Mongolia reaches deal for $1.6 billion uranium mine with France's Orano

BEIJING (Reuters) - Mongolia said on Friday it had reached a preliminary agreement with France's Orano Mining Group to develop a long-expecteduranium mining project worth $1.6 billion.

A draft agreement for the deal was submitted to the Mongolian parliament for preliminary discussion, the Mongolian government said.

The project, with an initial investment of $500 million and a total investment of $1.6 billion, will start its preparatory phase from 2024 to 2027, with first production expected in 2028, the government said.

Peak production will hit 2,600 metric tons in 2044, it added.

"This agreement is a significant step forward in boosting inward investment and employment opportunities for the Mongolian people," the statement cited Mongolian Prime Minister Oyun-Erdene Luvsannamsrai as saying.

    An earlier press release saying that the government had reached a final agreement with Orano had been issued in error. A corrected press release later clarified that a preliminary deal had been agreed.

Orano, a major uranium producer with mines in Canada, Kazakhstan and Niger, has been in Mongolia for more than 25 years carrying out exploration activities, it said on its website.

(This story has been officially corrected to clarify that an earlier press release saying the government had reached a final agreement with Orano had been issued in error, in paragraph 6; and to fix the peak production figures to 2,600 metric tons, not 2.6 million metric tons, in paragraph 4)

(Reporting by Ethan Wang and Lewis Jackson; Editing by Jason Neely, David Goodman and Louise Heavens)