In the late 1970s, Soviet geologists discovered large uranium deposits near Mardai River in the Dornod province of Eastern Mongolia. The governments of the USSR and Mongolia signed a secret agreement to open a uranium mine in 1981 and Mardai town rose out of the Mongolian steppe to accommodate workers and officials. Its location and the railroad that connected Mardai to the Soviet Union did not appear on any map. The town was populated only by Russians, who came from all over the USSR. Some 13 000 people lived there in the late 80s and early 90s, while Mongolians were strictly prohibited from entering the Mardai exclusive zone, which was guarded and patrolled by the Russian police and army.
Only on rare occasions were Mongolian Communist Party officials allowed to enter Mardai on official visits and to shop in the local stores for products direct from Moscow. It was the only place in Mongolia where it was possible to buy fresh fruit all year round. Local shops sold items that were not even available Ulan Bator. Mardai had a school and a kindergarten with the best teachers, a fully equipped sports hall, a football and hockey ground, an Olympic size swimming pool and even a ferris wheel.
The mine started operating in 1988; uranium ore was extracted and shipped to Krasnokamensk in Siberia where it was processed. The mine provided about 100,000 tonnes of ore a year, most of which was used for Soviet nuclear warheads and strategic reserves. In 1989, as Mongolia emerged from one-party autocracy, the government revealed the existence of Mardai to the public and when the Soviet Union collapsed two years later, the mine started to receive less money due to the financial crisis in Russia. Uranium production in Mardai stopped in 1995, and Russians reluctantly returned home soon after. The last Russian workers left in 1998.
After this "Russian exclave" was given back to Mongolia, locals from the neighbouring towns of Choibalsan and Dashbalbar started to demolish the buildings and infrastructure in search of useful materials, especially scrap metal, which they were sold to Chinese dealers across the border. The wooden houses were taken apart and logs were reused to build new homes. Today, Mardai looks like a town in a warzone and only a few families come there occasionally to continue removing building materials. Others try their luck by digging small illegal mines in search of fluorite.
Only one nomadic family has been living in Mardai permanently for the past 13 years. Bator, the head of the family, takes care of his cattle while his wife Tumenerdene sees to the family household. Every summer they invite a friend's son, 11-year-old Baira, to come and help Bator with the housekeeping and the animals. In his free time Baira goes to the abandoned buildings to play.
The departing Russians left large amounts of untreated radioactive waste from the former mines and this has been linked by Ryoko Imaoka, an associate professor of Mongolian Studies at Osaka University, to birth defects in livestock which graze around Mardai. Bator tells of a baby goat that was born with its front legs fused to its body. He believes that the grass and water near the mine are contaminated and the Mongolian media has taken up the story, reporting on cancer related deaths near Mardai.
Despite the parlous environmental condition of the area, Mardai's uranium deposits, estimated at around 1,307,000 tonnes, still attract the attention of major mining companies. Since the early 2000s Chinese, Canadian and Russian corporations have been trying to obtain mining licenses and in 2009, President Putin of Russia signed a deal on behalf of the country's Atomic Energy Corporation with the Mongolian government paving the way for further mining at Mardai. Whether or not Mardai will be rebuilt is unclear. For now, the town stands as a grim reminder of Russia's colonial exploitation of a neighbouring country.