The memorandum of understanding for "peaceful use of radioactive minerals and nuclear energy" was signed during Mongolian President Elbegdorj Tsakhia's state visit to India.
According to a statement issued by the Mongolian presidency, Indian officials expressed a "willingness to cooperate in mining, especially in uranium sector."
Tsakhia pledged to support Indian involvement in the minerals sector through government policy and "mutually beneficial long-term cooperation." He said Mongolia appreciated "India's notion to develop our cooperation in the uranium sector, as we are always open to such proposals."
Mongolia claims to have 6 percent of the world's uranium reserves.
India, Asia's third-largest energy consumer, now has a nuclear power generation capacity of 4,120 megawatts, which accounts for 3 percent of its total capacity. By 2030 it hopes to boost that amount to 60,000 megawatts, Shyam Saran, special envoy to Indian Prime Minister Manmohan Singh, said Jan. 8, Bloomberg reported. But India lacks its own uranium resources.
In September 2008 India received a waiver from the nuclear suppliers' group to undertake nuclear commerce, lifting a 30-year ban on purchasing uranium. Since then, it has signed nuclear deals with France, Russia, the United States and Kazakhstan.
Although Mongolia is not a member of the NSG, it had supported India's case for an exemption at the International Atomic Energy Agency meeting prior to the NSG talks.
Nuclear experts believe that the supply of uranium is more critical for India than access to enrichment and reprocessing technology.
To meet India's domestic shortages, the company is slated to spend at least $1.2 billion to secure equity in uranium mines abroad.
India is looking to secure long-term uranium supply contracts from Kazakhstan, Canada and Brazil as it orders reactors totaling some $14 billion from overseas, said state-run Nuclear Power Corp. of India Chairman Shreyans Kumar Jain said in early June, Bloomberg reports.
Mongolia's uranium production cooperation agreement with Russia earlier this year was followed by a deal to develop Mongolia's Dornod uranium deposit in a 50-50 joint venture with Russia's AtomRedMetZoloto, reports World Nuclear News. That upset Canada-based Khan resources, which has a 100 percent stake in an exploration lease and a 58 percent stake in a mining lease related to the deposit.
Prior to that, the Mongolian government suspended exploration licenses and passed a new nuclear energy law to the surprise of Western companies that already have uranium interests in the country, said World Nuclear News.