Major Strategic Sector Projects to Be Implemented in Cooperation with World Bank www.montsame.mn

The World Bank, in cooperation with the Government of Mongolia, is successfully implementing transmission line projects aimed at ensuring energy security.
Looking ahead, it is essential to implement energy sector projects and infrastructure initiatives to ease congestion in the capital city through public-private partnerships, as these will serve as key drivers of economic growth. This was emphasized by First Deputy Prime Minister and Minister of Economy and Development Enkhbayar Jadamba during his meeting with Tae Hyun Lee, the World Bank’s Resident Representative in Mongolia.
According to the Ministry of Economy and Development, the two sides exchanged views on priority areas within Mongolia’s medium- and long-term development policies and agreed to ensure intersectoral coordination and to cooperate promptly at the technical level on specific projects.
During the meeting, the parties discussed reforms in strategic sectors that support economic growth, including energy, road transport, and infrastructure, as well as the policies and programs to be implemented in these areas. 
First Deputy Prime Minister Enkhbayar Jadamba underscored the importance of attracting private sector investment to successfully advance sector liberalization and proposed cooperating through innovative instruments, such as World Bank financial guarantees, to strengthen investor confidence and share risks.
World Bank Resident Representative Tae Hyun Lee reaffirmed the institution’s active cooperation with Mongolia in improving the energy sector, agriculture, information technology, and the investment environment, noting that the cooperation directions proposed by the First Deputy Prime Minister align with the strategic partnership between the two sides.
He also commended the establishment of the Investor Protection Center by the Ministry of Economy and Development and expressed support for policies aimed at improving the business environment and assisting investors.
As Mongolia’s construction and industrial activities continue to expand, leading to growing energy demand, the World Bank expressed its readiness to cooperate in supporting initiatives included in Mongolia’s Five-Year Basic Development Plan for 2026–2030.

Government Approves New Administrative Building at Ulaanbaatar International Airport www.montsame.mn

At its meeting on February 4, 2026, the Government approved amendments to the concession agreement for the management project of Ulaanbaatar’s new international airport, allowing for the construction of an additional administrative building and the expansion of the airport’s parking facilities.
The build–operate–transfer concession agreement for the management of Ulaanbaatar’s new international airport was signed on July 5, 2019, between the National Development Agency, representing the Government of Mongolia, and New Ulaanbaatar International Airport LLC. The concessionaire has submitted a proposal to construct an administrative building within the airport concession area and to expand the parking lot by an additional 250 spaces.
At present, all office space in the passenger terminal building has been fully leased.

