Eedemt-2 and Eedemt-3 deposits are situated the territory of Bayanjargalan soum of Dundgobi province 300 km from Ulaanbaatar city, 100 km southwest of Choir, a railway junction town, 130 km northeast of capital soum Mandalgobi of Dundgobi province, and 26 km west of Aragtai, center of Bayanjargalan soum.


Exploration area has hilly steppe landscape surrounded by hills of average height that are uplifted 1100-1300 meters. No surface water in the area, except for salty lake that accumulates rainfall in the Khuutiin deposit region. The area climate is warm in summer and belongs to moisty region.

A geological mapping with scale of 1:200 000 was first completed in the area by A. N. Efimov in 1953. In 1955, V.A. Makarov, V.M. Kazakov, and V.S. Rozov completed another 1:100 000 scale geological mapping, and evaluated the prospectivity of many mineral occurrences in this area.


In 1964, V.V. Solovyev and V. I. Ermakova ran exploration in Khuutiin coal deposit, and estimated its coal reserve at 57346 thousand tons of category C1 coal and 45773 thousand tons of category C2 coal. Even though oil shale unit was intersected during drilling, no study was made to define whether it was oil shale or not.


While conducting reconnaissance in Khuutiin region in 1992-1995, L. Munkhtogoo first identified that the coal was overlied by oil shale. He also found out that previous explorers misclassified the coal seams, and remade the coal reserve estimate. As a result, category C1 coal was estimated at 82301 thousand tons and category C2 coal was 108606 thousand tons, totaling 190907 thousand tons.


When he first made oil shale resource estimate, he separately estimated oil shale containing more than 5.5 percent of tar, which resulted in 612360 thousand tons of C2 coal, and the tar was estimated at 42 million tons.