The Japanese government, aiming to reduce the country’s dependence on oil and natural gas, has cast its eyes far and wide for new sources of energy.
Oil and gas are still playing a part in Japan’s energy diplomacy as in Mongolia, where a deal was struck for a 44,000 b/d refinery—the nation’s first—to be built in Darhan with Japanese assistance.
The aim of the refinery is to reduce Mongolia’s dependence on foreign oil products. That’s a step in the right direction, perhaps, but it does not change the fact that Mongolia so far has no oil resources of its own.
As a result, Mongolia’s president recently forged an agreement with his counterpart in Kazakhstan for the delivery of 1-1.5 million tonnes/year of oil for processing in the planned refinery.
Eyeing uranium
Japan’s interest in Mongolia, however, goes well beyond a contract for the construction of a refinery. Indeed, even as Japanese officials were discussing the refinery, they also were eyeing Mongolia’s uranium deposits.
Mongolia’s uranium resources are currently estimated at 62,000 tonnes, or about 1% of the world’s identified resources. But there could be more—a lot more—in those hills according to scientists who calculate that the reserves could be as much as 1.39 million tonnes, potentially the world’s largest.
Very clearly, the Japanese would like to be on the ground floor if those estimates turn out to be correct.
Indeed, as one Japanese businessman put it in Ulaanbaatar last week: “It is particularly important that new uranium deposits are brought on stream because reserves at deposits currently in production are going to run down by 2020.”
The rapid increase in uranium demand now expected follows a recent decision by the Nuclear Supplier’s Group and International Atomic Energy Agency that will allow India to import nuclear fuel and technology.
Demand rising
Spurred by competition from India, to say nothing of China, the increased demand for uranium means that Japan is keen to finalize supply agreements with producers to meet its own import requirements of 9,000 tpy. The Japanese visit to Ulaanbaatar was clearly geared toward that end, and the refinery—without putting too cynical an edge on things—was doubtlessly a sweetener.
Still, the Japanese are canny enough not to rely on the mere possibility of increased reserves waiting to be found in Mongolia. Even as their energy diplomats were at work in Mongolia, others were forging another deal in Uzbekistan.
The Uzbek government granted Japanese trading house Sojitz exclusive rights for 18 months to develop the Chetbertoye mine, 350 km west of Tashkent. In July, Mitsui & Co agreed with Uzbekistan to look at forming a joint venture to search for uranium.
The prospects in Uzbekistan? According to the International Atomic Energy Agency, Uzbekistan holds 93,000 tonnes of deposits, equivalent to be about 3% of the world’s uranium resources.