Mongolia’s Crisis Is an Opportunity to Transform Its System www.jacobin.com

On paper, the Mongolian state is becoming richer, with record exports, higher budget revenues, and decent rates of growth. Yet in daily life, it feels absent. Six years after winter protests that fused discontent over air pollution and corruption into a single story about trust or the lack of it, that story has only thickened.
Since then, Mongolia has moved from outrage over theft of public resources to open constitutional crisis. In October of last year, parliament voted to remove Prime Minister Zandanshatar Gombojav barely four months into his term.
Three days later, the president vetoed the dismissal on constitutional grounds. Tsets, Mongolia’s constitutional court, deemed the president’s veto lawful, ruling that a parliamentary motion passed by the State Great Khural to dismiss the PM violated several procedural and constitutional principles.
If Western media outlets notice any of this, they tend to reach for the easy frame. Earlier in 2025, Britain’s Times ran a breathless piece about a “Putin-aligned” President who had supposedly orchestrated a coup of sorts against a US-educated reformist prime minister, Oyun-Erdene Luvsannamsrai. That story missed the point.
Mongolians themselves didn’t read the crisis that way. They watched as food, fuel, and rent grew more expensive while politicians flaunted imported SUVs and designer-brand watches. They saw “anti-corruption” hearings that always seemed to stop just short of the people who designed the schemes.
If there was a coup, it didn’t take place over a single night in Ulaanbaatar. It was a much slower takeover, organized through coal contracts, logistics queues, and parliamentary lists.
From Party-State to Ponzi Investment Scheme
In theory, Mongolia is a parliamentary democracy with a democratic constitution, the separation of powers, and institutions that look very familiar to anyone raised on the liberal textbook: parliament, president, cabinet, anti-corruption agency, independent central bank. In practice, politics has settled into what many people now call nam–tör: a party-state hybrid where the ruling (MPP) controls most levers of power.
Mongolia has moved from outrage over theft of public resources to open constitutional crisis.
Getting onto the party list or into a key ministry is understood — quite openly at this point — as a form of höröngö oruulalt, an investment. You finance the campaign, you prove your loyalty, you tsunh barih (“carry the bag”) for a faction leader. In return, you gain access to procurement, licenses, appointments, a slice of a mega project. The formal rule book still exists: civil service law, budget law, procurement procedures. But next to it sits an unwritten code of factional obligations and side deals.
This is why so many Mongolians have stopped using the word “corruption” in the narrow sense. Corruption suggests a deviation from a basically sound system. What they see instead is a system where rent-seeking is the organizing principle and patron-client networks penetrate bureaucracies and political parties while fragmenting and undermining formal authority.
Cleaner Prices, Dirtier Deals
Nowhere does this manifest itself more starkly than when it comes to coal and related offtake agreements. In a typical offtake contract, a buyer agrees to purchase a specified amount of a future product (coal, in this instance) before it is produced. These contracts are extremely attractive for resource-rich developing countries like Mongolia, as it means guaranteed revenue streams.
However, recent revelations show that millions of tons of coal have been sold through these types of agreements to Chinese companies. These were opaque deals, mostly done with Erdenes Tavan Tolgoi (ETT) and signed with a small circle of traders and logistics firms. ETT is a state-owned enterprise (SOE) that manages the Tavan Tolgoi coal deposit, one of the world’s largest. It is a key contributor to the nation’s economy through its mining, exporting, and infrastructure projects.
After mass protests in winter 2022 over what people called the “coal theft,” the government scrambled to show it was cleaning up the sector. The solution looked simple enough: push exports through an open auction platform at the Mongolian Stock Exchange and let the market set transparent prices.
After mass protests in winter 2022 over what people called the ‘coal theft,’ the government scrambled to show it was cleaning up the mining sector.
To an extent, it worked. Prices on the exchange moved closer to what Chinese buyers actually pay at the border. A new Mining Products Exchange law was passed. Officials proudly presented this as a leap forward for transparency.
However, if you scratch the surface, most of the coal never touches that exchange. According to Zoljargal, a member of the Mongolian parliament, roughly four-fifths of coal still leaves the country via long-term offtake contracts.
The transparency-oriented auctions at MSE mostly receive the leftovers in terms of lower-grade coal with unpredictable volumes. The public sees a visible price, but the real bargain happens out of sight.
The Aggregator as Switchboard
Offtake contracts, especially those tied to infrastructure or prepayments, help preserve strategic discretion. One company, Bodi International, sits at the heart of many of these arrangements. When you look at a large batch of contracts related to Bodi International and ETT that was recently released to the public, you can start to see the picture.
Many politicians and experts claim that these deals through aggregators like Bodi allowed coal to be sold at undervalued prices, with intermediaries capturing some of the value on transport and resale. Some contracts include options to convert debt into equity stakes.
The public sees a visible price, but the real bargain happens out of sight.
If the state or SOE cannot fully deliver coal later, the lender can swap the unpaid amount for shares in the project company or infrastructure. This allows the buyer (offtaker) to gain stakes in infrastructures, effectively collateralizing the state’s assets.
Other SOEs and related clientelist networks compete to export as much coal as possible. The trend reached its apogee when one faction started lobbying for a railroad and another for a border port. It is a downward spiral that traps value.
Layer on top of this barter‑style financing of infrastructure deals repaid in coal, and we can start to see the main contours of the “coal theft” or “coal mafia.”
Clientelism as Infrastructural Power
During the COVID-19 pandemic, exports collapsed, and the difference between shipping first and waiting two weeks meant real gains in terms of cash and leverage. ETT’s delivery prioritization effectively handed faction leaders and clientelist networks leverage over the logistics queue.
Choosing which ton got through which border gate and when was the hardest form of currency. Reports confirm that border customs, military officials, and provincial administrators extracted rents or favored their cronies. Trucking firms tied to political elites thrived, while ordinary truckers and businesses had to wait with their vehicles standing still.
The state doesn’t disappear, but it fractures. Authority is still there, chopped up into tradable fragments.
Sociologists like Michael Mann talk about infrastructural power — the state’s ability to “get into” territory and everyday life through roads, rails, and electricity. In Mongolia, that power has been sliced up and rented out or, in other words, captured.
A rail line or a border port like Gashuun Sukhait becomes not just a public utility but a bargaining chip. A power struggle ensues around which faction gets the lucrative bit to build, which firm gets priority access, or which official gets to hand out permits.
