The Government of Mongolia has declared 2025 the “Year to Support the Development of the Capital City’s Infrastructure,” focusing on projects that reduce air and environmental pollution as well as ease traffic congestion in Ulaanbaatar City. At its regular session on January 22, 2025, the Cabinet of Mongolia approved a prioritized list of mega projects based on their overall impact.

Head of the 20-Minute City National Committee Erdeneburen Ravjikh and Governor of the Capital City Nyambaatar Khishgee were instructed to prepare an implementation plan for these projects and programs according to the newly established rankings. Cabinet members will provide the necessary support promptly, while relevant officials have been tasked with undertaking feasibility studies, technical designs, and budget estimates.

These priority projects will be carried out in accordance with the “General Development Plan of the Capital Ulaanbaatar City until 2040,” Mongolia’s long-term development policy “Vision-2050,” the medium-term “New Revival Policy,” and the “Action Program of the Government of Mongolia for 2024-2028,” which includes 14 mega projects.

Oversight and coordination will be managed by the Performance Monitoring Unit (PMU) under the Prime Minister, ensuring swift cross-sectoral collaboration for infrastructure development and pollution reduction efforts in Ulaanbaatar City. At its second meeting on January 18, 2025, the PMU decided to present the project rankings to the Cabinet. Projects were grouped into three main categories, which are traffic congestion, air pollution reduction, and infrastructure.

During its regular session on January 22, 2025, the Cabinet of Mongolia discussed the draft Agreement between Mongolia and the People's Republic of China on Cooperation in Increasing the Coal Trade and the Capacity of the Tavan Tolgoi Coal Mine and Establishing the Gashuunsukhait-Gantsmod Cross-Border Railway and decided to deliberate it with the pertinent Standing Committee of the State Great Khural.

This Agreement aims at ensuring long-term stable economic growth for the two sides, enabling the state-owned entities of the two countries to establish mutually beneficial and steady coal supply contracts, and regulating relations to increase the capacity of coal mines. Also, the Agreement is expected to boost Mongolia's coal production and exports and intensify the implementation of the Law on Mongolia's Sovereign Wealth Fund, providing an opportunity for the Mongolian people to equitably and fairly benefit from the country's mineral resources.

The Government of Mongolia’s 2024-2028 Action Program, approved by the State Great Khural’s Resolution No. 21 of 2024, outlines the implementation of 14 mega-projects. The first project reflected in the Program is the construction of cross-border railway and cargo terminals at the Gashuunsukhait-Gantsmod, Khangi-Mandal, and Shiveekhuren-Sekhee border points.

Mongolia sees the inauguration of US President Donald Trump as "positive" and has been in close contact with his team over deepening cooperation, the country's prime minister told AFP on Tuesday.

A landlocked democracy sandwiched between China and Russia, Mongolia relies heavily on its authoritarian neighbours but has sought to strengthen ties with the West in a push to safeguard its sovereignty.

Prime Minister Luvsannamsrain Oyun-Erdene said Ulaanbaatar saw the new Trump administration as a "great opportunity" to move forward with cooperation on everything from energy to tourism.

"President Trump personally knows... a great deal about Mongolia," he told AFP just hours after Trump began his second term.

"His family members have been on several personal trips to Mongolia to get acquainted with our nomadic lifestyle and beautiful landscape," he said.

"I do believe that we have great possibilities to cooperate with his administration going forward, to elevate the relationship between our two countries."

Mongolia would welcome a visit by Trump, he said, suggesting it could take place should the magnate make a trip to China.

"It is only a two-hour flight between Mongolia and China," he said. "We will seek the opportunity to organise his visit."

Mongolia is a major source of key minerals with coal exports, primarily to China, making up a major chunk of its foreign trade.

It signed a $1.6 billion investment deal with French nuclear giant Orano last week allowing it to exploit a vast uranium deposit in its southwest.

Oyun-Erdene said his team had been in "close contact with the transition team of President Trump's administration" with a view to continuing "our collaboration on critical minerals".

However, he acknowledged that threatened US tariffs on goods from China, Mongolia's largest trading partner, were sparking "worries" of an economic knock-on effect.

Oyun-Erdene also said there was "great hope" that Trump could help facilitate talks to end Russia's war in Ukraine, set to enter its third year next month.

Mongolia has not condemned the offensive and drew condemnation last year for its decision to welcome Russian leader Vladimir Putin for a state visit despite its status as a member of the International Criminal Court (ICC).

But the Mongolian prime minister defended that move, pointing to his country's "economic dependence and reliance on energy" from Russia.

"If Mongolia... arrest(ed) President Putin during his visit to Mongolia, then how would we transport President Putin to the ICC?" he said.

