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JOGMEC’s Mineral Exploration
Activities in Mongolia

By Hirotoshi KUNITOMO

Establishment of JOGMEC

1

Japan Oil, Gas and Metals National Corporation (JOGMEC)
has been established on February 29, 2004, integrating
Metal Mining Agency of Japan (MMAJ) and Japan National
Oil Cooperation (JNOC), with the mission to ensure a stablesupply of energy and nonferrous metals for Japan.
1963

MMAJ
・Establishment of the Metallic Exploration
Financing Agency of Japan

1964

・Geological survey and Exploration activities
started and the name changed to the Metallic
Minerals Exploration Agency of Japan.

1967

JNOC
・Establishment of Japan Petroleum Development
Corporation (JPDC)

1972

・To improve the technology for exploration andproduction of oil and gas, Technology Reserch
Center (TRC) was established in JPDC.

1973

・Mine pollution control activities started and thename changed to the Metal Mining Agency ofJapan.

1978

・The national stockpiling program begun and thename changed to Japan National Oil Corporation(JNOC)

1983

・National Stockpiling of rare metals started.

2001

・The function expanded to add; funding facility for
asset acquisition.

2004.2 Establishment of JOGMEC

Metals Related Activities

2

1. Support for Exploration and Development(1)Information collection, analysis, and dissemination(2)Geological Surveys(3)Finance, investment and loan guarantees

2. Support for mine pollution control
3. Research and Development
4. National Stockpiling of Rare Metals

History of Mineral Exploration Activities in Mongolia• High Potential of mineral resources in Mongolia• JICA/JOGMEC(MMAJ) launched TechnicalCooperation Program for Mineral Resources
Development in 1991, and 6 projects has been
carried out continuously until 2003 by Japanese
ODA budget.
• Joint Basic Exploration Scheme (JBES) started
from 2003 by Japanese ODA budget.

3

Scheme of Technical Cooperation Program for MineralResources Development (1991〜2003)
METI( Government of Japan)
ODA Budget

JICA

Government of theRecipient Country

JOGMEC (MMAJ)

Agreement of the Technical Cooperation(Scope of Work)・Exploration Works・Technology TransferResults4

Location Map of the Technical Cooperation
Programs in Mongolia

5Western Erdenet (2001-03)

Tsav (1992-95)

Erdenet Mine

Central North(1999-2000)
Ulaanbaatar

Tsagaan Tsakhir Uul (1996-97)

Altan-Tal(1994-95)

Uudam Tal
(1991-93)

Brief Summary of the results of the TechnicalCooperation Programs (1 / 2)
Areas
Uudam Tal
(500,000km2)(1991-1993)

Tsav(Mine Site)(1992-1995)

Altan-Tal(345,000km2)(1994-1995)

TargetMinerals
Pb, Zn,Au

Pb, Zn,Ag

Au, Cu,Pb, Zn

Survey method

6Brief Summary

・Existing data analysis
・Geological survey
・Geophysical survey
・Drilling

Existing data analysis andreconnaissance geological survey
indicated potential of polymetallic
and gold mineralization in severaldistricts.

・Existing data analysis
・Tunneling・Ore-separation test

Geologic reserve of 1,540,000 ton( Au 1.5g/t, Ag 263g/t, Pb 6.84%, Zn
4.01%, Cu 0.23%) was confirmed.

・Existing data analysis
・Satellite Image analysis

96 alteration zones were delineatedby satellite image analysis. Within 4zones, gold mineralization wasconfirmed by groundtruth.

・Groundtruth

Brief Summary of the results of the TechnicalCooperation Programs (2 / 2)
AreasTarget
Minerals

Survey method

7
Brief Summary

Tsagaan
Tsakhir Uul(43km2)(1996-1997)

・Geological survey
Au, Cu, Pb,
・Geophysical survey
Zn, W・Drilling

Central North(200,000km2)(1999-2000)

・Existing data analysis Surface alteration indicated possible
high-sulfidation gold mineralizationCu, Mo, Au ・Satellite Image analysis
and porphyry type mineralization
・Groundtruth
around Western Erdenet district.

WesternErdenet(5,500km2)(2001-2003)

・Geophysical survey
・Geological andCu, Mo, Au
geochemical survey
・DrillingSome drills intersected gold-bearingveins. However gold mineralization
was small-scale and judged to be
uneconomic.

Air-borne geophysical survey,geophysical Survey (IP), geologicaland geochemical survey, and drilling
survey indicated the potential ofporphyry type mineralization in theZuukhiin gol district.

8Joint Basic Exploration Scheme (JBES:2003〜)

Consignment

METI
ODA BudgetTransfer(if exploration results are positiveand a Japanese company wishesa further exploration,)

Japanese Company

JV Agreement

JOGMEC

PartnerOperator
Exploration Expenditure
Acquiring Option of Equity

Providing Property(opportunity to exploration)
Receiving exploration results

Unincorporated JVExploration
Additional and Detailed Exploration

Brief description of the JBES (1/2)

9

1. Joint Basic Exploration Scheme (JBES) was implemented as a
new mineral exploration program in 2003.
2. JOGMEC conducts the JBES under a consignment contract with
the Ministry of Economy, Trade and Industry (METI).
3. Two Primary Objectives of the JBES-accelerating mineral production and resultant economic
growth in developing countries, and-contributing to a stable supply of mineral resources to Japan.
4. Major Target
Currently primary interest is placed on Copper projects especiallyin Asia and Latin America.

Brief description of the JBES (2/2)

10

5. JV Partner
Governmental organizations or private companies which holdmineral properties in developing countries.
6. JV Agreement- Ordinary joint venture exploration agreement (Farm-in agreement),
i.e.JOGMEC acquires an option of equity interest of the Property
expending exploration fee.
- An option acquired by JOGMEC will be transferred to a Japanesecompany with the first priority, if exploration results are positive anda Japanese company wishes a further exploration.
7. Budget
A typical annual project budget between US$100,000 to $1million isenvisaged, however this will be flexible depending on the project.
Typical period will be 1 to 5 years.

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Location map of the JBES projects in Mongolia

RussiaErdenet Mine

Zuukhin gol
Ｘ(Cu, Mo)
Ulaanbaatar

Ondorkhaan

China
China

Outline of the JBES projects in 2004
1.

Zuukhin gol project(2004〜）①Partner
Mongolian Ministry and company②Target mineral : Cu③Area : 850km2④Survey method
Drilling Survey

2.

Ondorkhaan project（2003〜）①JV partner
Mongolian company②Target mineral : Cu
③Area : 45,000km2④Survey method
Geological survey, Geophysicalsurvey (IP), Drilling survey

12Future perspective

13• Encouraging results from the JBES projects.
• JOGMEC’s portion of the project will be transferredto (a) Japanese company(ies) for a further
exploration and a mine development, if exploration
results are positive and a Japanese company
wishes to invest.
• Newly developed Mine in Mongolia will contributeto the Mongolian economy.
• Products will be exported to overseas.