In this state of things, the state doesn’t disappear, but it fractures. Authority is still there, chopped up into tradable fragments.
Two Budgets, One Shadow
To “get things done,” the Mongolian government pushes delivery through a hundred or so SOEs like ETT that circumvent the bureaucracy. Offtake contracts pledge future coal deliveries in exchange for upfront cash. Infrastructure loans are backed not by general tax revenues but by specific streams of export earnings.
There are escrow accounts abroad where export proceeds sit before they are swept (or not) into the national treasury. Oil-exporting countries often have dual fiscal systems that feature substantial distortions between their resource and nonresource tax regimes, and Mongolia is no exception to this rule.
Citizens sense that the budget is growing, yet crucial services are still undelivered.
In public finance terms, this reallocates power away from the budget, producing parallel fiscal structures. The formal one looks normal, rule‑bound, and slow, while the informal one seems flexible, politicized, and largely off the books.
When global prices spike, the second set of channels becomes very tempting. You can borrow against tomorrow’s coal to cover today’s political needs. You can fund that new railway or engage in “populist” cash transfers just before an election without going through a messy, contested budget process.
The promise of long-term revenues etched in offtake contracts can make unaccountable governments persevere by promising spoils to clientelist factions, expanding the state budget, and effectively buying votes. Citizens sense that the budget is growing, yet crucial services are still undelivered.
Every new scandal proves the unfortunate state of things. Political scientists refer to this as the erosion of output legitimacy that derives from a polity’s capacity to solve collective problems. Citizens would say the state no longer makes any moral sense.
Slow Violence, Not Sudden Collapse
This is where the idea of slow violence helps. Rob Nixon’s concept refers to gradual, often invisible harm that unfolds over the course of years, wrought by pollution, climate change, and resource depletion.
In Mongolia, the coal economy has created exactly this sort of damage: dust and diesel in border towns, fragile ecosystems around mines, and the deaths of people from coal burning. As Nixon notes, environmental devastation often happens on “time scales that exceed human perception,” making it hard for communities to rally against diffuse, long-term threats.
The violence is political and emotional as well as ecological. The state promises universal education but crams classrooms with fifty children because schools are the last in line for wage increases. Anti-corruption hearings are broadcast throughout the country, but investigations routinely stall when they get too close to the inner circle.
Laws change, cabinets shift, and new anti-corruption bodies appear, yet the basic pattern remains the same.
People stop believing in the possibility of fairness long before they stop voting. Crucially, the victims of slow violence are often poor and marginalized, lacking influence in Ulaanbaatar’s halls of power.
On the ground, citizens experience this not as a democratic consolidation but as a strange kind of institutional gaslighting. Everything is “reforming,” everything is being “strengthened,” yet nothing quite works. The gust remained the same: weakening the presidency here, strengthening a prime-ministerial system there, always making sure the dominant party and related factions could consolidate.
Laws change, cabinets shift, and new anti-corruption bodies appear, yet the basic pattern remains the same. “If justice were applied consistently tomorrow,” people joke, “there would be no one left in politics.”
Protests as Democratic Memory
Despite all this, people haven’t gone quiet. In 2019, Ulaanbaatar saw the winter protests over suffocating smog and unending scandals. In 2022, younger protesters camped out again, demanding answers on coal theft. Over the last two years, further demonstrations erupted around the latest government reshuffles, the lavish spending of political circles, and coal theft.
Critics dismissed these protests as either the product of manipulation by some rival faction or as the product of naive idealism on the part of some young slackers. Both dismissive perspectives miss the core function of such protests.
Each protest, even when it fails or succeeds to change the personnel at the top, acts as a kind of democratic memory. It reminds everyone that the point of having a state at all is to deliver public goods and basic fairness. It keeps alive the expectation that something better is possible and that institutions could be inclusive rather than extractive.
Elite Brokerage Amid Global Uncertainty
Under these conditions, Mongolia’s political economy functions through elite brokerage. This is a system in which those with political power act as intermediaries between national wealth and global markets, skimming rents at each step.
Such brokerage is not limited to coal. In the copper sector, Mongolia’s Erdenet mine was previously involved in scandals where trading companies received sweetheart deals for copper concentrate, allowing the diversion of profits.
The state behaves like a brokerage house, instead of being a regulator and shareholder ensuring maximum public benefit.
Even the giant Oyu Tolgoi copper-gold mine, operated by Rio Tinto, saw disputes over cost overruns that Mongolian observers suspect benefited contractors connected to the elite. In all these cases, the state behaves like a brokerage house, instead of being a regulator and shareholder ensuring maximum public benefit.
This state of affairs obviously has grave implications for democracy and development in Mongolia. In the June 2024 parliamentary elections, the opposition galvanized “anger over corruption and the state of the economy,” making significant gains in the legislature. Voter turnout remained high at nearly 70 percent, indicating that Mongolians have not become apathetic. Clearly, the electorate connected the dots between unchecked one-party rule, corruption, and the erosion of democratic accountability.
Hollowing Out Democracy
All these threads tie back to a worrisome trajectory that Peter Mair outlined more than a decade ago: the hollowing out of democracy. This has happened not through the outright abolition of elections but by a gradual erosion of their substance.
Mongolia’s situation exemplifies what happens when a resource-rich economy’s development model centers on extraction without “inclusive” institutions. However, it is easy, from a distance, to say that Mongolia just needs to strengthen its institutions. While intuitively this sounds right, it doesn’t get us very far. The harder question is always: Which institutions, in what order, and strengthened against whom?
Sustained pressures for reform will only last if people can see something actually shifting. That is the cruel paradox at the heart of slow violence: not only does it damage lungs, it also erodes patience. Year after year of scandals with no real consequences conditions people to expect nothing.
In that void, many ills arise: conspiracy theories, nationalist groups, and online, troll-based politicization among others. Yet the current crisis creates an opportunity for the masses to step into the void and demand a new voice. Whether ordinary Mongolians can successfully take advantage of this opportunity will define the nation’s journey toward genuine accountability and democracy.
By
Sanchir Jargalsaikhan