"We are a landlocked country," he said, stressing the need to "safeguard" its hard-won democracy in the face of its "two difficult neighbours".

He urged Western partners to help Mongolia decrease its "economic dependency on our two neighbours" instead of asking it to take "difficult" political positions.

"We would like to have more assistance from the West... help that can be more tangible, concrete and visible," he said.

Mongolia is partnering with the European Bank for Reconstruction and Development (EBRD) to advance renewable energy development in the country.

Under the collaboration agreement signed during the World Economic Forum in Davos on Tuesday, the EBRD will help implement solar, wind, and energy storage projects through auctions.

Key initiatives under the deal include construction and commencement of up to 300 megawatt (MW) of solar power plants and 200 MW of wind power plants with energy storage, including transmission infrastructure, by 2028.

The EBRD will also assist Mongolia in developing renewable energy strategies and low-carbon pathways.

"This partnership with the EBRD underscores our commitment to transforming Mongolia's energy sector into one that is sustainable, competitive, and aligned with global climate goals," Deputy Prime Minister Dorjkhand Togmid said in a statement.

In 2024, the EBRD invested over 260 million euros ($270 million) in 28 projects in the Mongolia, with the majority being in green transition financing.

($1 = 0.9622 euros)

Reporting by Tanay Dhumal and Mrinalika Roy in Bengaluru

On January 17, 2025, “Orano Mining” company of the French Republic and Mongolian Government signed an Investment Agreement to collaborate on a uranium mining project. This agreement represents the second major investment accord between Mongolia and a third neighbor country and marks the largest foreign investment since the Oyu Tolgoi project. The project will be implemented by the French-Mongolian joint venture Badrakh Energy LLC and Orano Mining S.A.S.

The deal is worth $1.6 billion. Mongolia will directly benefit from 51 percent of the project. The start of the use of the Zuuvch-Ovoo deposit, one of the 14 mega projects of the Joint Government, will not only increase foreign investment, but also create new jobs and introduce new technologies.

The investor has been operating in Mongolia in the field of exploration and mining since 1997, and began production trials of the Zuuvch-Ovoo deposit in July 2021 and successfully completed it in December 2022. The Zuuvch-Ovoo uranium deposit, discovered by geologists from Cogegovi LLC, is rightfully included in the top 10 largest deposits discovered in the world in the last 20 years.

Currently, Badrakh Energy LLC holds a special exploitation license covering three areas: Zuuvch-Ovoo, Dulaan-Uul, and Umnut, located in Dornogovi aimag. The company has completed the construction of the facilities necessary for conducting production pilot work at the Zuuvch-Ovoo deposit.

The Mongolian Government has negotiated with the investor a total of 18 times and has agreed on the following terms in the economic and investment areas in advance. Specifically, the initial investment amount will be approximately $500 million and is planned to be made within 4 years from the date of entry into force of the agreement.

For the initial investment, it has been agreed that the financing of the project’s investment and operations will not be financed through loans and will be financed through equity. In the event that shareholder loans are not approved during the project period and an urgent need for loans arises, it will be decided by a shareholders’ meeting, and the shareholder loans granted to the project implementing company before the date of entry into force of the agreement will be transferred to the project implementing company’s equity.

Rather than directly using the financial calculations submitted by the investor, the Mongolian side will develop its own financial calculation model in accordance with the international FAST (Flexible, Appropriate, Structured and Transparent) standard based on the feasibility study, and after verification with the investor, Mongolia confirmed the conditions for receiving the majority of the benefits of the strategically important mineral deposits, or at least 51 percent, annually in the accumulated amount.

The draft agreement specifically mentions the income to be calculated as direct benefits for the Government and the investor, and if the direct benefit of the Mongolian side does not reach 51 percent, the investor and the project implementing company will be obliged to reimburse the Government for the additional benefit adjustment payment necessary to bring the benefit to 51 percent.

The agreement stipulates that the Government will directly acquire 10 percent of the state-owned preferred shares of the project implementing company’s owners free of charge and will not reduce the percentage. The investor’s proposal to stabilize a total of 27 types of taxes was reduced during the negotiations, and it was agreed to stabilize only 4 types of taxes: CIT, VAT, Mineral Resources Royalty Tax, and customs tariffs. Although a proposal was submitted to stabilize the tax calculation method in a broad sense, it was agreed to stabilize only three indicators: tax type and rate; depreciation period; and loss carryforward period.

Mineral Resources Royalty Tax will be calculated as a basic and increased percentage, and special payments will be fully paid from the sales value of the product without deductions or inflation. The draft agreement includes the principle of anti-base erosion and profit shifting (BEPS) and full compliance with domestic law. During the negotiation process, it was with the investor party that marketing payments will not be recorded as deductible expenses for tax and financial reporting purposes.

