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Bureau of Mines / Minerals yearbook mineral industries of Asia and the Pacific 1992
Year 1992, Volume 3 (1992)

Wu, John C.
Mongolia,   pp. [260]-266 ff. PDF (2.0 MB)


Page 263

THE MINERAL INDUSTRY OF MONGOLIA—1992  263Industry, exports of
mineral
commodities in 1992 were as follows: copper ~ concentrate, 346,000 tons;
fluorspar, ~ 166,000 tons; fluorspar concentrate, 
97,000 tons; coal, 78,000 tons; cement, 
16,000 tons; metal scrap, 24,000 tons; 
and molybdenum concentrate, 3 ,000 tons. Because of a lack of mineral 
processing facilities, Mongolia continued to rely on the former U.S.S.R.
for processed mineral products to meet its domestic demand. In 1992, petroleum
products, ferrous and nonferrous metal products, and fertilizer materials
remained the major import components, accounting for about 40% of Mongolia's
imports in 1992. According to the Ministry of Trade and Industry, imports
of petroleum products in 1992 were as follows: gasoline, 209,800 tons; diesel
oil, 146,800 tons; mazut (a fuel used to prime the boilers), 46, 100 tons;
jet fuel, 15,000 tons; and lubricants, 12,200 tons. 
COMMODITY REVIEW 
Metals 
 Copper and Molybdenum.—Production of copper concentrate and molybdenum
concentrate from the Erdenet Mine in Bulgan Aymag of northern Mongolia increased
to 300,200 tons and 3,238 tons, respectively, in 1992, compared with 258,000
tons and 
2,846 tons, respectively, in 1991. According to an official of the Mongolian-Russian
joint venture of the Erdenet Combine, in the past 2 years the average ore
grade of the Erdenet Mine had decreased to about 0.76 % copper and the copper
concentrate contained between 28 % and 35 % of copper, no more than 
0.35% ofarsenic and 0.05% of bismuth, plus 0.2 g/mt of gold, 50 g/mt to 55
g/mt of silver, 60 g/mt of selenium, and 7 g/mt to 8 g/mt of tellurium. The
molybdenum concentrate at the mine contained 50 % to 53 % molybdenum, 0.8%
to 1.2% of copper, plus 350 g/mt to 450 g/mt of rhenium, 90 g/mt of selenium,
and 15 g/mt of tellurium. 
 In 1992, the output of copper and molybdenum was below the planned production
level mainly because of a 
shortage of electric power. Most of the combine's requirement for electric
power was supplied by the No. 4 powerplant in Ulaanbaatar. The shortage of
electric power reportedly was caused by a shortage of steam coal for power
generation at the No. 4 powerplant and partially due to a dispute between
the combine and the No. 4 powerpiant on the price of electricity. 
 According to the first Deputy General Director of the combine, the loss
of the copper concentrate production due to power shortage amounted to 65,000
tons in 1991 and 50,000 tons or about $37 million in export earnings loss
in 1992. To solve the power shortage problems, a feasibility study had been
conducted for building a coal-fired powerplant at the combine to meet about
50 % of its annual electric power requirement. According to the general manager
of C. Itoh & Co. in Ulaanbaatar, the feasibility study for building
the
powerplant involved renovation of the heating plant at the combine by installing
two new 30-MWcapacity steam turbines for the existing boilers. The cost of
building the powerplant was estimated at between $42 million and $50 million.
The Mongolian Government reportedly approached the Imports and Exports Bank
of Japan to finance the project. 
 In April, C. Itoh & Co. of Japan extended a $20 million loan to
Mongolia
for improving the mining operation and rehabilitating the milling facilities
at the Erdenet copper-molybdenum complex. However, most of the borrowed money
reportedly had been spent for the purchase of mining equipment, spare parts,
fuels, explosives, and tires from Russian and China to keep the operation
going. To repay the loan, Mongolia was to export about 35,000 mt/a of copper
concentrate to Japan.3 
 According to the Ministry of Trade and Industry, exports of copper concentrate
totaled 346,000 tons in 1992 compared with 245,000 tons in 1991. Mongolia
continued to export a large portion of its copper concentrate to Russia and
Kazakhstan. Exports of copper concentrate to Japan, according to Japanese
trade statistics, declined to 
30,877 tons in 1992 from 32,791 tons in 
1991. Exports of concentrate to Japan reportedly were shipped through Siberia
via Nakhoda Port on the far eastern coast of Russia. Some quantities of the
copper concentrate were exported to China, Finland, and Switzerland. Mongolia
continued to export all of its molybdenum concentrate to Krasno Uralsk of
Russia. 
 The structure of the Erdenet copper and molybdenum combine is composed of
a 25-Mmt/a open pit mine, an ore storage yard, a 430,000-mt/a concentrator,
a workshop for repair and maintenance, a heating plant, a food processing
plant, and a construction company. The combine operated a school, hospital,
and shopping center inside the complex and a farm with more than 10,000 cattle
and sheep nearby. In 1992, the MongoliaRussian joint-venture copper and molybdenum
complex employed about 6,500 workers; of those, about 1 ,200 are Russian,
including managers, technical advisers, medical personnel, and teachers.
 Gold and Silver.—Official statistics on production and trade of
gold
and silver remained classified as a state secret. Gold production in 1992
was estimated to be between 850 kg and 1 ,000 kg, including gold recovered
as a byproduct of the Erdenet copper operation. Silver recovered as a byproduct
of copper was estimated to be about 16,000 kg in 1992. Mongolbank, the Mongolian
state bank, controls all buying and trading of gold in Mongolia. To promote
gold and silver mine production in Mongolia, Mongolbank raised its purchasing
prices ofgold and silver per gram to $12.86 and $0.24 in December 1992. 
 According to the Ministry of Geology and Mineral Resources, gold was produced
mainly from the alluvial deposits at Tolgoyt and at Shariyn Gol in Selenge
Aymag; at Khailaast (Hailaast) in Toy Aymag; and at Mukhar Ereg and Duvuntiin
in Bayanhongor Aymag. Gold mining at Tolgoyt was by Mongolsovtsvetmet, a
Mongolia-Russiajoint venture; at Shariyn Gol, by Shariyn Gol Coal Co.; at
Duvunt, by Duvunt Gold Enterprise; and at Mukhar Ereg and Duvuntiin, by Zhargalant
(Gargalant) Enterprise. The 


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