Mongolia's central bank buys 1.9 tonnes of gold in January www.xinhuanet.com

Mongolia's central bank bought 1.9 tonnes of gold from legal entities and individuals in January 2026, up 50.2 percent year on year.
As of January, the Bank of Mongolia's average gold purchase price stood at 539,587.33 Mongolian tugriks (about 151.3 U.S. dollars) per gram, the bank said in a statement on Thursday.
Purchasing gold is one of the key ways for the central bank to ensure the country's economic stability by consistently increasing foreign currency reserves.
According to the central bank, Mongolia's foreign exchange reserves hit a record high of 7 billion U.S. dollars by the end of 2025.

Team Mongolia is gearing up to be the most fashionably warm at the 2026 Winter Olympics. Here's why www.creators.yahoo.com

Erdene Raises $28.7 Million to Accelerate Mongolian Copper-Gold Expansion www.tipranks.com

Erdene Resources ( ERD -8.61% ▼ ) has issued an update.
Erdene Resource Development Corp. has closed a bought deal private placement of 3.23 million common shares at $8.90 per share, raising gross proceeds of approximately $28.7 million, including full exercise of the underwriters’ option. The funds will be used to accelerate development across the Khundii Minerals District, notably advancing the Khuvyn Khar copper discovery and the Zuun Mod molybdenum-copper deposit, as well as supporting exploration, technical studies, target evaluation, and general corporate purposes, while production ramps up at the Bayan Khundii Gold Mine. The financing, conducted under Canada’s listed issuer financing exemption and still subject to final TSX approval, strengthens Erdene’s capital position and supports its strategy to grow its operations and land holdings in a highly prospective mineral region, although insider participation in the offering triggered related-party transaction rules that the company addressed through available exemptions.
The most recent analyst rating on ERD -8.61% ▼ stock is a Hold with a C$8.50 price target. To see the full list of analyst forecasts on Erdene Resources stock, see the TSE:ERD Stock Forecast page.
Spark’s Take on TSE:ERD Stock
According to Spark, TipRanks’ AI Analyst, TSE:ERD is a Neutral.
The score is held back primarily by weak financial performance: no revenue, widening losses, and continued negative operating/free cash flow despite a low-leverage balance sheet. Technicals provide a meaningful offset with price above key moving averages and positive MACD/RSI momentum. Valuation remains a risk signal because the negative P/E reflects ongoing losses and there is no dividend yield support.
To see Spark’s full report on TSE:ERD stock, click here.
More about Erdene Resources
Erdene Resource Development Corp. is a Canada-based resource company producing gold from the high-grade, low-cost Bayan Khundii Gold Mine in Mongolia. The company holds a portfolio of precious and base metal projects in the underexplored Khundii Minerals District, focused on expanding production and exploration around its flagship operation.
Average Trading Volume: 175,996
Technical Sentiment Signal: Buy
Current Market Cap: C$495.6M