New technologies will be introduced and a sulfuric acid plant will be established. The feasibility study includes $2.4 million for waste management and $96.2 million for the sulfuric acid plant, which will be built starting in 2028. The project is anticipated to bring significant societal and economic benefits, including increased foreign investment, enhanced state and local budgets, job creation, technology transfer, and strengthened international cooperation.

On January 22, the Government of Japan and the Government of Mongolia exchanged diplomatic notes informing each other that their respective internal procedures for the entry into force of the “Agreement between the Government of Japan and the Government of Mongolia concerning the Transfer of Defense Equipment and Technology,” which was signed in Ulaanbaatar on December 11th, 2024, was completed. Hence, this Agreement entered into force on the same day.

The Agreement establishes a legal framework for the Governments of Japan and Mongolia regarding the handling of defense equipment and technology to be transferred between the two governments in order to implement projects to be jointly determined including those contributing to international peace and stability. Specifically, it stipulates procedures to determine and confirm each specific transfer as well as basic rules on the proper use of the transferred defense equipment and technology.

The conclusion of this Agreement will ensure appropriate control over the defense equipment and technology transferred between Japan and Mongolia, especially regarding any subsequent transfer to a third party or any extra-purpose use. It is expected that this Agreement will contribute to closer cooperation between Japan and Mongolia for defense equipment and technology, and maintaining and improving the production and technological bases for Japan’s defense industry, thereby contributing to the security of Japan.

The Government of Mongolia and the World Economic Forum signed an Agreement on Cooperation in Developing an AI-based “Strategic Intelligence Platform.”

Deputy Prime Minister of Mongolia Dorjkhand Togmid and Managing Director of the World Economic Forum Olivier Schwab signed the Agreement. The platform aims at accelerating the implementation of countries’ medium- and long-term development policies, analyzing the multifaceted changes occurring globally and their contributing factors, taking timely responses, and enhancing the effectiveness of strategic decision-making.

The Government of Mongolia announced its intent on integrating artificial intelligence, human resources, and green transition into its development policies. The two parties also emphasized that the World Economic Forum’s annual meeting, which is being held under the theme “Collaboration for the Intelligent Age,” confirms the importance of developing the platform. By joining the “Strategic Intelligence Platform,” Mongolia will gain access to more than 400 articles from international scientific and think-tank organizations and 4,000 research works by scientists and researchers, enabling the use of this knowledge to analyze current economic and industrial conditions and forecast future trends. This AI-based advanced platform is expected to enhance the strategies and planning of governmental institutions, increase public sector productivity, and positively influence decision-making processes.

The World Economic Forum has been developing the “Strategic Intelligence Platform” for the past 10 years, and Mongolia is now the second country to implement this project.

The Mineral Resources Expert Council under the Ministry of Industry and Mineral Resources of Mongolia held its expanded meeting for 2024 on January 16, 2025. At the meeting, the Council approved the technical and economic feasibility study amendment for utilizing the in-situ leach mining method in Zuuvch Ovoo and Dulaan Uul uranium deposits in Ulziit soum, Dornogobi aimag.

The project plans to carry out construction activities from 2025 to 2028, with production operations running from 2028 to 2060, and mine closure and monitoring scheduled for 2060-2070.

Once implemented, the project is expected to produce an average of 2,500 tons of uranium annually. It also plans to allocate USD 329.06 million for mine closure and reclamation, create 795 jobs, attract USD 1.67 billion in total investment, and contribute USD 4.6 billion to the state and local budgets over its duration.

This project is one of the 14 mega projects outlined in the Government’s Action Program for 2024-2028 and represents the second-largest foreign investment agreement signed with a third-neighbor by the Government of Mongolia. In addition to direct economic and social impacts, such as increasing foreign investment, boosting state and local revenues, creating jobs, and introducing new technologies, the project is important for introducing a new type of export-oriented mineral within the mining sector.

Miner and commodity trader Glencore said it is open to M&A transactions that create value for its shareholders, leveraging its position as a top three global copper producer.

“As we have always said, M&A is something we are good at and we are always open to do transactions that are value-accretive for the company,” a Glencore spokesperson said.

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Potential M&A deals were the chief preoccupation for investors in the sector in 2024, but BHP’s $49 billion failed bid for Anglo American in May showed the difficulty of combining diversified producers.

Glencore made an approach to Rio Tinto late last year with a proposition to merge the two mining companies but talks did not progress, according to two sources close to the matter. Neither company has commented on any talks.

The spokesperson would not comment on the reports.

Rio Tinto would benefit from more copper production through a deal with Glencore, but the world’s second-largest miner had questions around how much it would have to spend and its culture compatibility with the Swiss company, a third source with direct knowledge of the matter said.

