Iron ore concentrator to be put into operation this year

Three largest iron ore deposits Tumurtolgoi, Tumurtei and Khust in Darkhan and Selenge aimags are highly efficient and are capable to be exploited for 40-50 years. The Tumurtei deposit, the largest of them, has been identified to have 229.3 million tons of iron ore reserve. In 2007, the deposit was classified as a mineral deposit with strategic significance and it is believed that the deposit’s reserve could reach 300 million tons. Relying on these iron ore deposits, Mongolia intends to develop iron industry, opening new mines, building plants, expanding existing plants and augmenting the capacity. For instance,
dry-magnetite iron concentrators will be installed at the Tumurtei deposit and Tumurtolgoi deposits, a wetmagnetite iron concentrator at the Darkhan Metallurgical plant, state owned joint stock company, and its steel mill will be expanded.
Trio Firm from the USA is constructing the ‘Dry-magnetite iron concentrator’ which will be capable to process 750 tons/h iron ore at the Tumurtei deposit. Currently, the construction process is at 90 percent and is intended to be completed this year. At the January 24 plenary meeting of Parliament, a response was given
to an inquiry by MP S.Ganbaatar to PM N.Altankhuyag about completing the process of implementing the metallurgy plant to be built based on iron deposits in Darkhan-Selenge zone, participation of the domestic
private sector in the project, and further actions. MP and Minister of Mining D. Gankhuyag provided the response — “By 2002, export of mining products of Mongolia covered about 50 percent of total exports
of the country. But it rose to nearly 90 percent as of 2013, showing an increase of over 40 percent within a
decade. Among the exports, the export volume of iron ore and concentrate reached 6.4 million tons, making it the third largest export product. The lower content of metal in Mongolia’s iron ore caused it to be sold at a lower price than the market price. Therefore, we aim to produce value-added iron pellets in the home country and make end-products for export,” the Minister underlined.

Throughout the country, there are a total of 38 companies that hold licenses to exploit iron ore deposits,
of which 24 are operating actively. According to 2013 contracts, the price of iron ore export was USD58
on average. If a wet concentrate is produced, it is possible to rise to USD124. Iron pellet production will
raise the price to USD165. Although Darkhan metallurgy is capable of producing 100 thousand tons a year, it works at 50-60 percent of the capacity due to a scarcity of scrap metal. In 2009, metallurgy operated at
loss of Tgs3 billion. In 2012-2013, it worked fruitfully with a net profit of Tgs6.4 billion. In collaboration with
QSC LLC, the plant invested Tgs81.3 billion to expand production and establish an iron and steel industrial
complex in 2015. It is estimated that establishing a dry-magnetite iron ore concentrator will create about 80-90 jobs. Concentrating iron ore with high content with dry magnetite method and concentrating iron ore with low content with wet-magnetite method are significant to increase the iron content. When iron ore with low
content is concentrated using the wetmagnetite method, the sales price per ton can be increased by USD40-45. Within the framework of drawing up the ‘Mongolian Iron’ program, a joint working group from the Mining Ministry, Economic Development Ministry and the Industry and Agriculture Ministry has studied
domestic iron needs, iron ore reserves, conditions to produce metal products in regional scale, and introducing state-of-the-art and eco-friendly technology and they are working out proposals.

With a purpose to support the metallurgy sector, particularly production of iron concentrate and
steel frameworks, the Government made a resolution in July, 2013 to issue USD50 million from Chinggis Bond to fund ‘Mongolian Steel’ project which aims at establishing a plant to process iron ore with wet magnetite; a project of Mongolrostsvetmet LLC to establish a plant at the Bargilt mine to process iron ore with wet magnetite; and a project by the Beren Group LLC to establish a plant for the steel framework of buildings. MP S.Ganbaatar who put inquiries forward criticized that although many promises were made, there are very few things seen created in reality and warned that if government has matters which is required to be resolved by parliament, it should be immediately submitted to parliament and actual construction and production works need to be intensified. He also asked the Minister to pay attention to nano technology and water research while planning the metallurgy sector.
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