay evaporite Baavhai Uul and the more advanced Urgakh Naran, with the potential to be a brine asset. Ion is currently in discussions with an earn in partner that could inject more cash into developing the asset. “We are no longer looking to bring in a public equity investor, due to the dilution risks, but instead, an investor that buys into the asset with the obligation to perform exploration over several years with the option to acquire the remaining equity. That would leave Ion Energy with an NSR. These conversations are ongoing," said CEO Ali Haji.
In a more recent development, Chinese company Sinomine Resources Group has entered the lithium exploration scene in Mongolia through the acquisition of the Tsagan Chuluut project from local company Lithium Century for US$20 million. Though there is not enough data on the project, Sinomine told the Mongolian media that the project could contain reserves of 1.7 million tons lithium.
Two private junior companies are also looking at lithium on their respective licenses, but their focus on lithium is not exclusive: Gobi Venture has a multitude of metals to choose from at its Naran project in the Gobi area, among which it found an open lithium mineralization that the explorer plans to further investigate. Asian Battery Minerals has three different projects across commodities (lithium, graphite, copper-nickel) that it seeks to develop concomitantly. Its Tsagaan Ders lithium prospect in the Dundgobi region is early-stage, to be drilled later this year.
Asian Battery’s most advanced project is the Khukh Tag graphite project, which the company says is only 24 months away from a final investment decision. Khukh Tag is not only the most advanced graphite project in the country but also the only one we know of. Its total mineral resource is at 12.2 million tons at 12.3% grade. Gan-Ochir Zunduisuren, managing director of Asian Battery Minerals, told GBR that 2024 will be an important year for Khukh Tag, with planned high-impact drilling and infill drilling; by the second half of the year, the company also wants to have tested the material for suitability in battery anodes.
"Mongolia has tapped into less than 1% of the identified mine deposits, showcasing the immense potential for expansion within the mining sector. TTRC has conducted in-depth studies in nine graphite deposits across Mongolia, leading to the identification of graphene from graphite, marking a historic milestone in Mongolia's scientific landscape."
Khandmaa Sambuu, Executive Director, TRUE TRC (TTRC)
Investors require more geology and less mystery
Besides these prospects-turned-projects by the dozen players in lithium, graphite, and REE, there are multiple other occurrences and deposits documented in the country that are currently stagnant. The German Federal Institute for Geosciences and Natural Resources together with Mongolia’s Mineral Resource and Petroleum Authority (MRPAM) characterized two other carbonate-bearing deposits besides Khotgor (Mushgai Khudag and Lugiin Gol), as well as two more peralkaline deposits besides Khalzan Buregtei (Ulaan del and Tsagaan Chuluut), some of these being assessed as deposits of significant economic importance in previous studies. For lithium, Mongolia’s regulator, MRPAM, informs of two current deposits; Khukh Del, which appears to be held by state-owned company Mongolrostsvetmet, and Munkhtiin Tsagaan Durvuljin, for which we could not find more information. Together, they amount to a total resource of 203,000 t, according to MRPAM.
The problem is that many other licenses are held by private owners who do not have the skill, the will, or the money to do anything with them. Based on anonymous comments from insiders published by Newsbase, these licenses are used as collaterals for loans and there is little cooperation with the government on them. Our sources told us similar things. “In other jurisdictions, explorers take up a license for a limited time, and, if proven un-prospective, they give it back and take up another area, whereas, in Mongolia, licenses have turned into precious commodities themselves, sometimes held on to by people that lack the technical acumen to monetize their value and that treat the license just like they would treat a real estate property,” said Julien Lawrence, managing director of O2 Mining, shareholder and operator of the Chuulut fluorspar mine.
Without the explorers to study the grounds, the real potential of Mongolia’s battery metals space remains limited to the broad-scale data that geologists have provided to date. However, that data also has many gaps. Most existing targets today have been identified by Russian, Czech, Hungarian, and Polish geologists during socialist times, so the information is outdated. According to Geosan, a local airborne geophysics company, the government has conducted geological land surveys on a 1:200,000 scale across the entire territory, but only 40% of the land is covered by a more detailed 1:50,000 scale survey. Geosan itself provided airborne geophysical surveys over 20% of the country’s surface. The government is keen to change this, and aims that, by 2025, the remaining territory should be scanned on a closer 1:25,000 scale map. Local companies like integrated geospatial solutions company Geomaster will be participating in that tender.
For more specific geophysical information, the government has brought in Xcalibur Smart Mapping, a Spanish-based global leader in airborne and mapping geophysics: “Mongolia has had some traditional studies focused on surface geology in the mid-20th century, while some parts of the country have also been covered by airborne surveys, but the bulk of the data obtained would not meet what we call ‘modern’ industry standards. There is a gap in highresolution magnetics and radiometric gravity data to get a picture of the subsurface potential,” said Bart Anderson, COO APAC for Xcalibur.
Xcalibur will partner Geological Research Center of Mongolia and the Ministry of Mines and Heavy Industry to conduct a Helitem electromagnetic survey covering the south of the country, followed by a Falcon survey. “The quickest and most environmentally friendly way governments can fast-track their understanding of their country’s natural capital is by mapping from the air. This has the lowest carbon and community impact while delivering the fastest results,” Anderson told GBR.
Article header image courtesy of Kincora Copper