Эрдсийг эрдэнэст
Ирээдүйг өндөр хөгжилд
Ирээдүйг өндөр хөгжилд
Mining The Resources
Minding the future
Minding the future
By A. Khaliun
Mongolia's 2024-2028 Government Action Program places strong emphasis on developing value-added processing industries, with the construction of a copper smelting plant identified as a key priority. As part of this initiative, preparations are underway to establish a new smelter based on Erdenet.
We spoke with G. Yondon, General Director of Erdenet Mining Corporation LLC, about the groundwork already completed, the international tender process, and how the planned copper smelting plant is expected to operate once construction is complete.
- How much did Erdenet Mining Corporation extract and sell in 2025?
In 2025, the Erdenet Mining Corporation extracted 47.1 million tonnes of ore, ensuring uninterrupted production throughout the year, and processed 39.9 million tonnes. The plant produced 574,000 tonnes of copper concentrate, generating MNT 4.6 trillion in sales revenue.
As of December 18, net profit had reached MNT 693.1 billion, with the figure expected to rise further by year's end. From its total revenue, the corporation sold $1.2 billion to the Bank of Mongolia and contributed MNT 2.2 trillion to national and local budgets in the form of taxes and fees.
In 2024, our team increased ore processing capacity to 40 million tonnes, and in 2025, the plant operated at its full installed capacity. This year has been one of the most remarkable in the plant's 47-year history, setting record highs across all operational indicators.
- As of the end of 2025, how many more years of operation do the plant's confirmed reserves allow?
The most important factor for the plant's longevity is the mine's reserves. In August 2024, the Erdenet Plant confirmed, according to international JORC standards, that the life of the currently exploited Central Deposit could be extended, allowing sustainable operation for another 55 years. Additionally, completing the detailed exploration of the Oyut Deposit in 2025 is considered one of the key achievements of our mining team.
The plant is gradually upgrading its technology to ensure sustainable operation for more than 50 years. In 2025, we completely modernized the old Russian flotation line, which has a capacity of 12 million tonnes.
- At what stage are the preparatory works for the Erdenet-based mega copper smelting project?
The Law on the Legal Status of Industrial and Technological Parks was revised and adopted in 2022. Following this, Prime Minister L. Oyun-Erdene granted Special License No. 01 to establish an Industrial and Technological Park (ITP) based on the Erdenet Plant. Construction of the ITP began shortly afterward, and major infrastructure projects such as water and power supply, roads, and the foundation for a railway are now in their final stages. The Erdenet Mining Corporation has invested $68 million in these works.
In 2025, the national commission approved the completion of the water supply and railway construction works. Road construction is more than 60% complete, while power supply work is around 30% complete.
We also prepared updated feasibility studies for the copper concentrate processing plant and the copper wire and cable plant. These were approved on August 13, 2025, by the Mineral Resources Professional Council under the Ministry of Industry and Mineral Resources. While the studies were initially approved in 2019, they were revised based on the test results from the elemental sulfur plant, making this latest approval particularly significant.
The economic calculations of the feasibility study (FS) were reviewed by the international independent audit firm BDO, and the report is expected to be presented soon. According to the FS, establishing a plant capable of processing 560,000 tonnes of concentrate and producing 120,000 tonnes of refined copper per year would require an investment of $800 million.
How was the profitability of the copper smelting plant calculated? In the feasibility study, the price of copper was calculated at $8,340 per ton. Based on this assumption, the return on investment was estimated at 8%, with the initial investment expected to be recovered in approximately nine years. The primary goal of constructing a smelting plant is to meet Mongolia's domestic demand from internal sources and reduce dependence on external markets.
The idea of establishing a copper smelting plant has been a very long-standing dream in Erdenet. In 1987, Director Sh. Otgonbileg initiated the first feasibility studies for its construction. Two years later, the proposal was reviewed at a meeting of the Council of the Ministry of Fuel and Energy, Geology, and Mining Industry. The council passed a resolution supporting the development of a comprehensive feasibility study for a copper smelting plant, including rolling and extrusion workshops, based on the Erdenet Mining Corporation.
Erdenet Mining Corporation initially studied various copper smelting technologies to determine which would be most suitable for processing the ore extracted at Erdenet.
In 2014, under the leadership of Director Ts. Davaatseren, a technology referred to as the "New Chinese Technology" - a patented process recognized worldwide in the copper smelting industry and available in several variants - was selected as the most suitable for local conditions. By 2019, the feasibility study based on this technology had received formal approval.
This technology requires very low capital investment and operating costs. At the time. The plan included producing elemental sulfur, prompting the Mineral Resources Professional Council to recommend conducting pilot production tests and refining the feasibility study. Following this recommendation, pilot testing was launched.
In 2021, a special license for elemental sulfur production was obtained; however, the outbreak of the pandemic caused delays, and the pilot program was not completed until 2024. Ultimately, the pilot production of elemental sulfur was successful.
At the Government meeting held on December 3, a decision was made to announce an international tender for the construction of a copper smelting plant.
- What conditions and criteria are being set for participants in this tender?
The technical terms of reference for the international tender, designed to select a strategic investor for the construction of the copper smelting plant, specify three main criteria. First, the company must own its own patented technology. Second, it must finance the investment independently. Third, the company must have prior experience in constructing copper smelting plants.
Furthermore, preference will be given to tender participants who propose producing value-added products such as cathode copper within the Erdenet Industrial Technology Park. According to the tender terms, the selected company will finance the project with its own funds. Oversight will be provided by Erdenet Corporation through a professional third-party supervisory company appointed for this purpose.
Invitations have been sent to foreign investor financial institutions, investment funds, entities that have signed confidentiality agreements and expressed interest in investing through long-standing cooperation with Erdenet Mining Corporation, as well as to 55 of the world's leading companies in the copper smelting sector - more than 90 organizations in total. Proposals from interested parties will be accepted until January 15, 2026, after which they will be submitted to the Government for review. This represents significant progress this year toward the production of value-added final products.
- How many copper smelting plants are operating worldwide?
Today, more than 120 copper smelting plants are in operation globally. While older facilities are being retired, new plants continue to be built. Over the past three years, a new plant has been constructed in each of Indonesia, India, and the Congo, while some outdated facilities - such as those in Chile - have been closed.
- Erdenet Mining Corporation has set the copper price at $9,486 per tonne in its 2025 business plan. However, as of December, the global market price has exceeded $12,000 per tonne. What factors have driven this increase?
In 2025, three major accidents occurred in copper mines in the Congo, Chile, and Indonesia - an unprecedented frequency in such a short period for the copper industry.
These incidents were largely due to insufficient investment in mining operations and inadequate safety measures. One of the most significant accidents took place at the Kamoa-Kakula mine in the Democratic Republic of the Congo, which has the world's highest copper grade at approximately 6%. As a result of these accidents, the global copper supply in 2025 faced an average shortfall of about 550,000 tonnes of refined copper, which contributed significantly to the rise in global prices.
- What copper price has been projected in the 2026 business plan, and how are next year's price trends and market outlook expected?
In its 2026 business plan, the Erdenet Corporation has projected the copper price at $9,653 per tonne, while the Government has budgeted a slightly higher figure of $9,700 per tonne. Prices are expected to decline from the current level of $12,000 per tonne in the coming year.
- Does Erdenet Mining Corporation have any long-term or short-term debt?
As of today, Erdenet Mining Corporation has no outstanding debt.