Hungarian OTP Bank Expresses Interest in Operating in Mongolia www.montsame.mn

Speaker of Parliament Uchral Nyam-Osor and Governor of the Bank of Mongolia Narantsogt Sanjaa held an online meeting with representatives of the Hungarian commercial bank OTP on February 4, 2026.
During the meeting, OTP Bank expressed its interest in operating in the Mongolian banking sector if the Banking Law of Mongolia is revised to reflect current demands, and the regulatory environment for investment is clarified. Specifically, the Hungarian bank’s side stated that with the condition that certain legal revisions are adopted regarding per-investor limitations, overgeneralized regulations, and policy risks, strategic investment is fully possible.
Furthermore, the bank presented its international operations, investment strategies, market valuations, and financial products and services. The 75-year-old OTP Bank, listed on the stock exchange, is the largest commercial bank in Hungary, operating through 1,206 branches in 11 countries in Central and Eastern Europe. By the end of the third quarter of 2025, the bank’s total equity stood at USD 115.2 billion, whereas the total loan portfolio was worth USD 60 billion. As for the structure, international investment funds own 55 percent of the total shares, whereas the remaining 45 percent is held by domestic investors.
Speaker Uchral noted that to ensure sustainable economic growth, the legal reform proposed by the parliament prioritizes limiting excessive state intervention and expanding the private sector. Emphasizing his support for intensifying the banking sector reform and the entry of foreign investors into the domestic market, the Speaker received the OTP Bank’s proposal positively. In addition, Speaker Uchral stated that the revisions to the Banking Law will be discussed at the spring session of parliament, and that significant focus will be paid to refining the relevant legal environment.

