Mongolia's Uranium: A Missing Link in Europe's Strategic Autonomy

The European Union’s pursuit of strategic autonomy is currently hindered by a vulnerable nuclear fuel cycle characterized by heavy reliance on the Russian Federation for conversion, enrichment, and raw materials (Haneklaus et. al., 2025). As the EU attempts to navigate the „trilemma” of energy security, economic competitiveness, and decarbonization, Mongolia has emerged as a partner with the potential to rewire global uranium supply chains.

Mongolia’s Uranium Endowment and European Demand

Mongolia’s uranium potential is significant in global terms, though estimates vary between international and domestic assessments. According to the 2024 „Red Book” (OECD, 2025, s.28), Mongolia possesses approximately 66,200 tonnes of uranium in reasonably assured and inferred resources at a cost of extraction category of up to $130/kgU. However, domestic estimates reported by the Mineral Resources and Petroleum Authority of Mongolia (cited by World Nuclear Association, 2026a) suggest significantly higher resource levels of approximately 166,657 tU, exceeding internationally reported figures. Broader geological assessments further indicate that Mongolia’s total uranium potential could be substantially larger, with some estimates exceeding one million tonnes, although these remain largely speculative and unevenly explored (OECD, 2025, s.338). Such a total would place Mongolia among the world’s top five uranium provinces.

Yet, in terms of market share, Mongolia currently accounts for roughly 2% to 3% of identified global reserves, ranking 10th globally (Mongolia Inc., n.d.). While the country has not achieved sustained commercial-scale production since the 1990s, the operationalization of the Zuuvch Ovoo deposit – the centerpiece of current development – is projected to produce 2,500 to 2,750 tU annually starting in 2028 (Lkhaajav and Gankhuyag, 2026).

The potential relevance of Mongolia for European energy security becomes clearer when viewed through the lens of quantitative supply-demand dynamics. While the EU remains one of the world’s largest uranium importers, the scale of Mongolia’s emerging production capacity suggests that it could play a non-negligible role in future supply diversification. The following estimates illustrate both the magnitude of European demand and the extent to which Mongolian projects could realistically contribute to meeting it over the medium to long term:

• EU Demand: In 2024, EU uranium imports exceeded 13,000 metric tons, representing one-fifth of global demand (Pócza, 2025).
• Mongolian Contribution: The Zuuvch Ovoo project alone could realistically meet nearly 2,500 metric tons, meaning it could supply nearly 20% of the entire European Union’s annual uranium demand on a 10-20 year horizon (only under the assumption that the entire production is directed to Europe).
• Scaling Potential: When including other prospects like the Dornod deposit (2,400 tU/year) (OECD, 2025, s.368), Mongolia could possibly contribute nearly 5,000 tU per year to the global market within next decade, positioning it alongside major producers like Namibia, Australia and Uzbekistan (World Nuclear Association, 2026b).

The French-Mongolian Uranium Agreements

The bilateral relationship between France and Mongolia, specifically through the Orano Group, serves as the concrete evidence of a functional EU-Mongolia partnership. This relationship transitioned from long-term exploration to a definitive industrial phase with the signing of a landmark Investment Agreement on January 17, 2025.

The Zuuvch Ovoo project is being developed by Badrakh Energy, a joint venture between Orano and the Mongolian state-owned company MonAtom, reflecting a model of cooperation that combines foreign investment with national resource governance. The agreement covers a substantial financial commitment, including an initial investment of approximately $500 million prior to production and a total of around $1.6 billion over the projected 30-year lifespan of the mine (World Nuclear News, 2025). Importantly, the project has already demonstrated technical viability: a pilot phase conducted between 2021 and 2022 successfully produced 10 tonnes of natural uranium concentrate (so-called yellowcake) with a uranium content of 75%, confirming the feasibility of deploying In-Situ Recovery (ISR) mining techniques in the challenging environmental conditions of the Gobi Desert (Orano, n.d.).

Historically, the primary obstacle was Mongolia’s rigid 2009 Nuclear Energy Law, which mandated a 34% state equity stake often requiring the government to incur debt (World Nuclear Association, 2026a). A paradigm shift occurred in November 2024 when the Mongolian Parliament approved amendments allowing an „equity-to-royalty” swap (Parliament of Mongolia, 2024) (Chinggis Law LLP, 2024). Under this new framework, the state reduced its equity interest to a 10% stake in preferred, non-dilutive shares in exchange for a significantly higher total royalty potential (14-19% depending on market prices). This de-risked the project for Orano while securing a steady revenue stream for Mongolia’s sovereign wealth fund. Other remaining obstacles include local concerns regarding groundwater contamination and radiation risks, necessitating continuous community engagement and transparent scientific monitoring (Renchindulam, 2024).