“Glencore is a trader… and their operating assets are nothing but a captive source of material for them to trade against. The culture clash would be quite something… but any deal can be done at the right price,” said Abel Martins Alexandre, previously a Rio Tinto treasurer and a former managing director at Lloyds Bank.

For example, Martins Alexandre said if Glencore had Rio Tinto’s portfolio they may believe they could make more money out of trading the materials that Rio Tinto produces than Rio Tinto does alone, as this is not a trading entity.

Mining companies are racing to expand copper output, with demand poised to jump from use for energy transition applications such as solar panels, electric cars and data centres for artificial intelligence.

At the same time, major producers are wary of paying hefty premiums that could put pressure on their balance sheets and irritate shareholders.

Glencore produces more than one million metric tons of copper a year, outpacing Rio’s output by up to 40%.

Glencore’s valuation is cheap compared with peers, analysts say, and its share price lost 25% of its value in 2024. Diversified miners BHP and Rio Tinto’s London shares lost 21% and 19% respectively, while Anglo’s shares rose 20%.

Glencore’s coal operations will be perceived as a “poison pill” for other companies’ shareholders, said Martins Alexandre.

While most Western miners have sold assets of the carbon-intensive fossil fuel, Glencore has remained an industry outlier, amassing more of it over the past few years.

Cash deals

Reuters reported last year that Glencore had also been studying a potential combination with Anglo American after BHP’s approach emerged. The company declined to comment.

Its 2023 failed attempt to acquire Teck Resources for $23 billion meant it had to settle for 77% of the steelmaking coal assets that the Canadian miner intended to spin off anyway.

Teck, now mainly a copper miner with a market capitalization of $22 billion, would cost much more today.

Glencore is still hopeful that talks may restart with Rio Tinto, one of the sources with direct knowledge of the matter said. Glencore’s spokesperson declined to comment.

The company has always had an acquisitive strategy, but in recent years it has increasingly relied on cash for deals, reflecting management’s belief that the company’s stock is undervalued, RBC Capital Markets analyst Ben Davis said.

Some institutional shareholders said they would be happy for companies like Glencore or Anglo American to be sold to bigger miners for premiums above 30%.

They see synergies in overheads reduction, or use of same infrastructure facilities at adjacent mines, for example.

Other shareholders are however sceptical of big M&A for the mining sector, and executives are not “going to push the boundary”, as none of the portfolios are perfect and some assets are more desirable than others, a mining banker said.

(By Clara Denina, Pratima Desai, Felix Njini and Andres Gonzalez Estebaran; Editing by Veronica Brown and Susan Fenton)

According to the latest data released by the National Statistics Office, the industrial sector recorded a robust performance in 2024, with total industrial production increasing by five percent compared to the previous year. The total production was estimated at 32.2 trillion MNT, a growth of 1.5 trillion MNT year-on-year. This increase was primarily driven by expansions in the mining, quarrying, and energy sectors.

Production in the mining and extractive industries reached 22.8 trillion MNT in 2024, which was 1.2 trillion MNT, or 5.7 percent, higher than the previous year. The growth in this sector was largely attributed to hard and lignite coal mining, which increased by 834.7 billion MNT, or 8.8 percent, and metal ore mining, which rose by 509.1 billion MNT, or 4.9 percent. The electricity, gas, steam, and air conditioning sector also demonstrated significant growth, with production increasing by 191.2 billion MNT, or 10.2 percent.

In terms of physical volume, the production of copper concentrate, enriched coal, iron ore, zinc concentrate, fluorspar and iron ore concentrate increased by 12 percent to 50.6 percent year-on-year. However, the production of silver concentrate, unrefined gold, oil and fluorspar declined, showing decreases of five percent to 32.5 percent. In the processing industry, the output of key products such as lime, coal briquettes, liquid milk, beverages, cement and beef grew by 0.6 percent to 15.1 percent. On the other hand, products including pure alcohol, flour, cashmere knitwear, cathode copper and combed cashmere saw declines ranging from 4.2 percent to 46.3 percent.

The sales of industrial products in 2024 reached 50.4 trillion MNT, reflecting an increase of 6.6 percent, or 3.1 trillion MNT, compared to the same period in the previous year. Sales in the mining and extraction sector rose by 2.7 trillion MNT, or 7.5 percent, while the energy sector recorded a sales increase of 185.5 billion MNT, or 9.9 percent.

Preliminary data indicates that 36.2 trillion MNT worth of industrial products were sold in foreign markets. Of this, 60 percent came from coal mining, 35.6 percent from metal ore mining, 3.1 percent from oil mining, and 1.3 percent from other mineral mining sectors.