The Southern Gobi region of Mongolia, long known for its substantial coal production, is now emerging as a pivotal new source of copper. The area boasts significant mineral deposits and is attracting major global mining companies, highlighting its potential.
The Southern Gobi is endowed with approximately 85 million ounces of gold and 50 million tonnes of copper. This rich resource base has drawn interest from prominent industry players such as Rio Tinto, China’s Zijin Mining Group, and the original Ivanhoe Mines, now Turquoise Hill, which was acquired by Rio Tinto in late 2022.
During the period from 1997 to 2007, exploration in the Southern Gobi accounted for 9% of global metal discoveries. Major investments in the region surged between 2007 and 2012 and have recently gained renewed momentum.
In the past two years, Rio Tinto, BHP and Zijin have either entered the region or expanded their existing investments. Notably, Rio Tinto began production from the underground mine at Oyu Tolgoi in March of last year. This mine is projected to become the world’s fourth-largest copper producer by 2030. Since 2010, Rio Tinto, in partnership with the Mongolian government, has invested around $15 billion in the Oyu Tolgoi project, which is expected to produce about 500,000 tonnes of copper annually from both the open pit and underground operations between 2028 and 2036—enough to manufacture approximately 6 million electric vehicles each year.
Xanadu Mines is advancing its flagship Kharmagtai Copper-Gold Project through a Prefeasibility Study. Recently, Xanadu completed one of the world’s largest porphyry exploration drilling programs, totaling around 54,000 meters. Zijin Mining invested $64 million in Xanadu in April 2022, supporting both the company and the Kharmagtai Project, which is slated for a final investment decision this year, with anticipated first production in 2027.
BHP has also invested through its Xplor program in Asian Battery Minerals, which discovered nickel-copper-platinum group elements at its Oval Project. Asian Battery Minerals recently completed a reverse takeover with Doriemus, raising $6 million at a $23 million pre-money valuation.
Mongolyn Alt’s (MAK) Tsagaan Suvarga Copper-Molybdenum Project, currently under construction, is expected to begin oxide production in 2025 and sulphide production in 2026. The project, listed as strategically important by the Mongolian government, has reserves of 1.5 million tonnes of copper and approximately 60,000 tonnes of molybdenum.
A new era for Mongolia’s mining industry
Kincora Copper CEO Sam Spring highlights the Southern Gobi as one of the fastest-growing mining and infrastructure regions globally. “Last year, 60 million tonnes of coal were produced in the neighboring coal district. The Southern Gobi region is rapidly emerging as a key player in the mining sector,” he notes.
Copper production in Mongolia is projected to increase to 800,000 tonnes by 2028, up from 300,000 tonnes last year, representing a 167% growth over five years. Mongolian Minister of Mining and Heavy Industry Ganbaatar Jambal indicates that the country currently exports about 1.4 million tonnes of copper concentrate annually, with potential to increase this to 2-2.5 million tonnes in the future.
Aside from Oyu Tolgoi, other projects are advancing towards mining, including the Kharmagtai Copper and Gold Project, financed by Zijin, and the Tsagaan Suvarga Mine. These developments are pushing Mongolia closer to its goal of becoming the world’s third-largest copper producer.
Exploration and partnerships
The Southern Gobi Belt could be home to a fourth emerging porphyry district. Kincora Copper’s Bronze Fox Project, initially discovered by Ivanhoe Mines, hosts three large, underexplored porphyry intrusive complexes. The project has a maiden inferred resource of 426,000 tonnes of copper and 437,000 ounces of gold at a small portion of one complex.
Kincora is refining its exploration target to between 100-300 million tonnes at 0.25-0.35% copper equivalent. With a market capitalization of $10.6 million, Kincora has secured an earn-in partner, Woomera Mining, which will advance the Bronze Fox Project. Woomera can earn an 80% stake by spending up to $4 million over five years and will become Kincora’s largest shareholder.
Woomera CEO Ralf Kriege emphasizes the project’s scale and potential. “We have transformed Woomera into a key player in one of the most active exploration and mining frontiers globally,” he says.
Looking ahead
Kincora plans a high-impact drilling program for the 2024 field season, targeting new discoveries and resource expansions. The program will include drilling at the Shuteen North Intrusive Complex, which is believed to be associated with the large Shuteen lithocap, and brownfield drilling at the Bronze Fox Intrusive Complex to confirm new higher-grade zones.
As the Southern Gobi region continues to develop, it is set to become a major hub for copper production, attracting significant investment and driving substantial growth in Mongolia’s mining sector.