Structural Constraints and Geopolitical Dynamics

For Mongolian uranium to reach European reactors, a number of interrelated structural and geopolitical constraints must first be addressed. At the infrastructural level, Mongolia’s export system remains historically oriented along a north-south axis linking it to Russia and China, making the development of alternative westward routes, particularly the Trans-Caspian International Transport Route (TITR), a strategic necessity for bypassing Russian territory (Cassaneva, 2026). The viability of this route for uranium transport was demonstrated in 2023 when Kazatomprom, the world’s largest producer, shipped 58% of its Western-bound uranium via the TITR (Omirgazy, 2023). However, this corridor is still constrained by limited maritime capacity across the Caspian and Black Seas, as well as complex regulatory requirements associated with transporting Class 7 radioactive materials across multiple jurisdictions (The World Bank, 2023). 

Additional bottlenecks arise within the fuel cycle itself: although Mongolia is capable of producing uranium concentrate (yellowcake), it lacks domestic conversion and enrichment facilities, requiring shipment to processing sites in Europe, such as those in France (e.g., Malvési and Tricastin), before the material can be used in nuclear reactors. 

Addressing these constraints will require significant investment, reflected in the 2025 Memorandum of Understanding between Mongolia and EIB Global, which aims to mobilize up to €1 billion for the development of sustainable transport infrastructure and support the country’s integration into global energy supply chains (European Investment Bank, 2025).

Another turbulence is connected to the possible influence of Beijing towards Ulaanbaatar. China exerts significant pressure on Mongolia’s external economic relationships through its trade dominance, as nearly 90% of Mongolian exports in 2025 flow to PRC and 40% of imports came from there.

Table 1: Mongolia’s Top Export Partners in 2025 and the Value of Imported Goods (in USD thousands)

Source: Own compilation based on data from the National Statistics Office of Mongolia (n.d.)

Table 2: Mongolia’s Top Import Partners in 2025 and the Value of Imported Goods (in USD thousands)

Source: Own compilation based on data from the National Statistics Office of Mongolia (n.d.)

On top of that China controls advanced technologies for refining and separating rare earth elements and has already demonstrated a willingness to use so-called „weaponization of dependencies”, such as export controls on gallium and germanium, to constrain Western strategic interests (Kalinin, 2026) (Baskaran and Schwartz, 2024). Chinese companies are also active in Mongolian uranium (e.g., Hunboo and Xin Xin), creating direct competition for resources intended for the EU (World Nuclear Association, 2026a). Concurrently, Russia leverages its role as Mongolia’s primary energy supplier to propose a small nuclear power plant aimed at preventing a Western monopoly on Mongolian uranium (RPTA, 2026).

Policy Recommendations

To move from „passive diversification” to „active integration”, the EU must utilize specific policy instruments to secure its Mongolian uranium supply, namely:

1. Critical Raw Materials Act (CRMA): Mongolian uranium fits the CRMA’s “International Engagement” pillar, which seeks to develop Strategic Partnerships with reliable third countries to ensure no more than 65% of any strategic material comes from a single source (European Comission, n.d).
2. Global Gateway Initiative: This should be the primary vehicle for financing the transport infrastructure required to link the Gobi Desert to European markets via the Middle Corridor, building on the €10 billion mobilized for such corridors in 2024 (Avdaliani, 2025).
3. European Critical Raw Materials Centre: Planned for the second quarter of 2026, this institution should facilitate joint purchasing by matching the demand from European nuclear utilities with the production output from projects like Zuuvch Ovoo (European Parliament, 2026).

Active integration however requires more than just long-term supply agreements. It necessitates „de-risking Finance” where the EU co-invests in the value chain. This involves:

1. Direct Investment in Infrastructure: Using the EIB and Global Gateway to fund specific rail spurs and port modernizations to ensure the physical viability of the TITR.
2. Regulatory Alignment: Assisting Mongolia in developing a stable, transparent regulatory framework for radioactive waste management and health safety to maintain a „social license to operate”.
3. Strategic Stockpiling: Coordinating with Member States to build strategic stockpiles of Mongolian-sourced uranium to withstand potential geopolitical interference from neighboring powers.

In conclusion, the success of the 2025 Investment Agreement between Orano and Mongolia is the first step. For Mongolia to become a foundational pillar of European energy security, the EU must follow through with the diplomatic support and multi-billion euro infrastructure investments promised under the Global Gateway and the Critical Raw Materials Act.

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