Oyu Tolgoi: Mongolia’s High-Stakes Clash With Rio Tinto www.thediplomat.com

15 years of tensions over the massive copper mine boiled over in December 2025. Can Mongolia and the mining giant reach a resolution?
Located in Mongolia’s South Gobi Desert, the Oyu Tolgoi copper-gold mine has long stood as a paradox. The project hailed as the cornerstone of Mongolia’s economic modernization has simultaneously festered into a decades-long battle over sovereignty, fairness, and shared prosperity.
For 15 years, the mine – one of the world’s largest undeveloped copper deposits – has pitted the Mongolian state against Rio Tinto, the Anglo-Australian mining giant that holds a 66 percent stake in, and operational control over, the site. The tension reached a boiling point in December 2025, when two seismic developments reshaped the landscape: a Russian court ordered Rio Tinto to pay $1.32 billion in damages, and Mongolia’s State Great Khural unanimously adopted a resolution mandating sweeping changes to protect national interests in the project.
These events have reignited fundamental questions about a partnership forged in the aftermath of the global financial crisis, when Mongolia lacked bargaining power. Rather than a simplistic case of corporate exploitation or nationalist overreach, Oyu Tolgoi should be viewed as the messy reality of an “obsolescing bargain” – a dynamic where host nations gain leverage as investments mature, while multinationals cling to contractual certainty. 
For Mongolia, the stakes are existential: Oyu Tolgoi accounts for 30 percent of its exports and billions in state revenue in the near future. For Rio Tinto, the mine is similarly irreplaceable: a linchpin in its strategy to supply copper for the global energy transition. The conflict, then, is not a zero-sum game, but a test of whether two interdependent parties can recalibrate a flawed framework to serve both sovereign dignity and commercial viability.
The Origins of an Uneven Bargain
The legal and financial architecture of Oyu Tolgoi was cemented in two agreements: the 2009 Investment Agreement and the 2011 Shareholders’ Agreement. Negotiated amid Mongolia’s post-financial crisis vulnerability, the deals granted Rio Tinto extraordinary concessions: tax stability for decades, priority in recovering capital costs, and near-total operational autonomy. Mongolia secured a 34 percent stake through its state-owned enterprise Erdenes Oyu Tolgoi LLC, but the terms deferred meaningful dividends until Rio Tinto recouped its investments – an arrangement that has left the country waiting for its fair share as the mine’s value soars.
Surface mining began in 2013, but the deposit’s true wealth – 31 million tons of copper and 13 million ounces of gold – lies underground. After years of delays and disputes, underground production finally launched in 2023, following a 2022 settlement between Ulaanbaatar and Rio Tinto. By 2025, the project’s total capital expenditure had surpassed $26 billion, with output surging. Copper production rose 61 percent year-on-year, and gold 121 percent. 
For Mongolia, the mine provided $660 million in taxes and fees in 2025 alone. That adds up to cumulative state revenue of $5.5 billion since 2010, plus some $2.4 billion in domestic procurement. Yet these gains are overshadowed by a lopsided debt structure: $16.3 billion of Oyu Tolgoi’s $20.2 billion in debt consists of shareholder loans from Rio Tinto, with interest rates that Mongolian policymakers and civil society have long criticized as above market norms.
Rio Tinto defends the terms, framing shareholder loans as a standard financing tool for megaprojects that carry “full financial risk” during exploration and construction. In a December 2025 submission to Mongolia’s parliamentary oversight committee, Oyu Tolgoi LLC emphasized that such loans are “long-term, unsecured, and provided without collateral,” arguing that direct comparisons to Mongolia’s sovereign debt or short-term international bonds are “inconsistent with international standards.” 
The company also claims that Mongolia’s total share of benefits – including taxes, royalties, and dividends – already stands at 61 percent, far higher than the 37 percent cited by parliamentary experts. But for many Mongolians, these figures ring hollow. The state has yet to receive significant dividends, while Rio Tinto’s cumulative negative cash flow of $11 billion (as of September 2025) masks the long-term value it stands to gain from an 80-year productive asset.
The 2025 Turning Points: Legal Risk and Sovereign Assertion
December 2025 marked a pivotal shift in the debate, driven by two unrelated but mutually reinforcing events. On December 10, Russia’s Kaliningrad Arbitration Court ordered Rio Tinto to pay 104.75 billion rubles ($1.32 billion) to RUSAL, the Russian aluminum giant, over Rio’s 2022 seizure of RUSAL’s 20 percent stake in Queensland Alumina Limited (QAL) amid Australian sanctions on Russia. While the case does not involve Oyu Tolgoi directly, it named Rio Tinto subsidiaries that own the Oyu Tolgoi stake, casting a legal cloud over the mine’s ownership structure.
Rio Tinto swiftly rejected the ruling, stating it “will vigorously defend against it” and noting that Australian courts had already upheld its compliance with sanctions. In a December 15 statement shared with this author, the company emphasized that the Russian judgment “relates to Australian sanctions and has no bearing on Oyu Tolgoi’s operations.” 
Yet the ruling has eroded Rio’s narrative of legal invincibility – a particularly sensitive point as Mongolia scrutinizes the company’s adherence to local laws. For Ulaanbaatar, the decision underscored a broader concern: that multinational corporations may prioritize geopolitical compliance with Western sanctions over their obligations to host nations.
More than two weeks later, on December 26, Mongolia’s State Great Khural adopted Resolution No. 120 with an 81.2 percent majority (69 votes in favor). The landmark piece of legislation mandates sweeping reforms to Oyu Tolgoi’s governance. The resolution, born from months of public hearings and a special parliamentary inspection, reflects deep public frustration – a big portion of Mongolians surveyed in December 2025 believe the country receives an unfair share of Oyu Tolgoi’s benefits. 
The new resolution calls for reviewing (and potentially revoking) two contested mining licenses at the larger Oyu Tolgoi site (Shivee Tolgoi and Javkhlant) held by Rio Tinto partner Entrée Gold. It also demands renegotiations of the 2011 Shareholders’ Agreement to lower Rio’s loan interest rates and guarantee Mongolia a 53 percent benefit share (the original 2010 target), while channeling Oyu Tolgoi’s export revenue through Mongolia’s central bank and commercial banks for transparency. Finally, the resolution calls for investigating corruption allegations against Oyu Tolgoi and Rio Tinto (suspicions that the firm says are “unfounded”) and boosting geological exploration to expand Oyu Tolgoi’s reserves.
The resolution is a bold assertion of sovereign will, but it comes with risks. Rio Tinto has historically resisted unilateral changes to agreements, warning that they could deter foreign investment or trigger arbitration at the International Center for Settlement of Investment Disputes (ICSID). In a January 2026 statement provided to this author, Oyu Tolgoi LLC acknowledged the importance of “constructive engagement” but emphasized that public hearings had included “inaccuracies” that it had not been given time to address.
The company’s December 17 submission to parliament further argued that the Investment Agreement already covers the Javkhlant and Shivee Tolgoi licenses, and that its feasibility studies have been updated in compliance with Mongolian law – contradicting parliamentary claims that the project has operated “without an approved feasibility study for the past 10 years.”
The Core Fault Lines: Law, Finance, and Trust
The Oyu Tolgoi dispute hinges on four interconnected tensions, each amplified by the December 2025 developments: legal compliance, financing fairness, resource sovereignty, and transparency.
First, legal alignment remains a flashpoint. Parliamentary experts have accused the Investment and Shareholders’ Agreements of violating Mongolian law – including provisions on board voting rights, share transfer rules, and the primacy of the company charter. 
Oyu Tolgoi LLC vehemently disputes this, arguing the agreements were negotiated “under public and parliamentary oversight” and comply with the laws in force at the time. The company noted that Mongolia’s 2006 Minerals Law explicitly permitted investment agreements to “maintain stable conditions for investors,” and that board provisions were agreed upon under the Civil Code’s “principle of freedom of contract.” For Mongolia, however, the issue is not just past compliance but present relevance. As its legal framework evolves (including the 2019 constitutional amendment defining “benefits” for resource projects), Mongolia thinks past agreements must adapt to reflect current sovereign priorities.
Second, financing terms are a visceral grievance. Mongolia’s parliament and civil society argue that Rio Tinto’s shareholder loan interest rates – reportedly 3-6 percentage points above market rates – unfairly delay dividends and shift risk to the joint venture. Oyu Tolgoi LLC counters that such rates reflect “project-specific and country-specific risks,” including Mongolia’s credit rating, political uncertainty, and the mining sector’s long payback periods. Negotiations between the shareholders to reduce rates are ongoing, but progress has been glacial – highlighting the imbalance of power that persists despite Mongolia’s growing leverage.
Third, the Oyu Tolgoi mine has become a symbol of resource sovereignty, which  in turn lies at the heart of national identity. Mongolia’s ambition to raise its stake to 51 percent or more is rooted in a belief that its natural resources should serve its people first. 
The Javkhlant and Shivee Tolgoi licenses have become a symbol of this fight: parliament views Entrée Resources’ control as a barrier to full development, while Oyu Tolgoi LLC insists the licenses are geologically inseparable from the main mine and can only be developed using existing infrastructure. The company warns that delaying their integration “adversely affects the mine plan and cost projections,” but Mongolians see this as yet another example of foreign corporations dictating terms over their sovereign assets.
Fourth, transparency deficits have eroded public trust. While Oyu Tolgoi LLC publishes tax and fee payments, civil society and parliament have raised concerns about transfer pricing, cost allowances, and the lack of clarity on how “benefits” are calculated. The company’s claim that Mongolia’s share of the benefits stands at 61 percent clashes with parliamentary estimates of 37 percent, reflecting differing definitions of what constitutes “benefits” (e.g., whether VAT paid through suppliers or social insurance contributions should be included). 
The new resolution’s transparency mandates aim to bridge this gap, but success will depend on independent verification – something Rio Tinto has not always embraced.
The Silence of Stakeholders: What Non-Responses Reveal
The aftermath of December’s developments has been marked by striking contrasts in stakeholder engagement. Rio Tinto and Oyu Tolgoi LLC responded promptly to inquiries, providing formal statements and referencing their submissions to parliament. But other key actors – including Mongolia’s government, parliamentarians, and Russia’s Kaliningrad Arbitration Court – have remained silent. This silence speaks volumes. For Mongolia’s leaders, it may reflect a desire to avoid escalating tensions before negotiations with Rio Tinto begin in earnest. For the Russian court, it underscores the case’s geopolitical sensitivity: a ruling targeting a Western multinational, even over an Australian asset, risks complicating Russia’s relations with Mongolia, a country it seeks to maintain as a strategic partner.
The lack of response from Mongolia’s government is particularly notable given the resolution’s mandate to implement reforms within months. Prime Minister Zandanshatar Gombojavyn’s administration faces a delicate balancing act: asserting national interests without triggering a backlash from Rio Tinto, which could halt funding or pursue arbitration. The government’s recent moves to secure loan and financial cooperation with the European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB) – efforts that were approved alongside the Oyu Tolgoi resolution – suggest it is preparing for a potential showdown, diversifying its financial partnerships to reduce reliance on Rio Tinto.
Toward a Shared Victory: The Path Forward
This is a battle that neither side can “win” at the expense of the other. Mongolia cannot afford to alienate Rio Tinto entirely: the company’s technical expertise and capital are still needed to maximize the mine’s value, and arbitration could drain state resources for years. Rio Tinto, meanwhile, cannot afford to ignore Mongolia’s demands: public anger is at a fever pitch, and the Russian court ruling has exposed its vulnerability to legal risks in geopolitically complex regions. The company’s future in the energy transition – dependent on securing stable supplies of copper – depends on its ability to rebuild trust with host nations.
A sustainable solution must address three core needs: fairer financing, enhanced sovereignty, and transparency and accountability. 
First, a modest reduction in shareholder loan interest rates, aligned with current market conditions, would accelerate dividend payments to Mongolia without undermining Rio Tinto’s returns. This is a compromise both sides can accept – Mongolia gains faster access to revenue, while Rio Tinto preserves the project’s viability.
Second, both sides could work out a phased pathway for Mongolia to increase its stake to 51 percent as capital costs are recovered, coupled with joint control over key decisions (e.g., license integration, exploration plans). This would honor Mongolia’s desire for ownership while giving Rio Tinto certainty over the transition.
Finally, there should be independent audits of benefit calculations, public disclosure of cost allowances and transfer pricing, and a joint committee with equal representation from Mongolia and Rio Tinto to oversee compliance. This would rebuild public trust and reduce the risk of future disputes.
Such a compromise would not satisfy hardliners on either side. Nationalists in Mongolia will demand full control, while Rio Tinto shareholders may resist concessions that reduce short-term profits. But it is the only path to a “win-win” outcome: Mongolia secures its sovereign right to a fair share of its resources, and Rio Tinto gains the stability it needs to operate the mine for decades to come.
Conclusion
Oyu Tolgoi is more than a mine – it is a test case for how resource-dependent democracies can assert their interests in an era of global capital. Mongolia’s December resolution is a milestone in this journey, proving that small nations can rewrite the rules of engagement with multinational corporations. Rio Tinto’s willingness to negotiate (albeit reluctantly) shows that even the largest firms must adapt to changing expectations of corporate responsibility.
The Russian court ruling, while tangential to Oyu Tolgoi’s operations, has added a geopolitical wildcard: it reminds Rio Tinto that its actions in one part of the world can have consequences elsewhere, and that Western sanctions cannot insulate it from legal risks in non-Western jurisdictions. For Mongolia, this is a strategic opportunity to leverage Rio Tinto’s vulnerability to secure better terms.
In the end, the real winner will not be Mongolia or Rio Tinto alone, but the principle that resource partnerships must be based on equity, transparency, and mutual respect. If Oyu Tolgoi can evolve into such a model, it will provide a blueprint for other nations grappling with similar conflicts – from Zambia’s copper mines to Peru’s lithium projects. If not, it will remain a cautionary tale of missed opportunities, where short-term greed and nationalist pride overshadowed the shared prosperity that should be the goal of every resource project.
As negotiations begin in 2026, the eyes of the world will be on the South Gobi. For Mongolia, this is a chance to turn a legacy of unfair deals into a future of sovereign economic empowerment. For Rio Tinto, it is an opportunity to prove that profitability and responsibility can coexist. The stakes could not be higher – and the outcome will define the future of resource governance for decades to come.
By Sumiya Chuluunbaatar

Mongolia prepares international tender to build steel plant www.azertag.az

Minister of Industry and Mineral Resources Damdinnyam Gongor said Mongolia is ready to announce an international open tender as part of its goal to establish a domestic steel plant, Montsame reported.
According to the project’s preliminary feasibility study, a steel production complex is planned with an investment of USD 806 million. Once implemented, the project is expected to produce one million tonnes of steel products annually, including 500,000 tonnes of rebar, 400,000 tonnes of steel billets, and 100,000 tonnes of steel grinding balls. The complex is also projected to process 850,000 tonnes of coking coal per year, produce 600,000 tonnes of metallurgical coke, and generate 60 MW of electricity to meet part of its own power demand.
Members of the working group noted during a preparatory meeting on the construction of the complex that the project would make it possible to meet domestic demand for steel products and support the development of downstream steel-processing industries. The Ministry of Industry and Mineral Resources reported that the meeting reviewed the preliminary feasibility study and approved a plan to select international strategic investors and partners. A government working group tasked with preparing for the selection of investors and contractors for the steel complex was established by a prime ministerial order in 2025.
Presenting the preliminary feasibility study, Gankhuyag G., Manager of the Production, Technology, and Project Development Department at Erdenes UTP LLC, said Mongolia imported about one million tons of steel products last year. He noted that domestic steel demand is projected to reach 1.7 million tonnes by 2030, prompting plans to build a complex with an annual capacity of one million tons. Once operational, the facility is expected to meet 60–70 percent of domestic steel demand and enable local sourcing of products such as rebar, steel grinding balls, and steel billets.

Russian deputy PM expects agreements on free trade areas with UAE, Mongolia, Indonesia to take effect in 2026 www.interfax.com

The agreements on free trade areas signed between the Eurasian Economic Union (EAEU) and the United Arab Emirates, Mongolia, and Indonesia last year are currently undergoing ratification procedures and are expected to enter into effect in 2026, Russian Deputy Prime Minister Alexei Overchuk said.
"The ratification procedures in relation to the Emirates, Mongolia, and Indonesia are currently underway. Today we think that we have facilitated the access of our commodity producers to a market comprising about 730,000 million people. It is already a very serious number. And we hope that these agreements will start operating within about a year," he said.
A full-scale agreement on a free trade area with Iran and the EAEU, which was signed in late 2023, entered into effect in 2025, he said.
Talks on a free trade area with India were launched last year. Overchuk refrained from making any forecast as to when the parties could approach its signing. "In this case, it is perhaps too early to talk about some specific deadlines, it's important that these talks are ongoing and it is evident that the negotiating team is optimistic," he said.
India is actively negotiating establishing free trade areas with other regions, including the European Union, he said. "We're also looking into these issues and how it affects each other, it is also a subject of study for the negotiating teams," Overchuk said when asked how the agreements between India and the EU would impact the prospects of the country signing a free trade area agreement with the EAEU.